2018 Administration Priority: Overhauling U.S. Trade Policy
AILSA CHANG, HOST:
With tax legislation behind him, President Trump could make some major decisions this month on another economic promise - reducing the U.S. trade deficit with China. That's the figure that measures how much Chinese imports exceed American exports. And the gap grew during Trump's first year in office. Here he is on his visit to China this past fall.
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PRESIDENT DONALD TRUMP: I do blame past administrations for allowing this out-of-control trade deficit to take place and to grow. We have to fix this because it just doesn't work for our great American companies, and it doesn't work for our great American workers.
CHANG: Now the president is reportedly considering the hard-line move of raising tariffs on some electronics from China. And Wendy Cutler says that could be a big mistake. She was a deputy U.S. trade representative under President Obama, but she told me that she agrees with the Trump administration on this point - that the U.S. should take some action against China.
WENDY CUTLER: There's a growing frustration in the United States that China is not operating on a level playing field and that while Chinese companies have access to the U.S. market, our companies don't have fair access to China's market.
CHANG: How so? Like, what are some examples?
CUTLER: Well, the most pressing example now is the whole issue of intellectual property rights and, in particular, the Chinese practice of forcing U.S. companies to share technology as a condition for investing in China. The practice is, if you want to invest in China, we want to share in the technology, we want to learn about your technology, and we want to be in a position, I guess, ultimately, to be able to make these products at some point without you.
CHANG: The White House could also make a decision soon on certain appliances most of us rely on every day. The president is said to be considering sweeping tariffs on Chinese-manufactured washing machines, also solar panels because domestic makers of these goods say they have been hurt by Chinese imports. If these tariffs were to happen, how would American consumers and even American workers be affected?
CUTLER: Well, U.S. consumers would pay, and that is because - through higher tariffs, that means prices for these goods would go up, and perhaps a selection would go down. And so U.S. consumers will be hit.
CHANG: Would these tariffs, if they were to become reality - would they set us up for some sort of trade war with China? And what might a trade war look like?
CUTLER: Well, a trade war - no one wins in a trade war, and that's clear. And so in any trade war - let's just say the U.S. increases tariffs against imports from certain countries. U.S. consumers, let's say, would be the first to lose out then because prices would go up. But then if a country counterretaliates, they would then not welcome U.S. exports. And that would affect not only U.S. companies but also workers for those companies that produce the goods.
CHANG: Well, what is the risk to American businesses - particularly, American workers - if the White House doesn't impose new tariffs?
CUTLER: Once again, I think we have very legitimate concerns about wanting to address China's unfair trade practices, but increasing tariffs - it's very black and white. That goes against our World Trade Organization obligations.
CHANG: Wendy Cutler is a former deputy U.S. trade representative under President Obama. Transcript provided by NPR, Copyright NPR.