Rep. Warren Davidson: Is COVID Stimulus a Double-Edged Sword?

October 30, 2020 Updated: November 2, 2020

Even before coronavirus hit, the United States was 23 trillion dollars in debt. And in recent months America has devoted $4 trillion to grants, loans and tax breaks for coronavirus relief. Now there is discussion about another $1.8 trillion stimulus.

What is the economic and social impact of such unprecedented spending?

In this episode, we sit down with Ohio Congressman Warren Davidson, who serves on the House Financial Services Committee. He’s also the founder of the Sound Money Caucus.

This is American Thought Leaders 🇺🇸, and I’m Jan Jekielek.

Jan Jekielek: Congressman Warren Davidson, such a pleasure to have you on American Thought Leaders.

Rep. Warren Davidson: Yes, thanks so much for having me, Jan. Nice to talk with you.

Mr. Jekielek: Congressman Davidson, you’re a member and I think a founder of the Sound Money Caucus. And I’m going to ask you a little bit about what that exactly is and how it works. But for starters, there’s been negotiations recently over quite some time over a giant stimulus bill. I think the White House has said that it will approve $1.9 trillion. I mean, I almost find it difficult to say it. It’s really a lot of money. And what are your thoughts on these negotiations and what the American people need at this time?

Rep. Davidson: Yes, thanks for highlighting that. And, yes, it is hard to think of the number $1.8 trillion. For perspective, that number is about one month of the United States’ GDP. So if you look at our US economy, we generate about 1.8 trillion of GDP per month. And the President had his debate, the final debate, with Vice President Joe Biden last night. His point was, you can’t sustain the impact of this on our economy. You can’t really sustain it very well on our civic and social life, either.

There’s big pieces there. But the piece that didn’t get enunciated well enough, in my opinion, was you can’t sustain it from a monetary policy standard either because when we put $4 trillion of spending, roughly a year-to-date for this virus, it’s not money that we borrowed—I mean, it still counts as debt—but this is printed money.

There’s not really a lender for the money. Borrowing has a borrower and a lender. This is money that’s being printed, and it inherently dilutes the value of all the other money. And so it has very big economic distortion. And this kind of behavior enabled by fiscal policy in results in our monetary policy, is monetary inflation. It shows up differently than consumer price index inflation. But it accounts for a significant gap, a significant portion of the wealth gap.

So, you can’t sustain it. The president highlighted that. But when you ask, “Well, what does our economy need right now?” It needs to reopen. That’s the big thing. It needs to reopen, and people need to move forward. Even if the mandates are lifted, there’s still a change in consumer behavior that is very fearful.

And I don’t think our economy is going to be vibrant until people have some sort of shared consensus about the facts related to the public health risks. And that, unfortunately, seems about as far off as the vaccine work that’s ongoing.

So in the meantime, there’s a desire by Congress and really a need to create some economic stability for people who are being massively disrupted. And we can’t really agree on the right approach to that.

And so the question is, can we provide a path that enables a reopening of the economy? Or are we going to provide a path that assumes that you can continue to print a month of GDP at a time, basically? And that clearly isn’t sustainable. So having an end-state that we agree on would be a major and an important first step.

Mr. Jekielek: So presumably, you’re looking at the impacts of this, as you describe it, printing of money. I watched a little video, and you were announcing the Sound Money Caucus of this sort of acceleration of the amount of money in circulation, especially in recent years and especially in recent months. It makes me think of 2008. It makes me think of stimulus at that time. What are the costs of this happening?

Rep. Davidson: Yes, so the consequences of it are pretty large disconnection between people who have a significant part of their net worth in marketable securities and people whose only recourse to wealth is labor. You’ve seen really as the monetary supply is increased, liquidity on Wall Street has increased massively.

You can buy 10 year treasuries and hold them for a day, right? So that’s part of how having an artificially low rate is still nominally positive, like 0.6, 0.7 percent right now, but no one believes that’s a real rate in that it’s adjusted for inflation. No one believes consumer inflation over the next 10 years is going to be less than 2 percent. So having a nominal value of that below 2 percent isn’t truly rational.

