3 ms·

I also like the grandparent post, but I'll take a crack at presenting an opposing side. The idea of a lopsided trading relationship, with the US being the loser

I also like the grandparent post, but I'll take a crack at presenting an opposing side. The idea of a lopsided trading relationship, with the US being the losers, and China the winners, seems a bit dubious to me. Chinese companies work because they have cheap labour, a lot of talent, and massive economies of scale. Blaming the demise of US industry on China is absurd - US industry started declining in the 80's, because neo-liberal economics basically amounts to industrial sabotage on the policy level. Every country that went hard neoliberal has very little industry today, while the few that didn't (Germany, France, Japan) still have very competitive industry. The idea of unfair trade is also a bit of a mercantilist trope, so I'm not sure it makes sense on its own terms - but at the very least, it's normally something that requires an unequal relationship between trading partners. Like, I think it would be fair to say that trade deals between first and third world nations are often unfair, because there are ample opportunities for one party to lean on the other. This obviously isn't so between the US and China. If there are conditions that favour Chinese companies, it's because of policies that were, at the time, thought to benefit the US - and which probably do benefit the US, at least insofar as GDP growth is concerned (the US has remained pretty good in this arena). Trump's whole schtick of 'bring back coal' comes to mind here. Obviously, you could hammer out a trade agreement that would end up with coal mines reopening in Wyoming, with steelworks in Pittsburgh - but would it actually help the US? As for the whole question of whether or not China is 'playing dirty', or muscling their way through established norms, I think it's obviously not the case - or at least, it's by no means the case that China plays more dirty than anybody else - least of all the US. I think the politics of China do deserve a great deal of scrutiny, and if there's something that the west should be putting pressure on them for, it's the slide into totalitarianism we've witnessed over the last few years. However, all the stuff about trade seems two parts grandstanding and one part hypocrisy.

jariel 6y ago
I'll answer the question in a more standard way, and disagree with your points along the way. 'Fair Trade' does not have to be 'Trade on Equal Terms'. That is how the relationship started: China was 'very poor' and so the asymmetrical trade rules made sense. Pepsi and Coke and a few others had access to China market, people 'looked the other way' at the IP issues. But in 2020, China is in a different situation, and the asymmetrical rules are basically 'not fair'. "The idea of unfair trade is also a bit of a mercantilist trope," This is false. If one nation is allowed to sell into the other, but does not allow the other to sell to it - this is 'unfair trade'. Blatantly. If one nation uses state subsidies to support fledgling industries, so that they can dump on foreign markets and 'take over the global industry' - this is obviously unfair trade. China did this with Solar Panel market - subsidising their industry to flood America with cheap products, putting everyone out of business etc.. This is not a 'new' idea, these concepts have been well understood for hundreds of years. "Blaming the demise of US industry on China is absurd " Nobody is 'blaming' US economic issues on the US. What I'm articulating is that China is effectively 'cheating' (or rather, has an obvious upper hand) and it needs to be rectified. "As for the whole question of whether or not China is 'playing dirty', or muscling their way through established norms, I think it's obviously not the case - or at least, it's by no means the case that China plays more dirty than anybody else - least of all the US." This is again false. We can call it 'dirty' or not - but China plays 'extremely protectionalist' first off, second, they have state intervention, which is not suitable for trade. There are a million and one things that the US cannot do in China, but that China can do in the US. This is blatantly lop-sided. The US should apply the same rules to China as China does to the US. Second, and more nuanced, is the state intervention. Again, the example: Imagine if the US forced Huawei to give designs and IP over to Cisco, and the US Pres had direct authority over major banks, ordered JP Morgan to finance Cisco buyers in Brasil, Germany etc. - and for liquidity, ordered the US Federal Reserve to print money for that purpose. It sounds incredibly bizarre, right? Well that's what China does today! So it's fine for them to play the game they want to play, but the West needs to respond in kind. This has little to do with 'bringing back coal mines' obviously. But it may have something to do with bringing back manufacturing - in a highly automated way. "about trade seems two parts grandstanding and one part hypocrisy." No it's not, generally speaking the US is pretty good on these things, and has fostered a lot of very important international agreements and ideas along these lines as well. Of course, trade really does benefit the US a lot, so it's to a great extent self interest, but still. The world needs to trade with China on somewhat different terms.

jariel 6y ago

I'll answer the question in a more standard way, and disagree with your points along the way. 'Fair Trade' does not have to be 'Trade on Equal Terms'. That is how the relationship started: China was 'very poor' and so the asymmetrical trade rules made sense. Pepsi and Coke and a few others had access to China market, people 'looked the other way' at the IP issues. But in 2020, China is in a different situation, and the asymmetrical rules are basically 'not fair'. "The idea of unfair trade is also a bit of a mercantilist trope," This is false. If one nation is allowed to sell into the other, but does not allow the other to sell to it - this is 'unfair trade'. Blatantly. If one nation uses state subsidies to support fledgling industries, so that they can dump on foreign markets and 'take over the global industry' - this is obviously unfair trade. China did this with Solar Panel market - subsidising their industry to flood America with cheap products, putting everyone out of business etc.. This is not a 'new' idea, these concepts have been well understood for hundreds of years. "Blaming the demise of US industry on China is absurd " Nobody is 'blaming' US economic issues on the US. What I'm articulating is that China is effectively 'cheating' (or rather, has an obvious upper hand) and it needs to be rectified. "As for the whole question of whether or not China is 'playing dirty', or muscling their way through established norms, I think it's obviously not the case - or at least, it's by no means the case that China plays more dirty than anybody else - least of all the US." This is again false. We can call it 'dirty' or not - but China plays 'extremely protectionalist' first off, second, they have state intervention, which is not suitable for trade. There are a million and one things that the US cannot do in China, but that China can do in the US. This is blatantly lop-sided. The US should apply the same rules to China as China does to the US. Second, and more nuanced, is the state intervention. Again, the example: Imagine if the US forced Huawei to give designs and IP over to Cisco, and the US Pres had direct authority over major banks, ordered JP Morgan to finance Cisco buyers in Brasil, Germany etc. - and for liquidity, ordered the US Federal Reserve to print money for that purpose. It sounds incredibly bizarre, right? Well that's what China does today! So it's fine for them to play the game they want to play, but the West needs to respond in kind. This has little to do with 'bringing back coal mines' obviously. But it may have something to do with bringing back manufacturing - in a highly automated way. "about trade seems two parts grandstanding and one part hypocrisy." No it's not, generally speaking the US is pretty good on these things, and has fostered a lot of very important international agreements and ideas along these lines as well. Of course, trade really does benefit the US a lot, so it's to a great extent self interest, but still. The world needs to trade with China on somewhat different terms.