Arrias: Tariffs and Politics

Last week President Trump imposed tariffs on, among other things, Chinese steel and aluminum, as well as placing restrictions on various investments by China in US markets. Commentary mainly seems to have come down in opposition to the move, noting the US has a $375 billion trade deficit with China; that many of our consumer products are made in China so tariffs will end up hurting US consumers directly; and that China is a major importer of US agricultural products, especially soybean, providing China an opportunity to retaliate.

Perhaps it’s true that tariffs are often a form of self-punishment more than anything else; their immediate affect often making various goods more expensive for the country imposing the tariffs, without materially affecting the target country.

But there’s another side to the argument, the side that says this isn’t, or shouldn’t be, an issue of economic fine-tuning, of trying to right wrongs of disparate pricing as a result of some economic strategy on the part of some Chinese ministry, but rather an issue of political reprisal made necessary by the actions of the central power in Beijing.

Begin with this: China is determined to have its way in the world. All countries are not equal; the perspective that China as the dominant world power would be fine, no different than the US, is at odds with China’s actual behavior.

Whether encroaching on the South China Sea, occupying Tibet – and working to change Tibet’s demographics, encroaching on its neighbors’ borders, or using economic leverage to leave countries like Sri Lanka, Djibouti, Pakistan and any number of Sub-Saharan African nations with mounting debt problems (and hence beholden to Beijing), China is spreading and doing so with every intention of leveraging these gains against the rest of Asia, the US and anyone and everyone else who gets in their way.

And we should remember that China’s “fingerprints” can be found on the nuclear weapon programs of not only North Korea and Pakistan, but also the nascent programs of Syria, Libya and Iran; search the net for articles on AQ Khan, the founder of the Pakistan nuclear weapon program, and his connection with China.

Add in a long record of intellectual property theft and industrial espionage for good measure.

And then there’s China behavior to its own people. President-for-life Xi presides over a state-of-the-art surveillance state. Everything anyone does electronically in China is monitored, on the Internet, in emails, on cells, etc., commercial or private. Tens of thousands are employed to wade through this mountain of material, while China is engaged in development of cutting-edge super-computers. Rest assured they’ll be used, among other things, to parse all this data.

Meanwhile, China is setting up a network of cameras that will, eventually, cover every nook and cranny. Add in a few more super-computers, facial recognition and artificial intelligence and China will soon find itself in a world eerily like Philip K. Dick’s “Minority Report,” with police engaged in arrests of crimes before they occur.

And their persecution continues of various minorities, though little reported in the press (Uighurs, Christians, Falun Gong, etc.) One would suspect that, with the ever-increasing capabilities of the surveillance state, these persecutions will also increase.

So, why hasn’t there been talk of tariffs before now? If what China is doing is so egregious, so clearly wrong, why hasn’t anyone spoken up before now? While there’ve been routine complaints about this or that, in particular concerns about China’s theft of intellectual property, the truth is that we were convinced by a cadre of academics, politicians and businessmen that if we only helped China modernize, and turned a blind eye to “minor” transgressions, China would eventually join the rest of the world in a liberal international order of free states, enjoy the benefits of free trade, and end all these predatory practices.

Didn’t quite work out that way.

And so, the President has imposed some tariffs on China. But, if the issue is that what China is doing is dangerous to our nation as a whole, are tariffs the right answer? Tariffs are efforts to find fine-grained economic answers to economic issues, (something governments are terrifically poor in doing). But the problem isn’t really economic, it’s political. There’s a moral and political priority here that outweighs any effort to develop a precise economic response, a priority that calls for a different answer.

The word for that is embargo.

Copyright 2018 Arrias
www.vicsocotra.com

Written by Vic Socotra

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