Think about what will happen if we keep sending 500 billion dollars a year to China. China gets stronger and we get weaker. This is a war that we must win or eventually China will dominate the US. Maybe you are OK with that. I’m not. Wars are painful sometimes.
Especially if they're fought stupidly.
The things we make, through agriculture and manufacturing account for just 20% of the US GDP. It's 47% of China's. We can argue about what the optimal levels should be, and how much unfair trade practices are damaging the US economy, but we didn't have a trade deficit with them, we'd be doing something wrong. We have a service economy.
Isn't it common sense to attack your enemy's weakpoint? We put a tariff on a good, they put one right back, but we want their goods more than they want ours. We can take more economic damage, but why should pyrrhic victory be the aim from the outset?
China's theft of intellectual property does more damage to the US economy than the trade imbalance. Thing is, it's rather impractical to prevent most intellectual property theft. We might not be able to make much progress on piracy, but they have a massive conduit for stealing our trade secrets that we can do something about.
Undercut the theft of our intellectual property by undercutting their intellect. They want our higher education way more than we want their's.
English is compulsory for Chinese university students. Most they abroad are sent here. There are 363,000 studying in the US, and China actively encourages them to steal trade secrets. Only 11,000 US students are studying in China.
Levy a 100% fee on the tuition of Chinese students in the US. This will reduce demand on US education, lower tuitions, and make it easier for US students to be accepted, especially in STEM. It will put a greater burden on Chinese higher education. We could even use the money to subsidize the tuition of low income American students.
Optionally, we could put the money in a fund, that after graduation, was payed back to the Chinese student over a long period of time. Forfeiting the money to subsidize American education if they left the U.S. Only the smartest and richest Chinese students would be able to attend school here, and the more we could convince to stay, the more resources China would have wasted in raising them.
But Trump wouldn't do any of that, because he wants to play to his base, who imagines an economy of old when the largest sector of our economy was manufacturing. It's not anymore. The world has moved on. So instead of putting pressure on just the rich in China, he's just gonna spread the pain around so that everyone in both countries feels it.
