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China Tariffs Trade Truth

Trump Won’t Kick The Can Down The Road On China’s Cheating

Rod Thomson

To listen to media pundits, President Trump has created the trade-war crises with China. They say he is economically illiterate. Or he’s a dolt. Or he’s a xenophobe. Or a jingoist. And his impetuous actions are “roiling” markets and making businesses nervous and could tank the economy.

It’s all Trump’s fault. This is not just wrong, it is 180 degrees wrong and demonstrably so. In fact, Trump is the only American leader actually trying to right a substantial wrong.

The truth is that the China problem has been ignored or avoided by multiple presidents and Congresses from both parties, and certainly from the media and D.C. establishment, as far back as the late 1980s, but overtly since China’s entrance into the World Trade Organization. And it has always been a rightable wrong by United States leaders with some backbone and intestinal fortitude. So it has not happened.

Here’s what China has been doing.

The United States and many allies thought when China joined the WTO in 2001, the country would open its economy for more full trade. Until then, it had been utterly closed off to foreign companies even while it market-ized its formerly socialist economy. That’s actually part of the deal of being in the WTO — member nations are supposed to abide by free market trading principles to some extent. There was also the thinking that perhaps the Chinese Communist Party would allow more political and religious freedom as the country became more enlightened through trade relationships with the world’s industrialized democracies.

That, it turns out, was a bit of a pipe dream.

China has merely used its WTO membership to flood its trading “partners” with state-subsidized exports while throwing up numerous walls to continue blocking access to the country’s burgeoning middle class — including tariffs. They obviously continue their protectionist, controlling ways. And they continue to crush dissent and religious freedoms, including Chinese Christians.

“China has effectively used the multilateral trading system to its own advantage, enjoying the benefits of those rules of engagement while not always following those rules in spirit,” Eswar Prasad, a Cornell University economist and former head of the China division at the International Monetary Fund, told the Associated Press.

Or following the rules at all. But the comment shows how even the milquetoast IMF acknowledges China’s bad behavior, even if it soft-pedals it.

Because the reality is that it is much worse. From blackmailing U.S. companies and other foreign companies to gain entrance to the Chinese market, to secretly embedding spyware on the hardware they export, to stealing patents and creating cheap knock-offs, to product-dumping for market control to outright espionage and more.

This has meant the loss of likely hundreds of thousands and possibly millions of American jobs and wages over decades. That is a straightforward theft of prosperity. The same, though less, for Europeans who China also treats this way — although the Europeans are not quite the free-trade purists the U.S. attempts to be





Everyone knew. China is one of the worst trade actors on the world stage, not to mention a growing military threat beyond just their region. But no American leaders made the effort to do anything other than kick the can down the road — just as they did with North Korea’s nuclear and missile program and with our European allies in NATO paying their fair share for defense.

Economically, the result is a badly lopsided trading relationship: The U.S. trade deficit with China last year hit a record $379 billion. And their economic growth in part at our expense is funding a huge military buildup that does not rely on the traditional numbers superiority of the Chinese but on high-tech weaponry, including in space.

The trade deficit itself is not the end of the world, although it does transfer wealth, it does so in return for goods. I have a trade deficit so to speak with Walmart, Publix grocery store and Race Trac, to name a few. But that is because I don’t create goods or services I am trying to sell to them. U.S. companies want to sell to the Chinese people, but the government doesn’t allow it or cheats on it, and that is what is creating a lot of the trade deficit. The trade balance doesn’t have to be even. The trading market does.

Donald Trump the man has been harping on this problem for years, even decades. He was a lone voice because no one else wanted to poke the dragon. It was his initial issue when entering the presidential race. When he spoke to Florida Republicans about a week before coming down the elevator at Trump Tower to announce his bid, China was the focal point. It was not until he gauged the American people’s frustration at illegal immigration and the open southern border that he shifted focus, while still including China.

So this is the actual background for Trump beginning last year with tariffing some Chinese goods to get them to the table. They responded and talks went on for months, supposedly making progress and getting closer. Then the Chinese did what they always do, the week before the final negotiations and expected deal were to be announced, they reneged on every major commitment they had made. This worked with the likes of Barack Obama and other American leaders, who just backed down and got some gosh-awful deal that they misled the public about.

