A Progressive Resolution to the Trade War

As more and more Q3 and Q4 economic data becomes public, there is an increasing likelihood that the United States will enter the bargaining room to conclude the US/China trade war with a dominant position and the capacity to extract real policy concessions. When US negotiators enter that negotiating room, progressives need be able to articulate a clear set of policy goals and demands. We must start demanding that any result privilege American unions and their workers—instead of just American corporations—and we need to attack the ability for Chinese businesses to exploit low labor costs by demanding better Chinese domestic working conditions and worker representation. But even if the United States is on the back foot come negotiation day, or there is no clear side bargaining from a position of strength, American negotiators will need to enter with a clear vision of what our policy aims are, and progressives must have a voice in forming that vision.

If left to the technocrats, we can expect that American negotiators will have three distinct goals: first, to rein in Chinese state distortion of global markets, particularly commodity markets. Second, to enforce global intellectual property standards. And third, to control Chinese intervention and investment in developing nations.

These issues have been the crux of tensions between American and Chinese diplomats for nearly two decades. PhD dissertations, books, and megabytes of foreign policy papers have been written about the history and impact of these contentions, so we’ll avoid addressing that here. What’s meaningful to us in the here and now is that these policy grievances are mostly felt by large multinational businesses and their shareholders. Alcoa has been hurt by China’s ability to subsidize their national aluminum industry, technology companies routinely have their proprietary designs magically appear in Chinese products, and American civil contracting and infrastructure firms are consistently outbid by government-subsidized Chinese firms for development operations.

Throwing a wrench into the technocratic expectations, however, are the campaign promises and populist politics of President Trump. His continued insistence that his goal is to return off-shored manufacturing jobs to America adds some flavor to what would otherwise be a technical, technocratic, and neoliberal negotiation. Conservative commentators—and many liberals, if we’re honest—will insist that the technocratic policy aims will benefit American workers by virtue of benefiting the American businesses that employ them. But progressives, alone in the US political landscape, consistently understand that corporations have no incentive to hire workers or pay them better wages except as a matter of last resort. If American corporations are suddenly more competitive against Chinese firms and state-owned enterprises and hit windfall profits, the first instinct of those corporations will be to use the sudden cash injection to invest in either automation or market sleight-of-hand whose purpose will be to drive up short term share price.

Progressives, then, have an opportunity to seize the momentum started by President Trump’s rhetorical focus on American workers and provide a policy solution that will actually work for our working class: we should demand that Chinese purchases of American goods and services give preferential treatment to unionized firms and we should penalize goods sold by union-busters. We must demand that American-bought Chinese goods be made in factories with strong worker safety and representation standards, so that American firms can’t circumvent the overhead of US labor laws by off-shoring to China, making American workers more competitive. If we normalize intellectual property enforcement, we must do so in a way that protects the enforcement rights of American freelancers and independent content creators—earlier attempts to rectify these relations have required vast bureaucracies that only multinational firms would have had the capacity to navigate. And if we’re hell-bent on attempting to control China’s influence in developing nations, we must do so by demanding that China’s development efforts in those countries be governed by policy that protects the rights of those foreign nations’ rights to self-determination and the economic capacity of its workers to avoid exploitation.

The American progressive movement cannot afford to be myopically focused on domestic policy or to have a foreign policy that is limited to a knee-jerk isolationism and criticism of American Imperialism. Yes, we absolutely must make those criticisms, but the world is fundamentally connected, and any responsible geopolitical citizen cannot afford to simply sit it out, but must work to use power and influence to build a stable and just world. The struggle of our working class is not located in America alone, but it is an international struggle, and our policy positions must communicate that, while demonstrating a clear capacity to govern at the international level.

William Byatt