The news of the moment is that President Trump is going to levy a $50 billion tariff on Chinese goods in response to the Chinese theft of American intellectual property. The Chinese government supports efforts to break into the computer systems of American companies and steal their designs, trade secrets, an other important data so that the Chinese can get it without paying for it. China has also been pressuring American companies to have their tech products made in China so that the designs, etc. will be known in China and can then be used by the Chinese.
This is a process that has been going on for at least ten years if not more. During the Obama years, the US government did nothing about it. As a result, a great deal of tech and other US manufacturing moved to China. Trump's move is telling the Chinese to knock it off; there will be a steep price if the practice continues. This is a good thing. China is a world economic power. It has to act like a responsible member of the world community, not a pirate, if it wants to stay a part of that community.
The Chinese are threatening to respond with countermeasures of their own. Supposedly, these measures will target the groups who voted for Trump. We will see soon enough how the Chinese react. The key, however, is that the USA not give in to these Chinese threats. In the near term, the pain inflicted on China of possibly losing the US market is a lot worse than the pain the US would suffer at the hands of the Chinese. President Xi of China will not want to have his nation's economy take a serious hit in a trade war with the USA. China claims that its GDP is growing by more than 6% per year, but many economists think that the real growth rate at the moment is something like 1.5%. A hit in a trade war could lead to a recession in China, something that the Chinese haven't seen in a long, long time.
This is a process that has been going on for at least ten years if not more. During the Obama years, the US government did nothing about it. As a result, a great deal of tech and other US manufacturing moved to China. Trump's move is telling the Chinese to knock it off; there will be a steep price if the practice continues. This is a good thing. China is a world economic power. It has to act like a responsible member of the world community, not a pirate, if it wants to stay a part of that community.
The Chinese are threatening to respond with countermeasures of their own. Supposedly, these measures will target the groups who voted for Trump. We will see soon enough how the Chinese react. The key, however, is that the USA not give in to these Chinese threats. In the near term, the pain inflicted on China of possibly losing the US market is a lot worse than the pain the US would suffer at the hands of the Chinese. President Xi of China will not want to have his nation's economy take a serious hit in a trade war with the USA. China claims that its GDP is growing by more than 6% per year, but many economists think that the real growth rate at the moment is something like 1.5%. A hit in a trade war could lead to a recession in China, something that the Chinese haven't seen in a long, long time.
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