The Hill: Trump’s Trade Strategy: A Blueprint for a Bilateral Future

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Washington, February 3, 2020 | comments

The following op-ed appeared at The Hill.com on February 3, 2020.

With the signing of last month’s historic “Phase One” trade deal between the United States and the People’s Republic of China, President Donald Trump sent a loud and clear message to the hard-working Americans who were previously left behind by bad trade deals: you are forgotten no more.

A critical first step toward re-balancing America’s trade with China, President Trump made good on his promise to put “America First” by making sure American farmers, manufacturers and entrepreneurs are better protected from unethical and criminal behavior in the international trade system. With this first phase complete, I await eagerly the second and third phases whose negotiations must include other issues concerning China.

This deal, wherein U.S. manufactured goods exported to China are projected to increase by $11.9 billion and U.S. agricultural goods exported to China are projected to increase by $7 billion, is critical to districts like mine where manufacturing and agriculture are the life-bloods of the economy. For example, 15% of jobs in Allen County, Indiana, and 41.7% of jobs in Whitley County, Indiana, are in manufacturing. Likewise, Indiana is the eighth-largest agricultural exporter in the nation, exporting over $4.5 billion annually. This is the kind of deal working Hoosiers have been so desperately waiting for – a deal that past presidents never sought and which only President Trump could seek and deliver.

This deal also contains important commitments that could take our already-soaring economy (lowest unemployment rate in 50 years, Dow Jones rising above 29,000, prime labor force participation rate rising to 82.9 percent) to new heights. Those include promises to better protect the intellectual property of American businesses, the proprietary technologies of American enterprise long subjected to forced technology transfer, and American exports hurt from unfair currency manipulation.

Perhaps even more critically, this deal signals a shift in our national security and trade policy that lays a framework for future negotiations to address other problems with China.

Firstly, the president should force China to punish pharmaceutical companies that export fentanyl to the U.S. and kill thousands of Americans each year. From 2016 through 2017, China was the source of 97 percent of inbound shipments of high-purity fentanyl. The issue of fentanyl is related to another issue future negotiations with the Chinese must address: the subsidization of Chinese-owned corporations. In 2018, China doled out $22 billion in corporate subsidies – a blatant violation of WTO terms and conditions that hurts American exporters by making them less competitive. A cut of these subsidies goes to China’s chemical industry, much of which is legitimate but whose growth also means those companies exporting fentanyl grow as well. President Trump ought to state unequivocally: Beijing will stop subsidizing the death of Americans and American communities.

Likewise, Chinese-owned telecommunications firms like Huawei and ZTE continue to threaten U.S. national security. Despite being blacklisted by the U.S. Department of Commerce in May, Huawei, a Beijing-owned telecommunications firm which is the world’s largest supplier of network equipment used by phone and Internet companies, still raked in roughly $122 billion in revenue in 2019. While I am encouraged by recent news of the Trump administration’s intent to further block sales to Huawei, the Trump administration must stand strong and force the hand of telecommunications firms bent on dominating global markets beholden to the Chinese Communist Party. One way that the Trump Administration can stand strong is by expressing support for a bill I have introduced in Congress that would prohibit the United States from sharing intelligence with countries that allow Huawei to operate their 5G networks.

Finally, future negotiations with the Chinese must address cyber-hacking. Last summer, hackers backed by China’s Ministry of State Security broke into networks of eight of the world’s biggest technology service providers. Likewise, it was uncovered that, in 2016, Chinese intelligence agents stole National Security Agency tools and turned them around to attack U.S. allies as well as private companies in Europe and Asia. This is unacceptable and the president ought to preface that the safeguard of U.S. national security will be the foundation upon which any further trade negotiations rest.

With unprecedented commitments to protecting American workers and businesses, the “Phase One” deal is a huge first step in what ought to be a long journey towards a reorientation of U.S. relations with China. As further negotiations with the Chinese appear to be on the table, so too must be issues concerning drugs, business practices, and national security.

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