So where’s the return showing up? It’s showing up in the structured credit market where people with access to that market, large hedge funds mostly, can trade intraday. And they get yield that isn’t available to retail investors, that isn’t available to retirees and savers. And so it locks main-street, everyday Americans out of that access, unless they happen to have their net worth tied up into marketable securities in large funds.

Mr. Jekielek: Okay. What is the bottom line?

Rep. Davidson: Yes, the bottom line is that the Federal Reserve, enabled by Congress, are printing money, and it undermines the value of your money. If you think about money, money is a store of value and a means of exchange. And it’s still working as a means of exchange right now. But the store of value isn’t working well for you.

If you’ve got your wealth in cash, that cash is being destroyed by printed money. And so when you hear calls to say, “Well, let’s print more money,” it’s effectively working to destroy your wealth. And it’s a hidden tax. People don’t realize that you’re paying for it in the destruction of your own money.

Of course, the only way to accommodate it is to have an official tax that passes or to cut spending, and there doesn’t seem to be much of an appetite for either. So that’s the motivation for the Sound Money Caucus, to say, “You can’t inflate your way out of this.”

And there’s an embrace of this by people who say that they reject modern monetary theory—the idea that since you have printing presses, you can keep printing more money. They say they reject it, but the effect of what is being done is essentially a sample pack of modern monetary theory.

Mr. Jekielek: Understand. Okay. And today, we still have a lot of people that are out of work and a lot of people that are suffering and so forth. Presumably, of course, this is what this $1.8 trillion package is for. So what is the sound policy going forward? President Trump is saying he wants to reopen the economy, you’ve mentioned that. But practically, okay, let’s say the economy does come back as it was before. Yet we still have these large debts, as you’re describing, to pay. What should be done?

Rep. Davidson: Yes. So, you have to work towards sound money. And inherently that means that we’re going to have to find a monetary system that addresses the current deficits. And, look, the last time the planet had this much debt was after World War II. I mean, it’s not just the United States. The economies all over the world have record high debt to GDP ratios.

And after World War II, the world, large economies of the world met together in Bretton Woods, and they worked out the Bretton Woods Agreement, which put this international trade system on a balance of payments anchored to gold, alright, so you had a gold standard. And that lasted until 1971, and effectively the US dollar became the reserve currency. But it was no longer tied to gold. It was pure fiat in that it’s only backed by the promise of a government.

It’s worked. But since that period of time, you’ve seen the money supply grow up—and that’s inherent whenever you have a reserve currency, so it’s not inherently problematic—but it’s the rate of growth in the supply of money that’s undermining its utility as a store of value. And one of the real challenges you saw around the world was foreign countries, when they were scared of the pandemic—just like US investors—didn’t want to hold even the most marketable securities.

There was no buy-side for municipal bonds in the US, even, for a period of time. They fled to the dollar—it’s the reserve currency—and for that reason, countries like Russia and Saudi Arabia wanted to keep pumping oil, even to the point where the price of oil voluntarily went negative, right, because that’s was the demand for dollars.

The demand for dollars was insatiable. So I think we have to create a system that the demand for the means of exchange doesn’t inherently undermine its utility as a store of value.

And that is going to take a consensus to be done, and it’s going to take essentially a form of Chapter 11 bankruptcy, where you’re restructuring. It’s not like Blockbuster where, Chapter 7, they’re gone. It’s akin to a corporate restructuring, or in some ways, similar to what Russia did after the Soviet Union fell apart. They had to restructure their monetary system.

Mr. Jekielek: So is this something that’s internal to the US, or is this another Bretton Woods type agreement?

Rep. Davidson: You know, that’s a real question for which way do we go forward as a country, and there are consequences for both. The United States benefits greatly from being the world’s reserve currency, and frankly, the world benefits from the United States being the reserve currency. It’s a huge part of how we’ve established the global trade regime, but also the national security regime.

