CPA Statement on Framework Trade Deal with China

May 21, 2018

Dan DiMicco, Chairman of CPA: “The Trump administration framework deal with China, as reported this weekend, is on the wrong track. China has agreed to buy commodities that it would buy anyway. The deal does nothing to reduce the US trade deficit, grow American jobs, or boost domestic manufacturing. The Section 301 tariffs are designed to address China’s technology theft and their plans to dominate advanced and high technology manufacturing. An agreement to sell agricultural and energy commodities is the result of bad negotiating and bad economic strategy. In addition, the concept of allowing 50/50 joint ventures when a Chinese company can buy 100 percent of a US company makes no sense. The fact that it'll be good for our financial industry is not meant to be dealt with in the 301, which is specifically a technology theft issue rather than a financial industry issue. This is not a deal that we are yet comfortable with or can be proud of.”

Michael Stumo, CEO of CPA: “The administration promised to fix the China problem. The framework deal reported this weekend only makes it worse. America is becoming a natural resource and tourism exporter to China, putting us in the economic position of a third world colony. China’s predatory capitalism is designed to displace America as the world’s largest and most advanced economic power. The deal announced by Secretary Mnuchin enables, rather than neutralizes, China’s state capitalism strategy. The focus for future negotiations must be to deny the benefits of forced technology transfer and state-planned capitalism that unfairly displace American value-added and advanced manufacturing supply chains.”

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  • Franklin Kirkland
    Thanks. This helps make sense of what we see in the news. To me, it is already apparent that Trump’s trade initiates, real or political, will likely be traded off for other considerations ( e.g., NK), abandoned in the face of establishment lobbying, or will end up with results in the margins (but no doubt with victories claimed). While the President loves to compare his economic results with Obama’s, we have not heard him mention that our 2017 trade deficit was 15% above that in 2016. Any wagers on how 2020, barring a recession, will compare to 2016? Brace for diappointment.