China is Not a Really Bad Trading Partner

As far back as the 1950's, it was pointed out the people of every country tend to look at themselves as all good and other countries as all bad. That is going on now in the U.S. about China. Of course, the Chinese feel the same way about themselves. It just is not that simple.

Trump seems to feel there is political advantage to picking a fight with China over tariffs. The truth is China's protectionism is not that bad. Several countries have weighted average of tariffs higher than China. They are Argentina, Brazil, India, South Korea, Indonesia, South Africa, Turkey, Russia, Saudi Arabia and Mexico.

Decades ago as a college student I remember learning the circumstances where tariffs were acceptable. One was called "Infant Industries." Tariffs protected emerging industries, it was said, until they had the economies of scale to compete. China uses that same argument for its tariffs today. It needs a prosperous middle class and assembling smart phones will not get it there.

There is the argument China steals our technology. No doubt it does some of that. All countries do that, even the U.S. so it is said. I remember when Nikita Khrushchev visited the U.S. He came by ship instead of air. Aids went all around the New York area buying TV sets and whatever to be hauled home for reverse engineering.

There is the argument China's taxpayers subsidize some products making them cost less and sell for less. They do it more than we do but we subsidize agriculture and, until the foolish move by Trump, sold these artificially cheap products to China. 

In politics, the argument that we a good and other countries bad almost always works to a politician's advantage. Unfortunately, it works when it is not true.