If you think about who wants to avoid using the US dollar, who wants most aggressively to undermine the dollar as the world’s reserve currency, it’s regimes like North Korea and Iran and places like Russia and China because we use these sanctions to influence policy. But we also follow the money.

We have a system where interbank transfers move through US banked, and we can see where the money goes. And we do that to stop terrorism, illicit finance. We also do it to influence all sorts of policies.

We should be doing it more aggressively with the cartels that are disrupting large parts of day to day life inside the United States of America with drugs, drug trafficking, human trafficking, sex trafficking, all the stuff that goes on under the border. It’s tracked as these individual activities, but overwhelmingly, it’s the cartels that are doing it. And if we use that intelligence network, we could do for this trafficking regime what we’ve done for a lot of things in the world.

So the reserve currency status, and the way the United States has used it, has created a lot of peace and prosperity around the world, and I think we should seek to preserve it. But it’s going to be a challenge.

You see Christine Lagarde from the European Central Bank, she’s worked on a project really since she was at the World Bank in the last recession to create a synthetic currency, which creates that as an international system. And it would be a basket of currencies instead of one product. So there are people that are working on rivals to the US dollar, whether it’s their own currency or some synthetic way to bridge.

Either way, it dilutes the influence of the United States, and what the consequence of that will be is we won’t be able to have super low rates. We won’t be able to just print money. If we want to sell treasuries, we’re going to have to price them at a rate that has buyers. And so that really has huge implications for how we can fund our government and the way of life that so many Americans have gotten accustomed to.

Mr. Jekielek: Well, just this synthetic currency—which I’ve heard a little bit about—idea, what is the likelihood of that? For example, China at one point was positioning to try to get the renminbi to become the reserve currency, that extremely far-fetched idea by most analyses that I’ve come across. What about this synthetic currency?

Rep. Davidson: Yes, a number of countries would favor that, and some of your biggest global companies would favor it as well. So it could get momentum. And why do people want that? Well, if you think about the size of the foreign exchange market, it’s a massive market, and [it’s] one of the number one hedges that global corporations are putting capital into because of the currency risk.

If you’re Coca-Cola based in the United States of America, you sell Coca-Cola all over the planet. You ultimately have to settle in where you issue your financial statements, where your headquarters are in US dollars. You can’t have wild fluctuations that turn an otherwise profitable market unprofitable. And so the hedging is an important strategy.

It shows up in all the commodities, frankly, because the net effect of being the global reserve currency, [is that] how commodities are priced is US dollars. So whether it’s oil, corn, soybeans, cattle, you name it, the commodities around the world settle overwhelmingly in US dollars. And so much so that the US dollar has been commonly referred to as the petrodollar.

It has big implications for that sort of stability as well. And as the US has become a net exporter of oil, there’s been a lot of pressure on Saudi Arabia to sell their oil to China priced in RMB. That would be a consequential event for those kinds of things to start happening. So it might be more likely if you build a coalition, and that’s basically what Christine Lagarde has been working on.

Mr. Jekielek: Very, very interesting. So why don’t I ask about this? There’s been a number of bills proposed, or there have been a number of proposals around holding China or the Chinese Communist Party accountable for coronavirus or CCP virus, as we call it at The Epoch Times. And of course, a lot of those involve some sort of large financial settlement for causing the virus. What are your thoughts about these?

Rep. Davidson: Yes, I mean, you get the sense of it because, look, there are a lot of things that could have been done differently if China had been honest, and so one of those has been, say, “Hey, we’re just going to take a haircut on any debt we owe to China.” And I think that’s where you really need to be diplomatic about how we work together.

I think that finding a way to work with China, to get them to do what they’ve already promised to do as part of the World Trade Organization probably has the most payoff, not just for the United States, but for the world. And if there’s one thing that I think we could do better in our trade negotiations, is to multiply our allies instead of our enemies.

Instead of being in a trade war with everyone all at once, we really, especially in the wake of CCP virus, [need to] unite a coalition to deal with China. We’ve seen the risk to the supply chain, especially acute in this medical supply chain where when France needed personal protective equipment, they said, “Sure, we could give you some if you agree to use 5G Huawei for your 5G implementation.”

