March 18, 2019
We know that the secret to being a successful capitalist in today’s America is to be able to cry effectively about the need for the government to save you from the market (see the Wall Street bailout from the financial crisis). We got more evidence of this basic truth in a New York Times piece on the status of the Trump administration’s trade negotiations with China.
The piece includes a reference to a report from the Trump administration that claims companies in the United States are losing at least $50 billion a year (0.25 percent of GDP) as a result of China not compensating them for their intellectual property. This is a very impressive figure since China’s total imports from the US were just $120 billion last year. (Even more impressive is a claim cited in the piece that our current tariffs on China would “reduce United States gross domestic product by at least $1 trillion within ten years.”)
Anyhow, the point of the piece is that the Trump administration is focusing in its negotiations on strengthening protections for US intellectual property claims, and in particular stopping Chinese policies that require technology transfers as a condition of investing in China.
It would have been worth mentioning that this effort by the Trump administration would make outsourcing jobs to China more attractive. (It is more profitable if you can locate operations in China without transferring technology than if you do have to transfer technology.) This is yet one more way in which the government promotes policies to redistribute income upward.
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