Not with President Trump, though. Trump tweeted two days later he was slapping tariffs on $200 billion of Chinese goods, which went into effect last Friday. Again, the media spun wildly at Trump’s actions, because of course they assume the worse and did not know or care about China reneging. Further, Trump spelled out plans for tariffs on another $300 billion. In response to tariffs on $500 billion of Chinese imports, China responded with tariffs on $60 billion.

And this belies the reality that we always had the vast upper hand if we would just wield it. The Chinese will have to come back to the table and they will have to give the U.S. a lot of what we want. Because the reality is that while both sides get damaged in a trade war, the Chinese are far more damaged than the U.S. To be blunt, they need us more than we need them.

“The United States has legitimate grounds to be upset with the Chinese,” said Mark Zandi, chief economist at Moody’s Analytics. “This has been building for almost 20 years.”

Exactly. And nobody would do anything about it until now.

Rod Thomson is an author, radio and TV commentator and former journalist, and is Founder of The Revolutionary Act. Rod also is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.


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Tariffs Trade Trump Truth

Trump Proves To Be The Greatest Weapon For The American Worker

By ​Julio Gonzalez, M.D., J.D.

President Trump’s first and most enduring promise has been kept, and the American worker can rejoice.

A deal experts said was dead in the water materialized last weekend when Canada announced it had reached an agreement with the United States to replace the North American Free Trade Agreement (NAFTA). The deal came about as a frustrated Prime Minister Justin Trudeau called a late night meeting with his cabinet. Indeed, the materialization of an agreement serving to improve America’s trade position in North America would not have occurred were it not for the negotiating prowess and vision of President Donald Trump.

The workings of the trade deal date back to before President Trump’s election; actually from before he even started his campaign. For years, Trump voiced his frustration at the United States’ involvement in deals that were hurting the American worker. Calling them “bad deals,” Trump expressed his befuddlement at how politicians could agree to such catastrophic trade deals. NAFTA quickly became a centerpiece of Trump’s campaign for president and the object of his ridicule. But it should be remembered it was also a centerpiece of his speeches long before he came down the elevator. 

Upon assuming power, President Trump wasted no time threatening the stability of NAFTA by announcing his intention to pull the United States out of it. Predictably, the naysayers took to the airwaves, arguing that NAFTA was a creator of jobs. Investor Dennis Gartman called such a move, “egregiously stupid,” and CNBC proudly published his opinion. Meanwhile at Forbes Magazine, Professor J. Bradford DeLong called the prospect of leaving NAFTA, “a disaster” while Stuart Anderson, the author of the article, mocked Trump by stating that visual aids were needed to teach the President why leaving NAFTA was a bad idea. Anderson held nothing back when he concluded, “Donald Trump does not know much about the trade agreement he has so frequently criticized.”

Undeterred, President Trump continued to place his disapproval of NAFTA at the center of public discourse. Recognizing his greater advantage over Mexico, he then pealed America’s southern neighbor into a separate agreement that did not include Canada calling it a “terrific agreement for everybody.”

With the Mexican trade deal solidified, Trump turned his attention to Canada, this time suggesting that he might leave Canada out of the deal if it did not negotiate.

Canada remained defiant. “We will only sign a new NAFTA that is good for Canada and good for the middle class,” said a spokesman for Canadian Foreign Minister Chrystia Freeland. For Canada, there were a number of sticking points to a new deal. First the NAFTA dispute resolution process that protected the cultural exemptions was “fundamental.” This “exemption” protected Canadian artistic products, including media outlets. Understandably, Canadians feel threatened that American networks might buy Canadian media affiliates and essentially control their media coverage. Further, the abandonment of Canada’s tariffs on American dairy products was considered too great a threat to be acceptable.  

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But President Trump remained undeterred. He imposed an Oct. 1 deadline upon Canada, insisting that if it did not provide the text for a new trade deal to the United States Congress by that time he would move ahead with the deal with Mexico and exclude Canada.  

Trudeau did the only thing he could and called for “common sense to prevail.” He appealed to Canada’s partners, including the European Union, to ramp up their pressure on the United States. But the reality was that Canada could ill afford to be kept out of a new North American trade agreement. The Canadian dollar was weakening, and the prospect of Canada continuing without a treaty seemed like a doomsday scenario for its economy; and for Trudeau’s impending reelection.  

With negotiations seemingly hopelessly stalled as recently as late September, Canadian negotiators went to work. And by Sunday, Sept. 30, the two countries agreed to terms.