You’re like, “Who does that?” You know, well, China does. That’s the kind of behavior they’re engaged in. They don’t just do it to the United States. They do it to countries around the world. And they promised not to do that as part of creating the World Trade Organization.

Mr. Jekielek: Recently, a few weeks back, Congress or the House passed the Uyghur Forced Labor Disclosure Act. And you actually issued a statement—you voted against it. A lot of Republicans voted against it. A number of Republicans that work very specifically on China issues voted for it. And you issued a statement about why. Why don’t you tell me about that? I was surprised.

Rep. Davidson: Look, I think the global community should unite to go after China in a concerted way on trade practices, but ahead of that should be in their human rights abuses, right. I mean, I don’t see how you could have a country that is shamelessly involved in human rights abuses being a leading voice in the Human Rights Commission on the United Nations, right, but China’s doing that.

And they’re also putting Uyghurs into forced labor and reeducation camps. They’re literally not just taking their property, they’re taking their families. And unfortunately, they’re also taking lives. So I think it is a high priority to include this in every negotiation with China, and we should do it in a concerted way globally to end practices like this by countries who say that they want to be leading figures in international relations.

They want to have great relationships all over the planet. They want to engage in trade. They say they want to be a market economy. All these promises, but they’re unfulfilled and they’re completely at odds with the way they’re treating Uyghurs.

But the problem with the House bill is that a lot of times, some of my Democratic colleagues will seize on it, an otherwise great issue like this one, to accomplish a different objective. So the headline says it’s a bill about Uyghurs, but the reality for America’s economy, it’s a way to expand the scope and shift the focus of the Securities and Exchange Commission so that instead of really dealing with securities regulation in the United States and holding companies accountable for that, they turn into a police force to say what kinds of activities are the companies that are publicly listed involved in.

That’s problematic for a host of reasons, but not least of which is most companies aren’t publicly traded. And so if you want to have a system that’s effective, you would actually use the Department of Justice and the Department of State, the US Treasury, the things that we use already when we do a sanctions regime are what you would use to deal with China’s conduct against Uyghurs, not the Securities and Exchange Commission.

We couldn’t even have a debate or amendments offered or anything about that. It was just yes or no on the bill. And for that reason, I and others voted no.

Mr. Jekielek: So what is the exact problem with having the SEC function that way? Or maybe a different way of putting it—because you’ve already answered that to some extent—is why would someone be interested in using the SEC that way?

Rep. Davidson: Well, it’s not a well-used term of art, but “woke capitalism” is the idea that the approved social goals of society are the only things that can be done in society. It’s essentially a new heresy code, right. And Democrats are forcing that with cancel culture all around.

You think, “Well, shouldn’t we be using cancel culture on places that condemn what China’s doing to Uyghurs?” And of course, the answer is, “Yeah, we should never support what China’s doing to Uyghurs.” But we shouldn’t change our system of government so that you diminish the effectiveness of the Securities and Exchange Commission as a place that looks even-handedly at companies who are publicly listed and deals with disclosure requirements in that way.

They’re expanding the disclosure requirements, but they’re only doing it for publicly traded companies. This goes back to the same sort of things that were in another partisan debate on conflict minerals, for example. It drove a huge cost to being publicly listed in the United States. And companies just delisted or rolled up into private equity groups rather than deal with the compliance costs.

It goes into a black hole, and nothing actually gets done effectively for those companies. Whereas if we use sanctions as a reform, like if we reformed the sanctions policies in the United States, you could use that in a more broad way. And we already have customs enforcement, we have FinCEN [Financial Crimes Enforcement Network] that looks through Treasury to look at all these things.

So if you pass and use the existing framework for financial regulation, you can do it. And you wonder, “Why would they say we’re going to compel the Securities and Exchange Commission to do that?” And the reason is, they want the Securities and Exchange Commission to expand the scope of it to basically say, “These companies can be listed, but those companies can’t.”

