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How Should Trump Handle the U.S.-China Trade Relationship?

by Countable | 11.9.17

UPDATED - November 9, 2017: During the 2016 presidential campaign, Donald Trump accused China of “raping” the U.S. through unfair trade practices. Meeting with Chinese leader Xi Jinping in Beijing this week, Trump said the U.S. trade relationship with China is a “very one-sided and unfair one.” However, the President then quickly added:

“I don’t blame China. Who can blame a country that is able to take advantage of another country for the benefit of its citizens? I give China great credit.”

Not everyone shares the President’s belief that China is free of blame -- read Countable’s earlier story on the U.S.-China trade relationship below.

What’s the story?

Basically, the story boils (or grills) down to this: a USDA Prime ribeye costs $60 a pound in China, which is about 30 percent more expensive than the best steak from Australia.

NPR attempted to understand why in an article titled, "Shaky U.S.-China Trade Relationship Will Top Trump's Agenda In Beijing."

One of the reasons for the price differential: "China imposes a 12 percent tariff on beef from the U.S., yet its biggest competitors in the beef market in China – Australia and New Zealand – have both signed free trade agreements with Beijing, pushing down their tariffs to around 4 percent."

James McGregor, president of the greater China region for the consulting firm APCO, told NPR that fault rests with American trade representatives.

"There is no strategy and professionals are not involved," he said. "The people from [the U.S. Trade Representative's office] and Commerce and State are sidelined."

Trade Reps

In the past, officials from the U.S. Trade Representative and other government staff typically dealt with China. But now, McGregor told NPR, Trump has political appointees with little to no trade experience engaging with the Chinese.

"It's really been a farce," McGregor said. "And if it continues like this, it's really going to hurt American business. The Chinese are pros. They know what they're doing. Anybody sitting on the other side of the table as Chinese negotiator has been doing that subject for 20 years."

McGregor offered a recent example of the trade representative deficit: in anticipation of Trump’s visit to Beijing, Chinese negotiators were contacting McGregor’s friends in Beijing to see what they could give Trump that might please his American base. McGregor calls these

easily-promotable gifts "Twitterable deliverables." China’s lifting of the U.S. beef ban in May was one of these "Twitterable deliverables” — though McGregor said that because it came so late in the year, it may not have had a meaningful impact on the U.S. economy.

State Reps

But William Zarit, chairman of the board at the American Chamber of Commerce in China, said it’s not mismatched trade representatives that are the problem, but the countries that back them.

Zarit told NPR that what would have a meaningful impact on the U.S. economy would be forcing China to open its markets to U.S. businesses and stop giving preferential treatment to Beijing’s "global champion companies." As NPR explained, “Tech giants Baidu, Alibaba and Tencent, as well as telecommunications company Huawei, have all received generous support from Beijing.”

Zarit said that these "global champions" are “nurtured in the domestic market with protection and with strong state support.” Therefore:

"When these companies go international, it's tantamount to a Western company competing with the country."

Sales Reps

Additional Beijing-Washington trade issues include:

  • U.S. companies entering the Chinese market are often forced to hand over their technology and enter into joint ventures with Chinese partners

  • U.S. automotive, entertainment, healthcare, and technology companies have investment caps that prevent them from competing with Chinese companies. But "Chinese companies in these sectors have no such caps in the U.S. market," NPR noted.

  • Chinese companies – many backed by state funding – are acquiring U.S. companies at an alarming rate, according to APCO’s McGregor. "The Chinese are smart," McGregor said. "They're investing in everything in Silicon Valley right now. And in some cases, when the Chinese invest in something that prevents [the] U.S. government from investing, they're blocking technologies from our military."

What do you think?

How can the U.S. improve its trade relationship with China? Is it about hiring more qualified U.S. trade representatives? Forcing China to open its markets to U.S. businesses? Putting investment caps on Chinese companies operating in the U.S.? Trump is currently in Beijing discussing trade, but the issue won’t be solved this week: Hit Take Action, tell your reps what changes in trade policy you’d like to see, then share your thoughts below (until China purchases Countable).

