US economy

As Trump Moves to End Trade War With China, Business Asks: Was It Worth It?


That price might be worth it, business groups and China analysts say, if the administration makes a deal that substantively transforms Chinese industrial policy and gives American companies fair and reciprocal access to the Chinese market.

“We oppose the use of tariffs, period,” said Myron Brilliant, the executive vice president and head of international affairs at the U.S. Chamber of Commerce. “But we are at the same time supportive of this administration trying to get a deal that is not just consequential for today but will have lasting impact on the relationship and put the U.S.-China relationship on a better track.”

“Absent a deal, I think everyone loses,” he added.

But the deal under discussion, which could be wrapped up by late March, appears likely to fall short of the high expectations the Trump administration initially set and the significant changes critics say are needed to counter years of unfair economic behavior by China.

China promised to make its economy more market-oriented when it joined the World Trade Organization in 2001, and it has reiterated those promises many times since then, including in 2013.

Yet today the state has an even heavier hand in the economy than a decade ago, said Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics. The ruling Communist Party can influence private companies at will, and foreign companies face a variety of forms of discrimination that advantage Chinese firms.

Now, China is offering changes to its laws, including a significant rewrite of a law governing foreign investment. This is a necessary first step, Mr. Lardy said, but rewriting the laws may not do much good when the party is fundamentally above the law.

“Talking about rule of law and protecting property rights is one thing, but actually following through on it is a very difficult thing for a system where the party has been so deeply embedded for a long time and the rule of law is secondary,” Mr. Lardy said.



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