Senior Democrat Congressman Brad Sherman unusually veered from his Democrat leadership in offering some support to President Trump. Speaking on the ongoing trade negotiation process between China and the United States, Sherman said Trump was not to blame for increased tensions and currently unfair trade practices.
The California Democrat said China was the one who “declared trade war” and that Trump was on a growing list of U.S. presidents looking to win it.
“We’re now told that this is Trump’s trade war,” Sherman said during a Foreign Affairs subcommittee hearing, as Washington Examiner report. “No, China declared trade war on the United States, 18 years ago.”
From the Washington Examiner:
Sherman traced the economic clash back to 2000, when lawmakers formalized China’s privileged economic relationship by voting in favor of “permanent normal trade relations” with the Communist power. That legislation codified what previously had been known as “most-favored nation” status in trade with the U.S. And Sherman, who voted against the bill at the time, warned colleagues not to flip-flop on the policy out of hostility to Trump.
“Before Democrats get carried away with the desire to repudiate our position, remember that 65 percent of Democrats voted ‘no’ on MFN [most favored nation status] for China,” he said. “We should not abandon that position just because some Republicans and the White House have embraced it.”
That doesn’t mean Sherman approves of Trump’s policies toward China, which he described as “timid, weak, haphazard, and unplanned.” A top Republican on the panel likewise raised doubts about the tariff policy, while echoing Sherman’s denunciation of China.
What people refer to as the “trade war” is a back-and-forth series of policies or tools implemented to try and bring the other country to the negotiating table.
Trump and the U.S. have announced a number of tariffs on Chinese imports and China has retaliated with tariffs of their own. Trump seems poised to wait out the status quo and see which economy holds up better.
As Forbes reports, the U.S. is likely to win such a situation:
China businesses are as aggravated about the trade war brewing between Beijing and Washington as their U.S. counterparts. But China companies may have more to sweat.
Shanghai companies are talking with exchange officials to figure out what’s at stake. Mainland Chinese equities are in a bear market, despite Thursday’s gains. The risk of some companies being banned from trading if their stock falls too much is a real possibility should the latest trade threats come to pass.
On Wednesday, investors woke up to $200 billion more of potential tariffs. Chemical imports are on the hit list, with ingredients used in making medicine part of it.
From a market perspective, the trade war is being won by the U.S. The S&P is down only 3% since the January 26 high: better than Europe, Japan, Canada and Mexico.
According to the Washington Examiner report, Florida Congressman Ted Yoho made comments similar to his Democrat colleague on the use of different tools and policies to combat Chinese trade deficits.
“Our hearing today turns on one of the only remaining areas of disagreement: Which tools should be used in response?” the Asia-Pacific subcommittee chairman said. “Whether or not they are the right tool for the job, U.S. tariffs are based on longstanding wrongdoing from the Chinese side. China’s tariffs are pure retaliation designed to do nothing more than inflict pain.”
Yoho called instead for “targeted sanctions” on companies that flout U.S. laws, as well as non-tariff restrictions on Chinese investments “and upgraded protection for us and intellectual property innovation. He warned the administration against accepting China’s reported offer to reduce the trade deficit by $200 billion in order to avoid the tariff clash. “A brief reduction in the trade deficit will do nothing to solve the main challenges of the trade relationship,” he said. “It won’t reduce the long-term threat to U.S. competitiveness in advanced technologies; It won’t reduce market access restrictions; and it won’t stop forced tech transfer or blatant [intellectual property] theft.”