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My first reaction to news that China was planning on imposing tariffs on $75 billion in American imports was to contemplate whether or not we could actually just stop trading with China altogether. As a free trade hawk, the notion is obtuse to me. But as a patriot who recognizes the multiple threats China represents to our nation and much of the world, I wondered if the economic risks of breaking away from the Chinese flow of products and resources were worth it.
Anyone who claims to know the answer to this question is lying or delusional. You could do a comprehensive study on the pros and cons of elevating other trade partners and dumping China and still not know with a certainty all of the effects. But we have numbers. We have analyses. We have common sense. All three tell us dumping China as a trade partner altogether would be rocky at first, but the end result for American consumers and businesses would be negligible while the crises brought about in China would be catastrophic.
In other words, this might actually be the best way to eventually return to a free trade atmosphere on the world market. Pressure is slow in working against China. Between their own tariffs and devaluing the Yuan, China seems to be preparing for the long battle in hopes the Democrats win the 2020 election. We may need to fundamentally rethink our entire trade infrastructure, one that is more spread around the world instead of reliant so heavily on one Asian nation.
As if President Trump has been reading my mind (new NSA tech?), he Tweeted what can only be perceived as total agreement with my speculation. Okay, so it’s possible he and his staff came up with it without digging into my head, but it eerily coincides with what I’ve been thinking about since yesterday.
….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..
— Donald J. Trump (@realDonaldTrump) August 23, 2019
….all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!
— Donald J. Trump (@realDonaldTrump) August 23, 2019
The wording of the President’s Tweet is poor. We can’t be “hereby ordered” by the President to do anything outside of the confines of Article 2. But wording aside, the sentiment of the President’s Tweet is sound. We really don’t need China, and while it would be nice if we really could just bring everything home and build it in America, that’s not really what would happen. Some would be brought back to U.S. manufacturing sectors, but much of it will still need to be imported.
But here’s why the President is correct that we might be better off without China. They’ve held the lion’s share of products and resources we import for decades. This is an antiquated and false concept propped up by fears that if we eliminate things with the “Made in China” mark, Walmart’s shelves would be empty and Amazon would have to go back to primarily selling books. Our reliance on Chinese imports is an artificial need in the 21st century. There are plenty of ways to instantly replace China as a producer.
More importantly, there are plenty of countries who will gladly sign free trade agreements with us if China will not.
There’s a secondary, albeit exceedingly important consideration in this equation as well. China is the other world superpower. For years following the fall of the Soviet Union, America enjoyed exclusive status at the top. But over the lest decade, China has emerged as comparable and in many ways superior to us when it comes to specific seats of worldwide power. They have the manpower and natural resources we do not, and in the 21st century they’ve finally learned how to wield this power.
Pulling back heavily on trading with China will adversely affect their government power and international clout. It’s hard to imagine they’d be able to sustain themselves in a real trade war with the United States. They’re simply too reliant on Americans buying their cheap products. Diminishing or eliminating them as a trade partner would rock the financial markets and cause instant turmoil, but it would be a much shorter experience than some believe it will be. Capitalists know how to rebound. We know how to react when the status quo is shaken. China, by its nature as an exporting nation and its cultural adherence to the status quo, will not react as well. They could collapse in a matter of weeks.
China relies on exports. The United States relies on imports. It’s a heck of a lot easier to find sellers than buyers. Other countries will step up to fill our import void if we stop trading with China. But China cannot replace us as consumers.
Update: And so it begins…
….Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very….
— Donald J. Trump (@realDonaldTrump) August 23, 2019
…Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!
— Donald J. Trump (@realDonaldTrump) August 23, 2019
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