The new agreement, known as the United States-Mexico-Canada Agreement (USMCA) is nothing short of revolutionary. Among other provisions, the USMCA curbs Canada’s high tariffs and low quotas on American dairy product; drops the percentage of a car needing to be manufactured in China that would still allow it to be considered “North American;” includes provisions that help NFL advertising; and forces Canada and Mexico to respect American drug patents for 10 years. And Canada gets to keep its cultural resolution process exemption.

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In a very real sense, the trade deal vindicates President Trump — and the wisdom of the American worker supporting him. He identified a palpable problem in North American trade and placed his political capital on the line to see it terminated. As a result, Trump emerged much stronger, an important perception at a time when he is knee deep in trade negotiations with China. But more importantly, President Trump’s priority of protecting the American worker and improving the environment for American businesses prevailed.

There is also the glaring realization that these new agreements would have never come to fruition without President Trump. The events leading to Sunday’s breakthrough would never have been possible without Trump’s aggressive, even bombastic style. Most importantly, when President Trump said he would walk away from the deal, he was believable, forcing all players to look hard at the possibility of having no deal at all.

Say what you want about President Trump, but he has become America’s greatest weapon in international negotiations, much to the joy of the American worker.  

Dr. Julio Gonzalez is an orthopaedic surgeon and lawyer living in Venice, Florida. He is the author of The Federalist Pages and cohost of Right Talk America With Julio and Rod. Dr. Gonzalez is presently serving in the Florida House of Representatives. He can be reached through www.thefederalistpages.com to arrange a lecture or book signing.


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China Elections Media Tariffs Truth

China Is Meddling In U.S. Midterm Elections — Right Now

Rod Thomson

We are treated to a daily recitation of Russia’s attempts to meddle in the 2016 U.S. elections. We are lectured about how there are few things worse than a foreign power trying to influence U.S. elections. We are told this threatens the very being of our democracy.

If so, then what China is doing right now with its targeted tariffs aimed at weakening the GOP in November midterms and President Trump going forward is just as egregious a violation of the sanctity of our democracy. Remember, Russia is not suspected of hacking in and changing votes, just changing public opinion. That is precisely what China is doing. And it’s happening in real-time flashing neon right in front of us.

And yet neither the hyper self-righteous Democrats nor the chest-thumping defenders of all that is good and right media can be bothered with anything more than a long, droll yawn. All they can see every day is the Russia-Trump collusion that apparently never happened. In fact, coverage of China meddling in the U.S elections is virtually non-existent. And yet it is laid right in front of us.

The Chinese have made it clear they are targeting their tariffs on major American agriculture exports to China to create maximum pain in the agricultural Midwest states that are a strong part of the Republican base and the Trump coalition.

For anyone who doesn’t get it from the targeting itself, they are slow-walking Americans through it by using animated cartoons in social media, via CGTN, the English language news channel of the Chinese government, to make the threat as explicit as possible to the Midwest voters: If President Trump doesn’t drop the tariffs on Chinese manufacturers, China will destroy agricultural markets in the Midwest — thus ruining GOP attempts to retain its majorities in Congress.

And in early July, a leaked memo from Chinese Vice Premier Liu to Chinese propaganda outlets made it abundantly clear that China is using its targeted tariffs as a wedge issue designed to split “apart different domestic groups in the US.” This is full-fledged policy and actions of the Chinese government to meddle in U.S. elections by overtly trying to shift American opinion away from one political party.

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The media cannot possibly be unaware of the states being targeted, and the CGTN efforts to explain the targeting; that it is to paint Trump in a negative light among voters in those states. But then again, recall that President Obama publicly tried to defeat the Brexit vote in the U.K., and defeat the re-election of Israeli Prime Minister Benjamin Netanyahu. So he was meddling in the elections of democratic allies — as a foreign power — and yet the media purred contentedly on his lap.

But an inquiring mind could reasonably ask the next question: What is the point of that? What is China’s end game?

One purpose could be to try to blackmail Trump into backing down from his tariffs on China by threatening the outcome of U.S. elections. That is a form of meddling on the policy side. But the bigger, long-range goal, and one much more in line with the alleged Russian-style meddling, would be to defeat Republicans in those states in tight races, to give control of Congress to trade-deal compliant Democrats in the 2018 midterms. Further, the strategy would weaken the Trump presidency and separate those voters from Trump in 2020.

