For at least two decades, Republicans and Democrats alike have known about and tolerated China’s systematic violation of trading rules that the United States observes. Our leaders have refused to do anything about China’s lawless behavior, primarily because the Wall Street donors who finance both parties have fomented fears about a trade war.
The China problem emerged in the year 2000, when Republican Congressional leaders conspired with President Bill Clinton to give China preferred access to the American consumer market. Normal trading privileges paved the way for China’s entry into the World Trade Organization in 2001, despite its failure to meet basic requirements for membership.
Phyllis Schlafly strongly opposed the trade giveaway to China, which never would have attained the 2/3rds vote required by the Treaty Clause in the Constitution in order to pass. Instead, this handout to China was passed as a non-treaty.
The naysayers were proved right as China has flouted the rules for the last 18 years.
In its early years of access to the American market, China profited by paying extremely low wages to people making ultra-cheap products. Now China is rapidly moving up the food chain to sell us high quality products containing innovative technology that was created and developed in the United States.
How did the Chinese get their hands on the latest American high tech? First, by stealing it: China’s commercial espionage is estimated to cost U.S. companies over $20 billion a year, with a cumulative total of $600 billion over 20 years.
China also forces American companies to share their technology as the price of access to the Chinese market. Such requirements are supposedly prohibited by the WTO, but with no one stopping them, the Chinese trade surplus in goods reached a new all-time record of $375 billion last year.
“We have a tremendous intellectual property theft situation going on,” the president said on March 22 as he signed an order that could eventually impose tariffs on hundreds of Chinese products. As Peter Navarro, director of the White House National Trade Council, explained, “What the United States is doing is strategically defending itself from China’s economic aggression.”