In the 2016 U.S. presidential campaign, Donald Trump vowed to take a hard line against unfair traders, and identified China as the top offender. This week, President Trump made good on that pledge by imposing tariffs on solar panels made outside the United States. This move could be the opening salvo in the confrontation with China over trade that Trump seems to relish; it is more likely, however, to be the beginning of the education of the president in the realities of international trade in a deeply interconnected world.
While campaigning, Trump insisted that U.S. trade partners exploited American naivete, incompetence, ideological blind spots and corruption to gain unfair advantages over U.S. companies in international business competition. The result he claimed was the virtual destruction of the U.S. manufacturing sector, unemployment and the loss of something essential to the American character. Integral to the effort to "Make America Great Again" is leveling the playing field, which will redress trade imbalances and lead to a resurgence of U.S. manufacturing.
The first year of the Trump administration was marked by caution, largely because the president sought Chinese help in dealing with North Korea. His patience has seemingly run out, however, and the mood has darkened. The first concrete indication emerged last week with publication of the annual report by the Office of the U.S. Trade Representative on China's compliance with the World Trade Organization. The report gave full throat to Trump's complaints, arguing that "the United States erred in supporting China's entry into the WTO" and "that the WTO rules are not sufficient to constrain China's market-distorting behavior." After detailing numerous alleged violations, the report concludes that China "is not prepared to follow through on significant commitments to make fundamental changes to its trade and investment regime." To help China change its mind and honor those commitments, the U.S. this week imposed 30 percent tariffs on crystalline-silicon solar cells and modules made outside the U.S.
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