Here in Kansas, the brewing trade war between the U.S. and China looks particularly frightening.
Agriculture and aviation — two of Kansas’ most important exports — are at risk of large tariffs. This is one war where the Sunflower State is full of flower children. Let’s give peace a chance, the farmers chant.
Fears aside, there are reasons to believe the U.S. should become tougher on trade with China. The solar industry may be a prime example. Yes, in this war, even rays of sunshine are cause for concern.
While it is tempting to think this trade war is about protecting blue collar American jobs and stemming the tide of cheap imports into America, a recent article in The New York Times argued it really is about who is going to control the high-tech industries of the future.
The solar industry is a worrying example, the Times’ Shanghai bureau chief Keith Bradsher reported on Friday. His article noted that until about 10 years ago U.S. companies played a leading role in producing solar panels. Then, the Chinese government decided to finance a major expansion of the solar industry. Today, 75 percent of the world’s solar panels are produced by Chinese firms.
True, President Trump is no fan of solar panels, preferring coal-fired power plants, but even his administration can see the beginnings of a dangerous trend. “China’s success in producing solar panels has given Beijing a blueprint for seizing the lead in a long list of other high tech industries,” Bradsher wrote.
China has a $300 billion plan called Made in China 2025. It calls for using state-controlled banks to make low-interest loans to high-tech industries. Among the goals are acquiring Western competitors and building immense factories with significant economies of scale, the Times article reported.
This is the sort of practice that free trade frowns upon. It is the sort of future America should be worried about. China is not a free nor democratic country. It is in no one’s interest to see it control the most important industries of tomorrow.
Whether a traditional trade war is the right method for pushing back against China, however, is unclear. Whether anyone wants Trump as a general in this war also is questionable. His sense of strategy seems to be lacking. If we are going to fight China, it would be wise to have some friends standing by our side. Trump’s strategy on this and so many other matters has alienated our key allies, and now we find ourselves largely going alone in this battle.
It may well be a battle worth fighting, but only if it is fought smartly. In the meantime, Kansas farmers — and many others — will wait and worry with good reason.