As the trade war with China continues to surge under Trump’s presidency, there is a newfound momentum among the current administration to embrace an “all or nothing” approach to bring it to an end. While the administration had previously been working toward striking a deal that would benefit the United States, a partial deal may not be the way the administration is heading.
A key barrier to ending the ongoing trade war is grounded in the continued threat China represents to U.S. intellectual property, with the argument that a trade deal that does not directly thwart – and essentially end – the ongoing trade secret and intellectual property violations of the Chinese should, in fact, be rejected.
There are countless violations across multiple industries to U.S intellectual property by the Chinese – from stealing technology directly from American companies, to leveraging the exchange of IP as the cost of doing business with China, to national security vulnerabilities related to China stealing intellectual property from the United States for military purposes. It has been estimated that Chinese IP theft from the U.S. costs between $225 billion and $600 billion annually.
Adding to the tension is the failure of Trump’s trade war to establish a more solid global coalition among partners around the globe. Take a look at Australia, a country that is constantly managing a delicate balancing act when it comes to how it operates within China. Since Australia established a trade deal with China in 2015, it has been forced to walk the tightrope with the super power – as the country contends to participate in the world economy as a midsize country – who benefits from maintaining favorable relationships with both the United States and China. While Australia relies on the United States when it comes to national security matters, the country is well aware that its economics are deeply entangled with China. A testament to that relationship can be found in Australia’s booming wine trade. Since 2008, Australia’s wine exports to the United States have fallen 37 percent, while exports to China have risen a staggering 959 percent.
Others argue that China poses a threat to the U.S.’s position as the world leader in technology development. Today, there is a newfound awareness that not only is China successfully innovating (leveraging stolen IP or not), it is starting to gain traction over the United States in certain tech arenas.
“China is closing the technological gap with the United States, and though it may not match U.S. capabilities across the board, it will soon be one of the leading powers in technologies such as artificial intelligence (AI), robotics, energy storage, fifth-generation cellular networks (5G), quantum information systems, and possibly biotechnology,” cited the Council of Foreign Relations in a recent report.
There is an argument to be made that everyone in the United States is feeling the costs of the ongoing trade war, and is dramatically impacting the cost of raising children. Some popular items of children-focused products ranging from cribs to toys are already seeing price increases. Critical baby products have experienced as much as a 25% increase in cost over the past year alone. Soon, it will be increasingly difficult to find a Chinese-made product on U.S. store shelves that doesn’t have a higher price tag because of new U.S. tariffs.