And that goes into ESG goals that they want to force disclosure on and any number of other objectives to say, “Well, if you engage in these things, then you can have access to capital. And if you don’t do those things, well, then you can’t have access to capital.” I think there’s a problem with using the SEC that way.

It’s the same sort of thing. You go back to sound money. Sound money is fungible between third parties, right. So you and I could trade a $20 bill, and there’s no intermediary saying, “Well, no, you guys can’t agree to trade a $20 bill for whatever service.” They want a central government authority to sit in between the transaction and say, “Hmm, you guys can trade the $20 bill, but these people can’t.”

That’s effectively what the ideology on the left is saying is that, “You’re not going to bank those people, are you?” or “You’re not going to do work with those people, are you?” and I just don’t think the government needs to get involved in every little piece of transaction. You need to let governments work at the government level and let individuals and companies engage in things that are lawful between one another.

Because, look, if you go inside China, for example, the Chinese people aren’t locking up Uyghurs. The Chinese people treat their neighbors with love and respect, just like the American people generally treat their neighbors with love and respect. It’s the Chinese Communist Party that’s doing this. And so we should be holding the Chinese Communist Party accountable, not a small business in China that’s just trying to get an opportunity to access the world’s biggest market in the United States of America.

And the same, you have an American business that’s like, “Hey, I just need a supplier. I’ve looked everywhere. I can’t get what I need in the United States. I’m going to use this supply chain that goes into China. Well now instead of finding a good supplier, I’m supposed to do a background search on some small business in a certain part of China? Who, how do I do that?”

And then you say, “Well, nevermind. We’ll have to find a supplier somewhere else, right, because I am not even going to run the risk of doing that.” So it effectively closes the entire market. And it hurts average, ordinary American citizens, and it hurts average, ordinary Chinese citizens, instead of targeting it where it should be: on the Chinese Communist Party and their conduct.

When we use sanctions, that’s what happens. You go after the country, you go after the party officials, you go after the leaders, you go after the people that are operating these facilities, and you freeze their assets. It’s a much more powerful tool because it’s more focused, and it causes less collateral damage on the everyday people in America or China or other places where you might do similar things.

Mr. Jekielek: And presumably, you could sanction the companies that are involved, which, in fact, there are sanctions in place against a number of companies that operate in Xinjiang.

Rep. Davidson: Absolutely. And so when you put them on that, the Treasury has an Office of Foreign Assets Control. That feeds down through the rest of our government in a whole of government approach. It uses the government to do these things versus saying, “Oh, if you have a publicly traded company, now you’re supposed to somehow develop all this expertise that sits at the Office of Foreign Assets Control, Customs and Border Patrol, and other agencies that track how we do sanctions.

And the net effect is problematic for our domestic economy and problematic for our regulatory environment. So if there’s some deficiency in the way that our sanctions regime is working, well, I favor an update to that law. That goes back to 1975. And I think it would be a better way to deal with enforcement than trying to distort the mission of the Securities and Exchange Commission.

Mr. Jekielek: Okay, so one more question about this. Are you saying that if this law gets passed, the Uyghur Forced Labor Disclosure Act, and goes into law, of course, are you saying that the rules for the SEC basically could be applied locally in America around whatever—I’ll say it in quotes—”woke” issue that’s decided upon at a given time? Is that the concern?

Rep. Davidson: Yes, it lays down the groundwork to say, “Oh, well, we’re going to push the same thing to say, we’re going to end fossil fuels.” So this person’s funding fossil fuels or pipelines. Congresswoman Ocasio-Cortez basically wants to ban banks from financing pipeline projects, for example. This came out in one of our hearings.

So if you’re a publicly traded company and you do business with someone that would say, “Make parts for a pipeline,” you could start applying that regulatory policy and essentially, now you’ve got the Securities and Exchange Commission policing who makes parts that go into a pipeline.

And when you go downstream, there are companies like, say, a machine shop in Ohio, that are machining a part for somebody. They just get a blueprint that says, “Make this part.” You send it to somebody, you’re not engaged in some nefarious activity, you’re just making a part for somebody that said, “Here’s a print. Can you make this?” “Yes, for this much money,” and you supply it. That gets rolled up into these kinds of activities.

