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Donald Trump's protectionist economic policies led to the introduction of tariffs on $250 billion of imports from China. President Xi Jinping responded with tariffs of his own, affecting some $110 billion worth of US-made products. As the two global economic behemoths enter a trade war, what are the implications for both economies and the rest of the world?

Positions

Arguments supporting this position

Details

Context

President Trump claims that the trade war is a legitimate response to years of unfair Chinese economic practices. If one country doesn't play by the rules, then the rules shouldn't protect them.

The Argument

The core of this argument is the claim that China engages in unfair economic practices. What constitutes fairness, and which specific Chinese policies fall into the 'unfair' category, are questions which remain open to debate; commentators generally point to three kinds of behaviour (this discussion is reproduced in other arguments in this issue): 1. Actions which are generally considered illegal; these include the outright theft of intellectual property, as with Chinese military officers hacking into American firms in 2014 [1]. 2. Actions which are considered unfair, if not strictly illegal, such as demanding that foreign firms gift technology in exchange for market access, or artificially devaluing its currency [1]. 3. Actions which represent intense forms of (perfectly legal) competition, as with the raw manufacturing capacity of the Chinese economy. Suppose we grant the premise of unfair competition. The next step in this argument is to establish that a trade war is a legitimate response to unfair competition. One way of cashing out on this is to claim that the trade war is legitimate insofar as it achieves America's goals - i.e. of forcing China to negotiate an end to the trade war by agreeing to stop its unfair practices. This argument would require the additional premise that the trade war will succeed in achieving America's goals; the success of the trade war is evaluated elsewhere in this issue. Alternatively, we might think that the trade war is legitimate irrespective of its outcome (by analogy: one might think that self-defence is a legitimate response to an attack, even if the odds of success are slim). One might think that, if an international actor chooses not to play by the rules, then there is no reason to treat it in accordance with said rules. It's unclear which interpretation tacks closer to the language the Trump Administration employs; President Trump has certainly boasted about the likelihood of winning the war ("we win big. It's easy!") [2]. [1] The Economist, “How China is battling ever more intensely in world markets”, 23 September 2017 [2] BBC, "Trade wars, Trump tariffs and protectionism explained", 26 July 2018

Counter arguments

There are several possible objections to the claim that unfair competition legitimises retaliation. One objection is to dispute the premise that China's economic practices are sufficiently unfair as to warrant retaliation. For example, China has taken steps to reduce intellectual property thefts, as with the 2014 hacks cited in the main argument. More broadly, the mere fact that China employs economic strategies that are beneficial to itself does not imply that those practices are unfair. A second objection is to dispute the premise that the trade war was the right form of retaliation. There may have been alternative avenues for the US to pursue, such as arbitration by international bodies like the World Trade Organisation. A third objection is to claim that US self-interest is not the only relevant interest at play. If the trade war causes harm to other economies beyond China's (an argument discussed elsewhere in this issue), some might think that renders the action illegitimate.

Premises

1. China engages in unfair economic practices 2. If China engages in unfair economic practices, then retaliation via a trade war is legitimate

Rejecting the premises

Rejecting [1]: China's practices may not generally cross the threshold of 'unfairness'. Rejecting [2]: even if China engages in unfair practices, there are other considerations that render the trade war illegitimate.

References

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This page was last edited on Tuesday, 21 Aug 2018 at 21:57 UTC