March 21, 2018
No, they are not endorsing his tariffs on steel and aluminum, but the paper is very concerned that Trump is not effectively protecting US intellectual property claims. The Post ran a piece that made it appear that a lack of protection for these claims should be a major concern for the public, as opposed to just the corporations that stand to lose profits.
The ostensible issue is that China allegedly doesn’t respect US claims to intellectual property in a variety of areas. The piece tells readers:
“Trade secret theft — most from China — costs the U.S. economy $225 billion to $600 billion annually, a blue-ribbon commission on intellectual property concluded last year.”
By contrast, it argues that Trump’s proposed tariffs on China’s electronic goods are misdirected:
“If Trump opts for a 25 percent tariff on all Chinese electronics, the cost to the U.S. economy over 10 years would total $332 billion, according to the nonprofit [corporate backed] Information Technology and Innovation Foundation.”
…
“China’s treatment of foreign intellectual property may have been only an irritant when it manufactured low-tech products such as toys or clothing and assembled electronics for export. As Beijing covets global leadership in advanced technology, its industrial policies have grown into a threat to American economic and military pre-eminence.”
In contrast to the $332 billion ten-year cost to the US economy that the Information Technology and Innovation Foundation (ITIF) calculated for Trump’s tariffs, the cost of the intellectual property protections over this period would run well into the trillions of dollars. In the case of prescription drugs alone, the United States will spend more than $450 billion for drugs which would almost certainly cost less than $80 billion in a free market. The difference of $370 billion a year is more than the ten-year total cost of tariffs on electronics calculated by ITIF.
If China could make free use of technology, then we would be able to get artificial intelligence, robots, and other cutting-edge technologies at much lower costs than if the protectionists have their way and can bottle up these new technologies with patent and copyright monopolies. This is fundamentally a story about pushing a policy to sacrifice in order to have further upward redistribution of income. (Then the big winners will be able to fund research about inequality.)
The piece presents the fear that China will have excessive control over our economy if we don’t take steps to counter their moves in high tech areas.
“If Broadcom had absorbed Qualcomm, it was expected to sharply reduce the U.S. company’s research and development spending, leaving Huawei as the acknowledged global 5G leader, analysts said. That raised the prospect of American homes and businesses one day being outfitted with millions of sensors running on Chinese electronics, potentially allowing Chinese hackers to seize control of critical elements of the U.S. economy or military.”
In fact, this concern can be easily countered by requirements of openness in technology as a condition of selling in the United States. This non-protectionist measure would both radically reduce prices and help to deal with some of the technological problems of our own companies, such as Facebook violating its users’ privacy rights.
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