The United States and China are engaged in high-level trade talks punctuated by tariffs inflicted in both directions, and while U.S. consumers may soon feel the pinch of higher prices, a leading China expert says the communist regime in Beijing is suffering far more.
“China has a trade-dependent economy and we do not,” said Gordon Chang, an East Asia policy expert and author of “The Coming Collapse of China.” “Last year, China’s trade surplus with the U.S. accounted for 199.3 percent of it’s overall merchandise surplus. That’s incredible dependence on access to the U.S. market.”
According to Chang, the U.S. needs to hammer China for anywhere between $150-600 billion to counter China’s prolific theft of U.S. intellectual property, or IP.
Many free trade advocates, including those in President Trump’s own party, agree that China is running roughshod over intellectual property rights but they contend Trump’s approach will only result in higher costs for American consumers.
Chang agrees that Americans will feel some pain, but he believes it will be mild compared to the impact on China.
“Yes, these tariffs will hurt us but China, up to now, has been absorbing probably more of the cost of these tariffs than we have. So President Trump has been correct,” said Chang, who warns the financial impact on American consumers will get more severe the longer the trade impasse continues.
“As he extends tariffs to all Chinese good, which could happen in the not-too-distant future, then the percentage borne by the United States will be higher for sure. But at some point, we have got to recognize that we cannot sustain the loss of all of this IP and that this is a critical threat to our economy and our society,” said Chang.
But Chang insists if we’re going to stop China’s predatory practices, the U.S. must pursue this course.
“We’ve just got to realize that we cannot get out of decades of misguided trade policy with China and expect there will be no cost. There is a cost already and we’re going to have to bear it in ways which are more obvious than in the past,” said Chang.
Listen to the full podcast to hear whether no deal is better than a good deal with China for the foreseeable future and why Chang thinks Trump is making a big mistake in how he is dealing with China when it comes to the North Korean nuclear threat.