| Disclaimer: I'm not a fan of either party, so my view is hopefully a bit objective. Trump ran on the economic policy ideas popularized by "liberal" economist Paul Krugman. I posted a comment on HN a while back with links to Krugman's various columns, with a header above each group that included the rhetoric used by Trump to tout those policies. Krugman has been calling for trade policy changes against China for quite some time, and in spite of running as a Republican, Trump adopted Krugman's economic populism whole hog. So the ideas have been around for a long time, but have heretofore only been taken seriously by a populist fringe of economists. Such economists are viewed by the mainstream economics profession the way the general public views anti-vaxers. There just isn't science supporting the views, but they are compelling to a niche group of zealots. Economic populist rhetoric certainly sounds good to laypeople and hits on many emotionally potent hot buttons that mirror the jingoism that Trump uses across all of his rhetoric. Just as vaccines (a small bit of the virus being injected into a healthy person) are highly counter-intuitive to laypeople, trade policy is similarly counter-intuitive. The idea that the US could be made worse off by retaliating against China's one sided tariffs seems unheard of and bizarre to those who do not understand the science. To be blunt, there is zero economic or welfare justification for Trump's trade policy toward China. It is a tax on Americans and is making Americans poorer. No economist would disagree with that. To your point, there may be some broader strategic sense to Trump's stance toward China, namely viewing China more as an adversary than as a third world country to whom we can outsource our polluting industries and whose government tolerates toxic pollution and (by our standards) backward labor practices. But the important question to arrive at is why China is suddenly (reasonably?) viewed as an adversary to the US. Sure, China has stolen some IP, but what developing nation (including the US) hasn't? Sure, China has one sided tariffs to protect some of its firms from competition, but so have many countries in the midst of rapid growth. The answer is that the US has dramatically slowed its innovation and growth due to the massive investment in foreign wars and occupations. The amount invested in these wars is in the many trillions of dollars, and there has been significantly negative ROI. The result of this happening for 20 years is that "poof", China is now a competitor to the world superpower. But contrary to Trump's rhetoric, this is not due to China cheating, or Americans being out negotiated, it's due to a much simpler problem, Americans allowing our leaders to flush such vast sums of money on wars that had negative ROI. Consider how much better funded the lobbying arms of defense contractor firms are now than they were 20 years ago. Consider how our major tech firms (Google, Amazon, Facebook) are now defense contractors. Consider that neocon hawk Condi Rice was the first choice for the board at Dropbox. The defense sector is eating the US alive, eating our future. Be that as it may, China has managed to avoid making similar malinvestments, and is now (in relative terms) leapfrogging. It is possible that Trump is the only one who is woke to the true threat posed by China, but keep in mind that the US is losing the trade war as China begins settling Africa and manufacturing moves from China to Africa, India, etc. Rust belt jobs are never coming back to the US. Under Trump most farmers are now welfare recipients and the US economy is on the verge of major collapse. One day soon we will view the world in which China and the US were major peaceful trading partners as a golden age of international cooperation. Your comment uses the word finally which accurately describes Trump's policies as majorly outdated. Maybe if the US had been a bit more tough on trade 20 years ago a better agreement would have been reached. But maybe not. We can be sure that in today's world the US is destined to lose the trade war and also lose much more in the process. |
I also agree that part of China's rise is due to it's economic strengths and strategic investments. In addition to that, they 1.5 billion people, of which there's bound to be a lot of amazing innovators.
The documentary American Factory is a great documentary that shows how the efficiency in China is also helping them out compete the US. (sidenote: produced by the obamas company)
On the note of the defense sector, DARPA has funded so much research (they invented the internet) that has helped innovation and defense companies help provide jobs for many engineers and high tech peoples, which helps the growth in that sector. Defense spending is also how we maintain our safety. But I do agree, that a lot of it is immensely wasteful. I think defense spending is important and useful, but like what you're getting at- the amount we spend stupidly instead of investing or strategically is too extreme