China warning trump on trade


Lu Kang China warning trump on trade China warning trump on trade screen 20shot 202017 08 16 20at 20121348 20pm
Lu Kang, China’s Foreign
Ministry spokesperson


On Monday, President Donald Trump signed a measure to begin
exploring an investigation into China’s theft of US intellectual
property (IP). In the international business community, it’s
no secret that in China, there is little respect for trade

However, the way the Trump administration is handling the issue
ignores a clear warning the Chinese government gave to the
US back in January. It’s using Section
301 of the US Trade Act of 1974, a law that hasn’t been used in
decades and would allow Trump to put a tariff on Chinese goods
without Congressional approval.

In an
interview with
Trump adviser Steve Bannon seemed
gleeful about the grave implications of Section 301. He confirmed
reports that at least some in the administration had planned to
skip the exploratory process for the investigation and proceed
more aggressively, but the conflict with North Korea slowed down
the process.

“To me,” Bannon said, “the economic war with China is
everything. And we have to be maniacally focused on that. If we
continue to lose it, we’re five years away, I think, ten years at
the most, of hitting an inflection point from which we’ll never
be able to recover.”

What this tells us is that Trump either doesn’t care
red lines China set down at the beginning of his administration.
That will have consequences.

In a rare interview with NBC in January
, Chinese foreign
ministry spokesman Lu Kang said in no uncertain terms
that the Trump administration should continue to use the World
Trade Organization to settle trade disputes. 

“China and the US are already members of the WTO, so within
the WTO framework there are already rules governing these
disputes,” he said. “And I don’t want to specify here but it’s
not very difficult for any people to get a conclusion of what
kind of reaction might be from the Chinese side [if Trump decides
to put up tariffs against Chinese goods unilaterally]. That said,
I want to reiterate that we don’t want to see this kind of
scenario that will do harm on both sides.”

In other words: Work through the WTO or we’ll act against the US
economy. Of course, Bannon and officials who think like him
within the administration, like National Trade Council head Peter
Navarro, have no respect for the WTO.

You can see where we have a problem here.

What’s yours is mine

None of this is to say that something shouldn’t be done about
China’s IP theft.

“They’re going to be mad, but I think at the same time they
know the game that they’re playing and they’re going to be mad
about being caught more than anything else,” said Brian
O’Shaughnessy, president and chair of the Board of the Licensing
Executives Society, an organization for IP professionals.
“There’s no question they’re manipulating the IP system.”

O’Shaughnessy says that US companies find that when they go
to China there is only the veneer of respect for IP. In reality
there is no right to privacy, especially when it comes to
technology, and part of that is cultural difference. Many in
China see it as the government’s duty to patrol the

Of course, at the same time, this is also because in
“technological dominance, they understand, is

So yes, this expert agrees this is a problem. But, other experts
— the trade experts — believe that using Section 301 is not a

“The law hasn’t been used in 50 years and there’s a good
reason for that,” economist Chad Brown of the Peterson Institute
for International Economics told Business Insider on a phone
call. “We built a brand new trading system so we didn’t have to
use this law.”

That system is adjudication through the WTO.

What’s ours is the world’s

And that brings us back to NBC’s interview. I can’t stress
how rare it is for a Chinese official to be as candid as Lu was

“We are not prejudging anything, but I can tell you that
while we have to prepare for the good to protect our national or
our legit national interests but we always try our best for the
good,” he said.

US CHINA trade growth China warning trump on trade China warning trump on trade screen 20shot 202017 08 09 20at 2095852 20am

Institute of International

The good would be continuing the deep trading relationships
between China and the US. Over the past decade, China’s imports
from the US have grown twice as fast as its exports to the US and
three times as fast as China’s total exports, according to a
recent paper from the Institute of International Finance.

So if things get bad it really matters to the US, and
especially to Trump’s own voting base.

More from the report:.

China last year imported 62% of American soybeans, 14% of its
cotton, 17% of auto, 15% of semiconductor, and 25% of Boeing
passenger planes.

China is the largest market for US soybeans and airplanes, and
the second largest market for auto, cotton, and semiconductor

And so here we are, defying a warning from a key trading partner
to follow the rules of an organization the US helped to found. We
wrote the rules of global trading, and now we want to pretend
they don’t exist.

I’ll leave you with a word from Lu.

Worldwide people were interested in his slogan… ‘America
First.’ My personal opinion it’s fair for President Trump to
place the American national interest at the top of his agenda,”
he said. “All the state leaders should put the interest of their
people, their public at the top of the agenda. But the problem is
that today’s world is quite interdependent, countries are quite
interconnected. So while trying to pursue the interest in your
country you’ll have to keep in mind the implications worldwide,
and these kind of implications might come back to the policy
issues at your own home.”

Here’s why:

china imports to the us China warning trump on trade China warning trump on trade screen 20shot 202017 04 05 20at 2053145 20pm


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