Guest Columnist

In Iowa, China's challenge hits home

Chinese Communist Party advances at Iowa's expense. America needs a multilateral response.

From left, China's President Xi Jinping and U.S. President Donald Trump shake hands on Nov. 9, 2017, during a meeting ou
From left, China's President Xi Jinping and U.S. President Donald Trump shake hands on Nov. 9, 2017, during a meeting outside the Great Hall of the People in Beijing. Trump will not impose new tariffs on an additional $160 billion of Chinese imports that were scheduled to take effect this weekend, after tentatively signing off Thursday on a so-called phase-one trade agreement with Beijing. (Artyom Ivanov/Tass/Abaca Press/TNS)

In the next 30 years, China intends to replace the United States as the indispensable nation on the world stage. It is the official policy objective of the Chinese Communist Party (CCP) to revise the U.S. led rules-based international governance system, a system that has existed since the end of World War II, with one more favorable to China’s ideological, strategic, and economic end goals. This is a direct threat to U.S. global interests and will negatively impact Iowa families.

For decades, the CCP has been methodical in taking advantage of the U.S.-led, rules-based system to develop its industrial base and workforce. Through the benevolence of other nations, pilfered trade knowledge, reverse-engineering and open coercion of market forces, the CCP has built an advanced economy at the expense of the U.S. and our international allies. China has used such tools as currency manipulation, state sponsored corporate espionage, and state subsidies, to become the second largest economy in the world.

The next President will have to face unimaginable challenges, the most important of which is kick-starting a faltering domestic economy, while dis-incentivizing China’s nationalistic and mercantilist trade policies. Ultimately, the U.S. economy is tied to Asia’s. So, the U.S. must use smart power in reaching a tough accord with China, support our international partners regarding China’s coercive practices, and rebuild our financial partnerships in East Asian markets.

President Donald Trump’s policy advisers were correct to flag China’s practices as disadvantageous to American workers. Unfortunately, this has not led to sound policy. The implementation of Trump’s trade war has been wholly ineffective, resulting in financial injury to Iowa’s industries, while failing to stop China’s mercantilist practices. According to one research group, Trump’s tariffs have cost Iowan taxpayers $730 million so far — and counting. That is an unnecessary tax on Iowa families.

Iowa’s farmers have been particularly hard hit. The Administration imposed broad tariffs on an array of goods. China retaliated, imposing its own targeted and specific tariffs on U.S. products, including a 25% tariff on soybeans in July 2018 and then an additional 5% tariff in August 2019. Not surprisingly, U.S. exports of soy to China plummeted from $12.2 billion in 2017 to $3.1 billion in 2018. Brazil, Ukraine, and other allies increased their sales of soy to China in our absence. These markets may be gone for some time.

Trade policy is a group effort. The Trump administration failed to elicit broad allied support for desired end states, failed to understand China’s decision space, and failed to work a trade agreement with technical experts rather than via a presidential tweet. The U.S. has the advantage in establishing trade policy, but we also have the most to lose when we do it badly.

A better approach would be to put pressure on China with a coalition of countries. The United States and our ASEAN, European Union, and North American allies are a $50 trillion trading bloc and can insist on responsible trade policies to work with China’s $11 trillion economy. The process may include a targeted and specific tariff regime against key Chinese industries and leaders that have flaunted international norms.

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This is exactly what the Obama-Biden administrations were attempting to do in the “Pivot to Asia” strategy. The plan was in place for our allies, they just needed America, as the indispensable nation, to lead.

Instead, Trump took a go-it-alone approach and antagonized our allies through a string of aggressive trade sanctions at the exact time we needed them in our corner. In military parlance, we bushwhacked our allies and Iowa farmers are left footing the bill.

Going forward, a multifaceted approach is needed to deal with China while continuing to take aggressive actions to offset China’s unfair trade practices that have injured our economy.

Joe Biden actually has a plan to aggressively deal with unfair Chinese trade practices, build an international coalition, and support our key industries of the future. For Iowa’s sake, Joe Biden needs to be our next President of the United States.

Retired Navy Vice Admiral Michael Franken lives in Sioux City. William Krist is a former Assistant U.S. Trade Representative and the author of “Globalization and America’s Trade Agreements.”

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