The administration’s antipathy toward China sometimes seems driven by an irrational anger over trade deficits. Virtually all mainstream economists see the president’s theory that our trade relationship should be evaluated by the bilateral trade deficit as analytically wrong.
On the other hand, China has contravened some widely accepted trade and investment norms by, for example, subsidizing exports, restricting imports, protecting national champions, imposing buy-China mandates and, at times, requiring foreign companies to share their intellectual property with Chinese partners.
These structural policies present a complex problem. They’re embedded in China’s economic model, and the United States needs to recognize that it can’t simply demand that China change that model. And China needs to recognize that its system creates some unacceptable consequences in the trade arena.
From there, the two countries should be able to identify reasonable solutions. Washington’s approach should have been multilateral and quiet, joining with other countries, including our European allies, Brazil, Mexico and Japan to approach Beijing as a united bloc; hopefully it’s not too late to walk this path.
We’ve bridged our economic and political differences before. When I served as Treasury secretary in the 1990s, the United States and China worked together to stem the Asian financial crisis. And though the current administration has withdrawn from the Paris climate agreement, bilateral cooperation was integral to its creation in 2015.
We must look beyond the daily headlines about trade to the more consequential problem of ever-greater friction between the United States and China. For the future of humanity, not to mention our immediate economic interests, our two countries must recognize our mutual self-interest in a constructive relationship and act accordingly.
Robert E. Rubin, secretary of the Treasury from 1995 to 1999, is co-chairman emeritus of the Council on Foreign Relations.