Trade with China makes a prosperous strong America
America’s relationship with China has been a crucial aspect of how both countries have used their business and trade opportunities to become the two biggest economies in the world. Earlier this year, the United States took a big step forward in strengthening this relationship, establishing a 10-point deal that opened U.S beef imports into the Chinese market after more than a decade of isolation.
Subsequently, this agreement also allowed China to export poultry into the U.S market. The decision was celebrated by leaders in the beef industry and acknowledged as a first major step toward a new, promising relationship with the Asian country. However, like most relationships, there are times when every decision made will not be promising to both parties, and can actually represent a loss for everyone involved.
Recently, the U.S. government announced an investigation to examine China’s intellectual property practices under Section 301 of the Trade Act of 1974. This step was taken over the concern that China might be stealing American intellectual property. As President Trump stated, “We will safeguard the copyrights, patents, trademarks, trade secrets and other intellectual property that is so vital to our security and to our prosperity.” Although no direct actions have been taken against Beijing, the decision was certainly not positively embraced by Chinese officials.
With two major economies involved, conversations around a trade war between the two have become the center of attention of this relationship, and one that would actually hurt not only our political relationship with China, but our economy as well. For starters, it’s important to note how the two countries mutually benefit from trade and how stepping back from their current ties would limit our opportunities to expand our market and achieve economic growth.
In 2016, China was our third-largest export market. In fact, according to the U.S. Trade Representative Office, goods traded between the two accounted for more than $640 billion last year alone, a crucial exchange that could see itself affected if both countries were to pursue a trade war. For the U.S., it means $53 billion in service exports and another $115 billion in goods exports to China, which include categories such as electrical machinery, vehicles and aircraft. Not to mention U.S. agriculture exports to China, which totaled $21 billion in soybeans, grains, cotton and pork in 2016.
In addition to the billions of dollars generated from our exports to China, there’s also the many jobs across the country — 2.6 million to be exact,according to a 2017 report by Oxford Economics — that are supported because of this relationship. American workers from a wide range of sectors, such as the manufacturing or automobile industry, could risk losing their jobs. And as a crucial aspect of our agricultural exports to China, American farmers could be the most affected in the event of a trade war.
It’s known that the Chinese government opposes any protectionism against trade. Nevertheless, this would not stop it from taking the measures it believes necessary if the environment around trade with the U.S. was challenged. This could lead to higher tariffs on U.S. businesses, millions of lost American jobs and fewer investment opportunities. According to Oxford Economics, American families were able to save $850 in 2015 thanks to trade between the U.S. and China, so damaging this relationship wouldn’t just affect the companies or investors looking to expand their opportunities in China, but it could also hurt consumers by making everyday products more expensive.
Actions of this kind cannot be ignored. Economic superpowers should focus on tearing down barriers to trade instead of building more obstacles around it. Think about the American companies and workers that would be affected if our nation took a step back on trade, and how it would put the country at a disadvantage with the rest of the world. As we continue to grow among the global market, let us seize the opportunity to strengthen our relationship with China, keeping our trade opportunities open and making our way toward a more prosperous economy.
Sara Croom is executive director of the Trade Alliance to Promote Prosperity. She worked for years on Capitol Hill for House Majority Leader Tom DeLay and served at the White House in the Office of Legislative Affairs under President George W. Bush.