President Trump repeatedly talked about China's unfair trade practices. What were those?

Do other countries like China install unfair trade guidelines? Or, is China being targeted "unfairly"?


Peter Navarro, the White House National Trade Council and Office of Trade and Manufacturing Policy Director, put out a report called "How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World". In it there are many specific accusations against Chinese "economic aggression", with evidence cited for each. There's also a video of Navarro doing a press conference about the report. Here are the accusations:

  1. Physical theft and cyber-enabled theft of technologies and IP
    • Physical theft of technologies and IP through economic espionage
    • Cyber-enabled espionage and theft
    • Evasion of U.S. export control laws
    • Counterfeiting and piracy
    • Reverse engineering
  2. Coercive and intrusive regulatory gambits
    • Foreign ownership restrictions
    • Adverse administrative approvals and licensing requirements
    • Discriminatory patent and other IP rights restrictions
    • Security reviews force technology and IP transfers
    • Secure and controllable technology standards
    • Data localization mandates
    • Burdensome and intrusive testing
    • Discriminatory catalogues and lists
    • Government procurement restrictions
    • Indigenous technology standards that deviate from international norms
    • Forced research and development
    • Antimonopoly law extortion
    • Expert review panels force disclosure of PI
    • Chinese communist party co-opts corporate governance
    • Placement of Chinese employees with foreign joint ventures
  3. Economic coercion
    • Export restraints restrict access to raw materials
    • Monopsony purchasing power
  4. Information harvesting
    • Open source collection of science and technology information
    • Chinese nationals in U.S. as non-traditional information collectors
    • Recruitment of science, technology, business, and finance talent
  5. State-sponsored, technology-seeking investment
    • Chinese state actors involved in technology-seeking FDI
    • Chinese investment vehicles used to acquire and transfer U.S. technologies and IP (mergers and acquisitions, greenfield investments, seed and venture funding)

The report makes the case that they are all done in bad faith as part of a deliberate concerted effort to:

  • Protect China’s home market from imports and competition
  • Expand China’s share of global markets
  • Secure and control core natural resources globally
  • Dominate traditional manufacturing industries
  • Acquire key technologies and intellectual property from other countries, including the United States
  • Capture the emerging high-technology industries that will drive future economic Growth and many advancements in the defense industry

The tariffs are therefore partly retaliations in response to what the Trump administration views as aggressive actions by the Chinese state.

  • 5
    Of course; but the methods are sufficiently malicious that they should invite retaliation regardless of the deficit.
    – dain
    Jul 30 '18 at 15:30
  • 3
    It may help to see the tariffs being used as a geopolitical as well as economic weapon. Even if they hurt the USA (debatable), they can hurt the target even more. This gives leverage in negotiations (for Canada, NAFTA renegotiations; for China, the North Korea question).
    – dain
    Jul 30 '18 at 15:57
  • 6
    By that standard, all human conflict is a game of chicken because both sides always get hurt. Your metaphor proves too much.
    – dain
    Jul 30 '18 at 16:23
  • 3
    It's alright to just say you don't like protectionism and leave it at that; we clearly disagree here and I don't care to keep sniping about it.
    – dain
    Jul 30 '18 at 16:24
  • 8
    Playing devil's advocate here. By no means siding with China in this one. But basically the list also applies to US policies. The USA does half of the things on this list on a regular basis. Tariffs and regulations against specific states are on first page of US Foreign Policy play book. The US has no "trade barriers" but hell of a lot of "regulatory barriers" that shift everything into their play field. That's why most of Latin America refuses to sign free trade agreements with the USA. Because it means your products not being able to enter the US after they flooded your market with theirs.
    – hjf
    Jul 30 '18 at 20:15

Before we discuss qualitative "fairness", there's a practical reason to single China out even if it's not qualitatively different: scale.

US trade deficit is $795B total. Of that, $375B or 47%, is with China (source: Wikipedia) - dwarfing deficit with any other country (more than twice the size of next biggest entity, EU, and more than 5 times the deficit with biggest single country, Mexico). And the trade deficit in goods with china is 65% of total (source).

As such, reducing China deficit is the most effective way to reduce overall deficit, on per-country basis.

Additionally, that deficit is the result of the greatest import/export imbalance among major trading partners. If you ignore countries with less than $20B exports from USA, China exports 3.9 times more of what it imports from USA - with the next largest ratio being 2.1 for germany and 2.0 for Japan (source: same Wiki table, but exported to Excel and imports divided by exports and filtering out smaller importers of US goods).

As such, reducing China deficit via a trade war is the least negatively-impactful way to reduce overall deficit, as there are less exports to China to negatively affect.

The official reason for the first round of tariffs was theft of intellectual property (source):

The investigation concluded that China has stolen or coerced US companies into turning over their intellectual property through a series of state-run structural maneuvers, including its requirement that foreign companies partner with Chinese companies to access the Chinese market, said Everett Eissenstat, the deputy director of the National Economic Council for international economic affairs.

The investigation also assessed that China has stolen US intellectual property by hacking US computer networks, though senior administration officials said Thursday's tariffs would not account for the value of that intellectual property theft, which they estimated to be in the hundreds of billions of dollars.

I'm omitting other accusations as they were NOT actually leveled as part of the first round of tariffs (e.g. currency manipulation, pricing etc...)

  • 12
    This is assuming that trade imbalance is always bad, which doesn't seem an universal view on the matter: money.cnn.com/2018/03/14/news/economy/what-is-a-trade-deficit/… or nytimes.com/2018/03/05/us/politics/…
    – Fizz
    Jul 30 '18 at 15:06
  • 13
    @SSight3 "I’m way down on trade with restaurants, grocery stores, malls, and movie theaters. I keep buying from them, but they never buy from me. I must be getting ripped off, right?" - Rep. Justin Amash (R-MI)
    – C. Helling
    Jul 30 '18 at 15:24
  • 4
    That analogy is not applicable to the USA because it has a net trade deficit -- the deficit with China is not balanced out by surpluses from other countries. In the restaurants-and-groceries analogy, you have a "surplus" with your employer in the form of wages. If that "surplus" doesn't match the "deficits" with the restaurants etc, then you do have a problem.
    – dain
    Jul 30 '18 at 15:27
  • 3
    @SSight3 - regarding your statement about trade surplus: " US is a powerhouse in services, as well. Think media, finance and technology. In services, the United States ran a $244 billion trade surplus last year." So yes, US has become a major exporter of "soft goods" and has, for many decades now, less focused on manufacture of "hard goods".
    – BobE
    Jul 30 '18 at 15:39
  • 5
    The trade deficit is created by the forces of the free market. China offers most products much cheaper than the US equivalent. I thought the US loves the free market (e.g. 2000% price hikes on essential medication are OK because "free market!")? But now that they are on the loosing side of globalization, the US elites suddenly changed their minds... Jul 31 '18 at 10:27