Trump Right to Call for Tariff on Chinese Goods

Say whatever you want about Donald Trump: He didn’t get to the top of America’s real-estate industry without understanding international markets. His breadth of knowledge and experience is why this young businessman, along with dozens of other Apprentice contestants, valued his guidance so much. Later, my congressional run reinforced my regard for Mr. Trump’s understanding of our politics and our economy.

Some folks don’t share that regard. By proposing a 25-percent tariff on Chinese goods, the real-estate magnate and possible presidential candidate has invited the wrath of low-tariff dogmatists who believe they know more about creating jobs than a guy who has actually created jobs.

Mr. Trump saw China’s unfair trade dominance firsthand when he found he had little choice but to buy inexpensive goods from China for his building projects. I see it firsthand as well in my spirits business; it’s an ordeal finding even simple things like cheap glass made in the U.S.

Many economists’ visceral support for “free trade” can at least be attributed to the ivory tower blinders so commonly found on academics. For America’s CEOs–like those in charge of manufacturing firms like Caterpillar–the motivation is more disturbing. They are myopically committed to short-term profits, unable to see how they’re endangering their own companies’ futures—not to mention their nation’s future.

Mr. Trump’s call for a tariff should resonate with any American who doesn’t want to see our manufacturing base, to the extent is still exists, sucked dry by an economic parasite. And that scenario is fast approaching: The International Monetary Fund projects that America will lose its distinction as world’s largest economy to China in 2016.

Measured in Purchasing Power Parity (income and spending within a domestic economy), China’s economy will grow from $11.2 trillion in 2011 to $19 trillion five years hence. Our own economy will grow from $15.2 trillion to just $18.8 trillion in that time. America’s share of world economic output will decline to 17.7 percent while China’s is projected to reach 18 percent.

By some measures, China is already beating us. It recently became the nation with the highest manufacturing output. While we were in recession last year, Chinese manufacturing expanded by 18 percent and its economy grew by $2 trillion, Manufacturing Digital recently reported.

The competition for the top economic spot has not been a fair fight. Mr. Trump has said he’d “love to have a trade war with China.” Those who recoil at that suggestion should face the facts: China already has declared a trade war on us, and we must decide whether or not to surrender. Our fighting back would truly be a war on terror—on economic terror, for China is an economic terrorist nation that undermines our working men and women by keeping its currency undervalued and extorting technological expertise from U.S. companies who locate branches on their shores.

This makes a mockery of true free trade, for free trade must be fair trade. China extorts our companies’ business expertise and uses tariffs and quotas to block our manufacturers’ goods, like those used to make steel and aluminum, from their shores. The Chinese are brutally taking advantage of us.

American branches employ Chinese workers who make a pittance compared to American workers and avoid the reasonable safety and environmental standards America enjoins. All the while, China heavily subsidizes industries in which it has no natural competitive advantage, building them up to tower over their global competitors.

Take the paper industry. According to the Economic Policy Institute (EPI), China tripled its paper production over the last decade in no small part with the infusion of $33.1 billion in subsidies from 2002 to 2009. Before 2008, we Americans manufactured more paper products than any other nation. We lost that top spot to China that year.

Countries depend on a strong manufacturing base for their economic health, and there too we have suffered significant losses. According to the Coalition for a Prosperous America, manufacturing employment lost 6 million jobs in the last decade. That’s not simply due to higher productivity: In that same period, 57,000 employers have disappeared.

Our nation cannot remain a global commercial power if we sit idly by as China continues its rapacious ways. Economic dominance, and in turn military dominance, flow from making what the world consumes. It’s no coincidence that America was the world’s number-one manufacturer for over a century and has for most of that time been its foremost superpower. If you’re still wedded to freely importing Chinese goods even as China doesn’t reciprocate, think about what this policy will do to our two countries’ relative military strengths. China clearly wants hegemony in the south Pacific and beyond. Why are we feeding the beast that desires the kind of military power only America has enjoyed in recent memory? And let’s not forget, China will solidify that dominance with a massive nuclear capability.

There is too much at stake to continue on the current path. American elites, if they are serious about wanting America to remain Number One, should ditch their cynicism about Donald Trump and rally behind his call to put China in its place.