Trump’s China Trade Policy Is a Mess. What Is Progressives’ Alternative?

Public Citizen News / November-December 2019

By Melanie Foley

This article appeared in the November/December 2019 edition of Public Citizen News. Download the full edition here.

President Donald Trump’s China trade policy has created a lot of pain and little gain beyond forcing a long overdue debate on China trade.

China’s entry into the World Trade Organization (WTO) and the 2000 U.S.-China bilateral trade deal, which Public Citizen opposed has delivered not the rosy outcome touted by promoters, but results far worse than critics feared. Research shows that there was a true “China shock” that devastated wide swaths of working-class communities across the United States.

As a presidential candidate, Trump pledged to fix U.S. trade policy with China and reverse its damage. But almost three years into Trump’s presidency, corporations continue to outsource jobs to China, pay American workers less and bring products back here for sale. The manufacturing sector is sinking into recession. The United States suffered the highest-ever trade deficits with China during the first two years of the Trump administration. And Trump’s promised first-day China currency action was derailed by Treasury Secretary Steven Mnuchin, former Wall Street banker.

“It is abundantly clear is that we cannot stick with the failed China policy,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Designed by and for America’s largest multinational corporations under Republican and Democratic presidents alike, that policy has cost millions of American jobs. It has gutted American communities nationwide while financing China’s massive military and economic buildup, worsening human rights conditions in China and bolstering the monopoly powers of multinational corporations.”

While Trump’s China policy has not delivered, most critiques of it in the press also are off base. The China model of growing world-class economic and military power in the total absence of democratic governance and with total impunity for horrific human rights violations poses a global threat.

And, unless the United States and China act to address the climate change – which itself will implicate numerous trade issues – the climate crisis will only be exacerbated. Add to these weighty global considerations the fact that U.S. trade policy with China has enormous implications for economic equality here and for the lives of hundreds of millions of Chinese whose working and living conditions remain bleak.

Instead of identifying goals for a new approach and policy options to achieve those goals, the U.S. debate has been almost entirely framed in reaction to the chaotic way in which Trump’s China policy is being conducted and not on the underlying structural challenges for U.S.-China trade.

To counter Trump’s nationalism and status quo neoliberalism, we desperately need a truly progressive approach to trade policy with China.

Progressives are for an industrial policy that builds a new green economy to save the planet and provide good jobs. Thus instead of opposing China’s use of economic planning and subsidization of research and development of industries of the future in alternative energy, we should focus on how trade policies should allow for such domestic policy tools if the related products are not traded.

Progressives are against corporate monopolies, carbon-spewing long-distance shipping and Wall Street giants gaining more power. So progressives should not support Trumpian get-tough-on-China demands that include China guaranteeing broader rights for U.S. firms, including financial service firms, to invest in China or better intellectual property protections in China so it is safer to outsource the production of new cutting-edge manufacturing.

As first steps, progressives and Democrats can unite to counter the clear moral outrage and expose the hypocrisy of Trump not using existing statutory authority to immediately embargo all goods made by Uighur political prisoners in forced labor camps. They also can condemn the administration’s failure to tackle serious health and safety problems associated with U.S. consumers becoming reliant on Chinese-produced medicines and numerous other goods produced with worryingly lax standards and no independent inspection. These goals – not making China safe for Wall Street banks to set up shop or incentivizing the outsourcing of more U.S. manufacturing jobs – should be the priority.