A Missouri Western State University economics professor applauds the Trump Administration for taking a strong stand against China on trade, but doubts its tactic will work. Professor Reza Hamzaee says the United States has needed to get serious with China for some time, because China doesn’t play fair with its trading partners.
“They have had tariffs on American products, which are already expensive when it is converted to Yuan, their currency,” Hamzaee tells St. Joseph affiliate KFEQ during an interview in his office. “So, it’s very hard to sell American products in the first place and then putting high tariffs is not a fair game.”
Hamzaee lays out a case against Chinese trade practices.
He says China manipulates its currency, making its products cheaper when sold abroad, undercutting domestic competition. It might give a little when a country complains, but China continues to play with the value of the Yuan in violation of international trade norms.
Intellectual property has long been a sticking point between the two countries. The United States accuses China of stealing its intellectual property and using it to manufacture cheap electronics, such as computers, which it sells in America.
U.S. officials further complain China keeps such tight controls on what can be imported into the country, it makes it difficult for American businesses to sell products to Chinese consumers.
While Hamzaee says the complaints are for the most part legitimate, he doesn’t believe President Trump’s threatened tariffs will prove effective. He says increasing tariffs on Chinese imports will do little to change Chinese trade policies, but will increase prices for American consumers, businesses, and farmers.
“He is taking a wrong approach, a wrong style of tackling a right issue,” according to Hamzaee.
Much is at stake.
The United States imported $539 billion from China last year. China purchases from the United States as well, but mostly confines those purchases to agricultural goods, such as soybeans. China imported $9 billion in soybeans from China last year. In fact, Hamzaee says agricultural goods are the United States’ only net surplus in trade with China. China does import some American transportation equipment, computers, and electronics.
Hamzaee believes something has to give.
“I think it will be resolved, partially resolved, during the next few months, in my opinion, not necessarily to an ideal situation.”
Hamzaee says the Trump Administration would be better off by returning to negotiations with China, and might well benefit from having other countries participate.
By Brent Martin of Missourinet affiliate KFEQ in St. Joseph