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Issues & Insights

Taken for a Ride: Trump Shouldn’t Worry About Wall Street on China Trade

By Bob Maistros

Is that a five-day Dow Jones chart — or a roller coaster?

Investors are certainly getting bounced around as financial markets obsess over trade negotiations with China — which have now culminated in tariff hikes on $200 billion of goods.

But the real issue is how China has taken America for a ride for four decades. And — it’s absolutely vital to recognize — on way more than just trade.

When Jimmy Carter normalized relations and granted the Communist regime Most Favored Nation (MFN) status — basically access to our markets on equal terms with other trading partners — he offered up a now-familiar promise.

“Normalization — and the expanded commercial and cultural relations that it will bring — will contribute to the well-being of our own Nation, to our own national interest, and it will also enhance the stability of Asia.”

Uh-huh.

Fast-forward through several renewals and renewed promises — including right after the brutal repression of Tiananmen Square, when a little-known representative named Nancy Pelosi introduced legislation tying MFN to human rights improvements and candidate Bill Clinton roasted the Bush Administration for not confronting the Chinese.

The once-tough-talking Clintonistas — infamous collectors of campaign cash flowing from the East – ultimately led the way in force-fitting the square peg Chinese into the round hole of the liberalized World Trade Organization.  And why?

Per the liberal Brookings Institution at the time: “(WTO accession) has the potential to transform China’s economy, its relations with its neighbors, and perhaps even (someday) its political system. It will impel China to be accountable to an internationally agreed set of rules and bind them to wide-ranging economic and systemic changes …. ”

To coin a phrase: How’s that working out for ya?

We all know how China flouted the global rules to run up mind-boggling trade deficits and hollow out America’s industrial capacity and middle class.

But that isn’t even the worst of it. Until this president, we’ve had a generation and a half of coddling and shoveling cash at cruel, barbarous and dangerous dictators and implacable enemies.

Doubt that? Consider six reasons besides trade that Trump is justified in lowering the hammer on the Middle Kingdom:

  1. Relentless cyber attacks on the Pentagon and government. The Navy says it and its contractors are under “cyber siege” by Chinese hackers. Defense Department computers deal with tens of millions of probes from China daily from a military hacking operation said to be 100,000 strong. And remember the theft of personal information of millions of federal workers in 2015? Guess who.
  • Rampant looting of intellectual property. An issue from the earliest days of China’s MFN status, the U.S. Trade Representative has estimated that “Chinese theft of American IP” costs a staggering $225 billion to $600 billion annually.  That larceny may extend to one in five U.S. companies, and a senior FBI agent investigating their activities says the Chinese have “taken the gloves off” in their headlong pursuit of our trade secrets.
  • Ubiquitous identity theft. The Chinese heist of the passport numbers of up to 327 million Marriott guests is described as part of a “Big Data hoovering” in which the nation is gathering up personal data of Americans for a wide range of nefarious purposes.
  • Human rights abuses. Almost incomprehensibly, the trade talks continued this week directly after our government accused the Chinese of using its security forces for “mass imprisonment of Chinese Muslims in concentration camps” (emphasis added) possibly involving “closer to 3 million citizens.” Meanwhile, government agents are harassing, raiding, removing crosses from, closing and even – literally – blowing up Christian churches and arresting their members.  They’re even closing state-sanctioned sanzichurches.
  • External adventurism: As China builds its military at our expense — and as our Navy rusts away — it is flexing its muscles, bullying its neighbors and staking illicit claims to virtually the entire South China Sea.
  • Backing North Korea. But China’s biggest sin may well be enabling the Kim regime and their production of nuclear weapons that now directly threaten our national security. In 2016, China accounted for more than 90 percent of North Korean trade. According to a 2015 Congressional Research Service report, China props up the North as a buffer state, providing dual-use materials for the nuclear program, and the Asian giant appears to have eased up in enforcing recently tightened sanctions against its Communist comrades.

The bottom line: rather than becoming “accountable to an internationally agreed set of rules,” as Brookings predicted, a senior U.S. military official says China today is using “fear and coercion” to “bend, break and replace the existing rules-based international order.”

Our National Defense Strategy says the goal of this “all-of-nation long-term strategy” — combining military and economic pressure — is no less than “Indo-Pacific regional hegemony in the near-term and displacement of the United States to achieve global preeminence in the future.”

The President has no obligation to keep China steaming full-speed ahead on this deadly course to world domination simply to ensure continued smooth sailing for Wall Street.

Like his counterparts, the President needs to use whatever tools are necessary — including and especially trade — to bring China to heel, and if necessary, to its knees.


Bob Maistros is a messaging and communications strategist, crisis specialist and former political speechwriter. He can be reached at bob@rpmexecutive.com.


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