Tariffs seen as way to fight Chinese intellectual property theft

China is accusing Trump of using bullying tactics by imposing billions in tariffs on goods imported from the communist country, according to CBS News.

A spokesman for the Chinese Commerce Ministry said accusations of forced technology transfer and intellectual property theft “seriously distorted the history and reality.”

But Betsy McCaughey, writing at Townhall, notes that the tariffs are being called a theft tax, because the Chinese government policy has been to steal or extort American intellectual property. “China steals something between $225 billion to $600 billion worth of fashion designs, pharmaceutical formulas and new technologies from U.S. companies every year, according to the Commission on Theft of American Intellectual Property,” she writes.

Meanwhile, at The Wall Street Journal, Peter Navarro, an assistant to the president for trade and manufacturing policy and director of the White House National Trade Council, reports that American companies are being forced to accept technology transfers just to gain access to the huge Chinese market.

“In 2010, for example, General Electric formed a joint venture with the state-owned Harbin Electric to manufacture wind turbines,” he writes. “The venture ended after three years of sharing technology. As a result of deals like this — and at least one conviction of a Chinese wind-turbine maker for trade secret theft — Chinese firms’ share of the international wind turbine market rose from 9% to nearly 25% over the past decade.”

McCaughey says the Chinese apparently believe that “free market” means steal what you want. The Chinese government politely calls it “the assimilation and absorption of imported technology.”

“American Superconductor Corporation was almost put out of business, its stock value driven down 96 percent, when a Chinese wind turbine maker stole its technology and flooded the Chinese market with copies,” explains McCaughey.

Navarro points out a similar problem with solar energy. China’s theft of American technology has resulted it now having six of the top 10 producers of solar panels, including the top two, though it previously had no company in the top 10.

“If China continues to escalate this trade dispute rather than treat the U.S. fairly, Americans may finally wake up to an economic and national-security threat that the president has seen coming for decades,” Navarro concludes. “With its huge trade surplus with the U.S., China must know it has far more to lose in this trade dispute.”

2 comments on “Tariffs seen as way to fight Chinese intellectual property theft

  1. Deleted says:

    So teriffs are a good thing? Or only a good thing if some good rational is used?

  2. Rincon says:

    Good thing? They’re tariffic! Sorry, I couldn’t resist.

    In truth though, much more than tariffs is needed to prevent intellectual theft. They miss a great deal of intellectual thievery through computer hacking and the hiring of Chinese nationals by U.S. businesses on U.S. soil. If we can’t stop intellectual piracy on our own soil, how do we expect any kind of honest effort by the Chinese government to stop it on their soil? Ain’t gonna happen. Trump is oversimplifying a difficult and complex problem, and doesn’t bother to explain his goals to the American public, while the media doesn’t even make an attempt to analyze the effects of free trade between countries on our economy.

    As for our trade imbalance, please dismiss any reference by the media or Trump to our deficit in terms of goods sold (the most common measurement). That is 100% worthless. For example, when services are included, we have a trade surplus, not a deficit with Canada, so tell me again, why are placing tariffs on Canadian goods? Just one more Trump lie. OK, not a lie, just his standard misinformation. http://money.cnn.com/2018/03/15/news/economy/trump-canada-trade-deficit/index.html

    As I understand it, our trade deficit enables us to borrow money at 0% interest from the rest of the world. If the Chinese accept a dollar above a trade balance for merchandise, they have given us a dollar’s worth of merchandise for a piece of paper (or bits in a computer) promising that they can purchase something from us in the future. If they buy oil from Saudi Arabia with that same dollar, Saudi Arabia gives them a dollar’s worth of oil for the promise that we will sell them a dollar’s worth in the future, but Saudi Arabia decides to buy a dollar of German merchandise, and so it goes. The hope is that these promises to pay will merely circulate around almost endlessly because they are so useful to the holders. Not too bad of a deal for us.

    Economists seem to feel that even if a foreign government subsidizes its home companies, they are actually putting the money from their taxpayers into the pockets of their customers. As for stealing American jobs, it’s probably not a likely cause, since those Americans buying discounted goods have more money in their pockets in order to buy more American made goods. It’s just as bad or worse for a billionaire to buy foreign stock than for a consumer to buy a Chinese item. In both cases, American dollars go overseas and become unavailable to consumers.

    So what is the answer? Many economists feel trade deficits don’t need an answer because they’re not a problem, although intellectual theft most certainly is. Here’s the view from the conservative Cato Institute:

    And from Investopedia: https://www.investopedia.com/articles/economics/08/trade-deficit-effects.asp

    I can go on, but I think you get it. As for intellectual theft, how come U.S. companies are so willing to put their intellectual property at risk by operating in other countries? Answer: American business thinks about a 5 year future at most. That’s capitalism!

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