A radio host recently inquired about how one might approach mediating the trade dispute between the United States and Communist China. The response given was a straightforward one: the position would be resigned immediately, in favor of seeking a different job.
The pessimistic outlook stems from experience gained during the first term of President Donald Trump. During this time, efforts were made by the National Economic Council, led by its director, alongside the China trade team, to address trade issues with China. Despite numerous meetings with Chinese counterparts, progress was limited.
Bob Lighthizer, who served as the U.S. Trade Representative, was pivotal in educating on unfair trading practices, particularly with China. His guidance highlighted the need to safeguard American technology entrepreneurs and their intellectual property. Mr. Lighthizer also authored a book that exposed China as a leader in intellectual property theft and forced technology transfers.
A misunderstanding by many is the extent of control the Chinese government exerts on American companies operating in China. These companies are often managed by Chinese entities, as governing boards are predominantly controlled by the Communist Party, mandating unfair advantages.
In 2018, an attempt was made to negotiate with Chinese leaders in Beijing. Most negotiations were reminiscent of dealing with Communist Party representatives, with only a few showing genuine reformist tendencies. Commerce Secretary Wilbur Ross led commodity negotiations during these meetings, focusing on trade targets for raw materials, agriculture, and energy, albeit with minimal success over time. Treasury Secretary Steven Mnuchin’s efforts with financial companies also faced challenges due to the unyielding stance of Chinese authorities.
Despite numerous discussions in Washington, D.C., progress was slow. Eventually, parameters were established, culminating in the U.S.-China Phase 1 trade deal. During a notable meeting in Buenos Aires in late 2019, a significant discussion occurred between Presidents Trump and Xi Jinping, touching on critical issues like the fentanyl trade. Despite agreements, these too, were met with continued challenges.
The Phase 1 trade deal, signed in January 2020, remained largely unimplemented by China. At that time, the Covid-19 outbreak was unfolding in China, allegedly from a lab in Wuhan, ultimately resulting in a global pandemic with catastrophic loss of life. China continues to deny the laboratory origins of the virus.
Subsequently, the expected Phase 2 trade deal was disregarded by China, who cited Covid-related disruptions as a cause. Despite Covid no longer being a significant hindrance, China has continued with intellectual property theft and technology transfers while ignoring agreed trade targets.
Recently, discussions with business insiders in China have suggested that the situation has intensified, with signs of increased Communist control under Xi Jinping. Descriptions liken Xi to an emperor with immense power, ruling with little tolerance for dissent.
Given these circumstances, mediating the trade dispute between the U.S. and China seems futile. It reinforces the stance taken by President Trump on applying tariff pressure to Xi Jinping’s economy, amidst a broader concern about the long-lasting implications for China.