Disputes with China costly but necessary

After months of fledgling diplomacy and bare rhetorical threats aimed at convincing Beijing to close factories that pirate American software and music, the Clinton Administration published a list of $3 billion of Chinese goods that could be subject to the largest sanctions ever imposed by Washington. China immediately retaliated with threats to block new American investments. In response to the sanctions, Chinese leaders promised to place enormous tariffs on American automobiles, telecommunications equipment and other goods. They insist such increases would be necessary in order to protect their economy from foreign influences. Although a trade war between the United States and Beijing would be costly for both, China’s piracy of American goods leaves the president with no choice but to further provoke the confrontation.
American industry is splintered about the threats of sanctions on Chinese goods. Hollywood and the American software industry back the administration’s demands, but the leading association of American retailers charged that the imposition of sanctions on clothing, textiles and silk is illegal and undermines the interests of U.S. workers. In fact, low-income families that rely on inexpensive clothes would be forced to pay higher prices for some goods. Nevertheless, intellectual property is one of America’s most valuable exports. Sanctions on Chinese goods aimed at breaking down Beijing’s protectionists policies merit support across U.S. industries.
China has emerged as one of the most important powers in world politics today. A reliance on lucrative, one-sided trade relationships with other nations, however, has facilitated its rise to superpower status. Historically, China’s economic policies have been designed to rake in billions of dollars from international exchanges while ignoring international trade norms. Only the United States maintains the international leverage to take Beijing to task.
U.S. workers and corporations pay a disproportionately high price for Chinese protectionism. American imports from China have grown much faster than exports, generating a merchandise trade deficit of $34 billion in 1995. The economic fallout of the increasing annual deficits depresses job creation, wages and growth. American corporate investment in Chinese factories, moreover, approached $3 billion in 1994, increasing the number of U.S. manufacturing jobs shipped overseas. The Clinton administration has no choice but to crack down on Beijing. America’s trade deficit for merchandise was a record $175 billion last year, and our nation’s economic losses are not being offset in other parts of the world.
Many forecasters predict China will have the largest economy in the world by 2025. Creating collaborative diplomatic channels with Beijing is crucial for our nation’s economic future, but the United States cannot afford to maintain its trade relationship with China without demanding some long overdue reciprocity. American leaders must make Beijing understand that it has to learn to play by the rules or risk losing its place in our profitable trading circle.