The Definition: World Trade Organization
According to Investopedia: "A global organization made up of 164 member countries that deals with the rules of trade between nations."
Throughout the 2016 Presidential race, then-Republican candidate, Donald Trump, continually attacked China’s trade policy, accusing the country of “raping” the United States and damaging U.S. businesses through manipulating its currency to make its exports more competitive globally. In his campaign platform, he pledged to cut a better deal with China aimed at bolstering the competitiveness of American businesses and protecting their workers, while putting "an end to China's illegal export subsidies and lax labor and environmental standards."
But Trump’s election in 2016 didn’t mark the start of America’s confrontation with China over trade. Instead, it represented a key moment in a bigger story that effectively started in 2001, when China entered the World Trade Organization (WTO).
In order to join the global trading group, China agreed to lower its trade barriers and follow the standard set of international trade practices that guided the other participating nations. At the time, many thought China’s entry into the WTO would deliver big benefits to the U.S., including greater access to Chinese markets for American companies, and a boost in U.S. job growth thanks to increased trade exports. But, the benefits of trade liberalization with China failed to deliver.
Instead, China’s exports to the U.S. vastly overtook its imports from the U.S., causing the bilateral deficit to expand rapidly, which seriously impacted the employment and wages of many American workers. As it turns out, the U.S. wasn’t prepared for the scale or speed of the impact that Chinese exports would have on its manufacturing sector.
There is bipartisan sentiment in Washington that Chinese trade practices pose a serious problem for the U.S. According to the CATO institute, the issue can be summarized as follows: “China’s mercantilist state systematically discriminates against foreign products and foreign producers in China while forcing foreign companies to hand over their intellectual property (IP) as the price of access to China’s large and growing market. China engages in widespread cheating in its trade practices, including not only high tariffs, domestic content requirements, and other traditional forms of protectionism, but also rigged regulations that erect trade barriers by favoring Chinese companies and outright theft of foreign IP.” The Trump administration believes that under current WTO rules there is little the U.S. can do to combat such practices.
As a result, Trump has stayed true to his promise to get tough on China by launching an all-out trade offensive that has involved imposing tariffs on $250 billion worth of Chinese goods. Although Trump reached a temporary truce with Chinese President Xi Jinping earlier this month, the existing tariffs remain in place.
What the Candidates Say On Climate Change:
Many Democrat candidates support President Trump’s goal of taking on China and addressing unfair trade practices, but oppose the way he’s going about it. An over-reliance on tariffs is, many argue, economically damaging and, as Senator Kamala Harris (D-CA) has suggested, ultimately “counterproductive”.
During the first Democrat debates, a number of candidates singled out China as the biggest geopolitical threat facing our country. Here’s what some of them said:
Mayor Pete Buttigieg: "China is using technology for the perfection of dictatorship. Manufacturers and especially farmers are hurting. Tariffs are taxes and Americans pay on average $800 more a year because of the tariffs. Meanwhile, China is investing so they could soon be able to run circles around us in artificial intelligence and this president is fixated on the relationship as if all that mattered was the balance on dishwashers. We have a moment when their authoritarian model is an alternative to ours because ours looks so chaotic because of internal divisions. The biggest thing we have to do is invest in our own domestic competitiveness."
Sen. Michael Bennet (D-CO): "The president has been right to push back on China, but has done it in completely the wrong way. We should mobilize the entire rest of the world who all have a shared interest in pushing back on China's mercantilist trade policies and I think we can do that."
Andrew Yang (Leader of the #YangGang): "The tariffs and the trade war are just punishing businesses and producers and workers on both sides... We need to crack down on Chinese malfeasance in the trade relationship, but the tariffs and the trade war are the wrong way to go."
Made In China
The U.S. and China have now been embroiled in a trade war for over a year. The U.S. has placed 25% tariffs on $250 billion of Chinese goods, and Trump is still threatening to impose additional tariffs on another $325 billion of Chinese products. But when did trade with China become such a problem for the U.S.? And how do worsening trade relations impact the future of the American economy?
In this episode, The Daily delves into the history of U.S.- Sino (that’s China) trade relations and examines the impact China’s entry into the global marketplace, and its quick succession to becoming the planet’s top global manufacturing base, has had on U.S. jobs and industry.
By failing to anticipate and prepare for the rapid loss of U.S. manufacturing jobs that followed, policy-makers forgot a key economic principle: “when you liberalize trade, there are winners and there are losers”. It’s been U.S. workers who’ve lost out.
5G And The Fourth Industrial Revolution
5G is expected to be up to a hundred times faster than our current wireless networks. The claims surrounding what this would mean for the future are almost incomprehensible, from pumping twelve trillion dollars into the global economy by 2035, and creating some twenty-two million new jobs in the U.S. alone, to generating a whole new Internet of Things founded upon a higher degree of hyper-connectivity.
But alongside the supposed fruits promised by a 5G-enabled ‘fourth revolution’ lies significant risks: a hyper-connected world is a world in which cyberattacks are far more likely.
So why is China at the center of concerns surrounding the threats 5G may pose to the U.S., and to the rest of the world? Because Huawei, a Chinese telecom company, is currently the global leader in 5G technology and is suspected of being a conduit to Chinese intelligence by many U.S. government officials, most notably Trump. What’s more, thanks to large subsidies from the Chinese government, it has been able to aggressively sell its systems at cut-rate prices to U.S. markets.
In this episode, Today Explained examines the cyber security threat posed by Huawei’s 5G networks and what the U.S. government is doing to try and stop them.
China’s New Version Of Colonialism
In 2013, Chinese President Xi Jinping announced the launch of the Belt and Road Initiative (BRI) - an ambitious infrastructure development and investment plan that would span from East Asia to Europe. The initiative seeks to create an expansive network of Chinese-built railways, energy pipelines, highways, and border crossings, and has already cost China an estimated $200 billion. More than sixty countries (two-thirds of the world’s population) have either signed onto projects, or suggested they intend to do so. The initiative has sparked concern amongst some in Asia and the U.S. who fear it is a guise for China-led military and regional expansion - “a new version of colonialism” enabled by BRI countries' financial indebtedness to China.
In this episode, News in Focus discusses the strategic significance of China’s Belt and Road Initiative, and what it means for the rest of the world.