 |
New leadership is coming to the enfeebled State Department. Unfortunately, it is coming from the militaristic, Death by China school of diplomacy. |
Diplomacy requires work, to understand what we need, what they want and then to find a compromise that benefits everyone.
Here are a few items that require attention regarding our trade relationship with China:
- China charges a 25% tariff on autos imported from the U.S. and the U.S. has a 2.5% tariff going the other way (China is about to send cars to us in quantity, so this is important!)
- U.S. companies in China are coerced to transfer technology to a Chinese partner. This is not the case for foreign companies operating in the U.S.
- U.S. companies that offer Cloud services in China must use servers operated by Chinese partners located in China.
This situation requires negotiation! This means putting in the time and effort to work out a deal.
Pulling out of TPP was ignorant. It forfeited leadership in the Pacific rim to someone else and eliminated a bargaining chip in negotiating with China. Pulling out was good for bluster, sound bites and maybe appealed to the base but ultimately is very counter-productive. The TPP eliminated 18,000 tariffs in a twelve-nation market with the most dynamic economies in the Pacific. The pact would have leveraged our advantages in high value-added manufacturing and entrepreneurial innovation.
We need to turn this GunBoat around!