— Josh Herman

Related Reading

(Photo Credit: ByoungJoo / iStockphoto)

Countable

Written by Countable

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(57)
  • AngelaWood
    11/09/2017
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    He will do whatever benefits him the most since he manufactures the majority of his shitty stuff in China.

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  • Mark
    11/09/2017
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    Diplomacy with China requires acting like a diplomat not like a dips-hit. We’ve seen too much of the latter and not much of the former from the POTUS. Most of the American people are not interested in reality TV, they want real leadership.

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  • RadicalModerate
    11/09/2017
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    Donald should stand in the corner thinking about what he’s done while the grown ups are talking.

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  • Chris
    11/09/2017
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    Just one question. Is the Trump family bringing their business back to the US?

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  • Gail
    11/09/2017
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    Tell him to shut up.

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  • Joanne
    11/09/2017
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    trump has or is trying to build hotels in China. His daughter’s shoes are manufactured there. He hired the dummies running the show. trump should just resign and let America move on.

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  • Deirdre
    11/09/2017
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    trump does not know what he is doing! He is destroying all aspects of America and companies. He is an idiot an embarrassment to our country.

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  • Jeffrey
    11/09/2017
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    Make a trade deal with the second largest market... India. Let China squirm while they see their jobs going to India. Then they will be more willing to negotiate in good faith, for a trade deal that is not so one sided.

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  • Dave
    11/09/2017
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    Trump think that China exploitation of other countries is OK? That would be their people, resources, environment, child labor, human rights, etc. Also Trump products are made in China. A lot of Corporations pay no taxes in third world countries, but exploit their people, country and government. People would have you believe that this is nothing more than good business? This is nothing more than a love fest. Trump is all about Trump, doesn’t really care about you or anybody. Read his or any book on him, find fair, honest and equitable. You might find exploitation and deception. So what is the best interest of the United States?

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  • W1LL14M
    11/09/2017
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    Rejoin the TPP! If not, we will be left in the dust behind all the other countries who plan to continue it.

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  • NoHedges
    11/09/2017
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    He shouldn’t try “to handle” China at all! He should humbly and respectfully follow China’s lead. He is a guest, they are the host.

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  • AngelaWood
    11/09/2017
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    RON! You are a moron! As big as Trump is. Obama was far from a C-D student and was NOT a foreign exchange student. He studied in America and is an expert at the Constitution. Quit drinking the ORANGE KOOL AID!

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  • Frank
    11/10/2017
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    He seems to be doing just fine.

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  • B.R.
    11/09/2017
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    President Trump is right. Our trade agreements are not in the best interest of the US. Need to do whatever it takes to rectify this.

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  • Sean
    11/09/2017
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    The entire idea of varying tariffs over something as basic as beef is the definition of a government getting too large or mishandled. It's not just our government either obviously. An across the board % should be imposed on (any/all) foods, if charged a tariff at all. 🎨 the talk of "experts" in this situation is laughable. These %s aren't based on anything like normal businesses. It's "how can X politician get the most $ in his pocket." Professional negotiator maybe, but again, what are these %s based on (clearly not distance ).

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  • Dennis
    11/09/2017
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    Trump should stay out of foreign affairs and let knowledgeable experts, without something to gain personally, handle the nation’s foreign affairs.

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  • DrSchmidt
    11/09/2017
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    When trump crime family was granted 12 more patents after Chinas visit to Mar Lago earlier this year Trump will continue bringing in his family crap from China.

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  • Timothy
    11/09/2017
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    Let’s try some diplomacy with mutual respect, dignity and self restraint on the part of all involved. This could lead to rational discussion of mutual interests and problems w/o placing either side at a disadvantage. Then the American values and history should influence the decisions by the diplomats.

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  • Abbi
    11/09/2017
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    Personally I recommend that China refuse all business deals with anything under the Trump name until he stops goading North Korea. I can make all the suggestions I want to Trump but we all know he's an unsupervised man child that needs constant praise so he'll do what he wants.

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  • M
    11/09/2017
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    Keep Trump & his impulsive immature mind, big mouth.and disastrous Twitter finger under control , if this is at all possess!

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