When Andy Puzder said in an opinion piece for Fox News on Saturday that it was China that had launched a trade war against the United States 18 years ago, he repeated the platitudes often made about China’s trade surplus with the US.
Simply put, he claimed that the US has been ripped off by China in their bilateral trade over the past nearly two decades. He said that China blocked US goods from entering its market, China forced US companies to transfer technology and stole commercial secrets.
How can bilateral trade between the world largest and second largest economies last for nearly two decades with the former having been a loser and the latter the beneficiary all the time? If that were the case, their trade relations would not have lasted. No previous US president and their economic advisors would have been foolish enough to allow the US economy to suffer all the time from its trade deficit with China. If they did, they would not have been in the American people’s good graces.
When China opened its door to the outside world in the late 1970s, the economic engagement between China and the US met each other’s needs: China needed capital and technology while the US needed to outsource its manufacturing and find new markets for its products. Like the pin and tail of a joint their needs dovetailed.
For China, the result was the rise of “made in China”, which created a lot jobs for China and helped a great deal in lifting millions of Chinese out of poverty, while at the same time providing the world with reasonably priced consumer goods, US consumers in particular. What has been particularly noteworthy in this process has been the fact that transnational companies, those from the US especially, have benefitted a great deal by investing in China.
There has never been one-way trade between the two countries, and China is not a free rider and neither is the US. There has been a point of convergence where the interests of both have met, and this has made it possible for bilateral trade relations to remain general smooth over the past four decades, especially in the past nearly two decades since China’s accession into the World Trade Organization in 2001.
There may be some problems that have emerged that need to be addressed. But it goes against the facts to say that China has long been ripping the US off in their bilateral trade. Pressuring China to capitulate to the US unreasonable demands by just pointing accusing fingers and twisting the facts will not help to straighten out bilateral trade relations.