That’s a pretty direct and forthright assault on U.S. elections by a foreign power. And it is sitting on the table right in front of us.

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Yet it’s not clear that one Democrat or mainstream media member gives a fig about this obvious meddling that would hurt Trump and Republicans, while at the same time hyperventilating over the alleged meddling by Russia that might have helped Trump.

All of which makes their righteous indignation over possible Russian interference in 2016 look a little contrived, one could even say, fake.

Rod Thomson is an author, former journalist and current TV talking head, and is Founder of The Revolutionary Act. Rod is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.


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Categories
Tariffs Trade Trump Truth

Is There Emerging Support For Trump Tariff Policies Toward China?

Rod Thomson

I was on an ABC panel last night debating President Trump’s tariff policies with a Democratic politician and a left-of-center university economist when something very interesting emerged: They both agreed that China is a bad player in trade and that it should be forced into more fair trade with the U.S.

All three of us agreed on a major Trump policy. That left the moderator a bit bewildered, and for good reason. It’s a pretty amazing development considering getting agreement on the sky being blue is nearly impossible in today’s environment. But just as surprising and largely uncovered, it is supported by a substantial majority of Americans, if you move past the media spin.

An April poll by Luntz Global Partners found that 62 percent of Americans agree with Trump’s attempt to use tariffs, believing that the risks are worth it to get better trade deals. That includes more than one-third of Democrats and a huge majority of Republicans.

“Voters don’t buy the ‘fear-factor’ that jobs are at-risk, instead agreeing that Trump’s tariffs are both ‘necessary,’ and in the words of Senator Sherrod Brown, ‘long overdue,'” said Alyssa Salvo, president of Luntz Global Partners. Brown is a Democrat from Ohio — a state that stands to gain a lot from better trade policies with China.

Showing a more shrewd understanding of tariffs than a lot in the media, the Luntz poll found that 56 percent of Americans expected that the tariffs would have some negative effects — because of course they will, short-term, at least on consumers on certain products.

The media insists that Trump’s tariffs are launching a terrible and dangerous trade war and wonder why Republicans no longer support free trade. As I mentioned at that point on the ABC panel, we do not have free trade with China and have not for decades. Too many presidents paid minimal lip service to the Chinese tariffing cars at 25 percent among most other products, blackmailing American companies to give up trade secrets to enter the Chinese market and just flat out stealing American technology.

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They have not been a trade partner, but a trade enemy.

Trump has rightly identified this problem that a broad cross-section of Americans also identify, and is trying to fix it, of which Americans also largely approve. President Obama didn’t really give a fig about American industry; his attention was elsewhere focused on destructive identity politics and socialized health care.

What is surprising is that perhaps a growing number of Democrats (not in Washington, that’s a lost cause) are coming to see the problem with China. Only forceful actions will change it. Talk alone will not.

Tariffs are neither good or evil. They just are. If they are used to protect certain industries or companies in perpetuity, then they are bad. China does that as well as several European Union countries and Canada — just on much smaller scales than China. But if tariffs are used as a short-term leveraging tool  — particularly when done by the bigger importing country — then they are good.

Of course, the U.S. can and likely will win any trade skirmish with China, or Europe, for that matter. Remember, the U.S. is not just the biggest economy, its the biggest shopper — by far. That means in every trade war with countries with which we have a trade deficit, we have the upper hand in a tariff war. The bigger the deficit, the bigger the upper hand.

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The U.S. has the largest trade deficit with China, by far, and China cannot come close to matching us tariff for tariff because they already have high tariffs that have kept a lot of U.S. companies out. Which means, their companies and economies get hurt much more than ours, because they have largely been either gaming the system or downright cheating.

This emerging reality has one more meaning: It’s good politics. Tariffs on steel, cars can help heavy manufacturing states, particularly in those that Trump swung from the Democrat column, such as Pennsylvania, Ohio and Michigan. There may be a mix of short-term pain and gain, but should be long-term gain. And it demonstrates he’s actually fighting for blue-collar American workers, voters that identity-poisoned Democrats have walked away from.

Rod Thomson is an author, former journalist and current TV talking head, and is Founder of The Revolutionary Act. Rod is co-host of Right Talk America With Julio and Rod on the Salem Radio Network.


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