And there’s just not a well thought out—or maybe there is—idea behind the implications of using the Securities and Exchange Commission to do something that we already have agencies that specialize in. So I think that it’s very, very disruptive for publicly traded companies. But it has spill on effect for the rest of the economy that ultimately involves people that really aren’t directly related to the issue at hand.

If you look at Uyghur forced labor, for example, here’s an example. If you look at that region in China, they grow a lot of tomatoes, right? That part of China sells a lot of tomato paste—there’s a good documentary on it called “[The Empire of] Red Gold” right. So if you happen to be eating something that has tomato paste in it, now, what, you’re in violation of this law?

If you’re like a local pizza place and you get your tomato paste from, I don’t know, pick your [brand], Acme tomato paste. And it shows up from an American company that supplied it. I mean, you don’t know necessarily where they got the tomatoes, tomato paste, all this stuff. That’s the kind of effect.

Now some people want that effect, I suppose, that says, “We’re going to kill the entire market for tomato paste.” And look, I’m fine if all the tomato paste is made in the United States of America. Personally, I don’t see a need to import it. But to enforce it, you’ve got a mechanism that puts the Securities and Exchange Commission as the body that’s enforcing this. That’s the problem with it.

If you want to have a similar effect, that’s what sanctions do. A sanctioned company, you don’t want to be buying from a company that’s sanctioned, so it’s easy to know who are all the importers and exporters of the same product—tomato paste.

If you wanted to shut down the tomato paste operation, you could use the sanctions regime that is already in place and target those companies because you know the way they’re expanding the tomato growing operation and the conversion of that from tomatoes on the vine to tomato paste, ready for shipment around the world, is related to what they’re doing to Uyghurs in that region of China, then you could just put the sanctions regime in, and it’s all handled at the border, essentially, from their government and the agents that deal with it in our government and the agents that deal with it.

You’re not dealing with the entire supply chain inside the United States in the same way. So it’s a more effective system, and it imposes fewer direct costs on the US economy in a compliance sort of way because you can do the closure of that market very effectively versus passively and indirectly by putting this regulatory burden on all the companies in the United States of America.

And it turns into that indirectly because you regulate the publicly traded companies, and let’s say Heinz ketchup and Darden restaurants are the only two that are there. Well, everyone that supplies them now would have to fill out forms that say, “Here’s how we supply the tomato paste.” And so for Cisco foods to say, “Everything we ship into a restaurant,” there would have to be a downstream thing for all their suppliers to say, “Where’s your tomato paste come from? And where’s this [from]?”

If you don’t want to import tomato paste from there, just ban the imported tomato paste from coming in from there and do it very directly versus this passive system that puts huge regulatory burdens on all the companies in America. It’s just not an efficient way to do it.

Mr. Jekielek: So you’re saying that you’re in favor of relinking trade and human rights internationally for the US. Is that right?

Rep. Davidson: Yes, I think it has to be part of the dialogue and saying, “Look, if you want to stay a member in good standing in the World Trade Organization, you have to be able to say, “We do certain things.” Now, does it say, “Hey, is there a way to evict somebody from the World Trade Organization because of that?” Well, that’s a matter for the World Trade Organization to take up.

But look, the biggest, most fundamental opportunity in this space is to say to China, “Look, as a condition of being part of the World Trade Organization, you said that you would become a market economy.” No country in the world recognizes China as a market economy. So that’s a broken promise. They’re out of compliance with the World Trade Organization.

On balance, the member countries don’t want to dissolve the World Trade Organization. So collectively, we should try to agree to reform it. Otherwise, it’s really very ineffective because they’re not holding people accountable to do the things that they said they would do.

Every country that deals with China would recognize the abuses that they do in trade: they steal intellectual property, they block or shape market access, they dump and subsidize competition. And the World Trade Organization has been too weak to actually deal with those trade practices.

So the idea that the World Trade Organization would somehow be an effective way to deal with other overt violations, like what China is doing to Uyghurs is not really plausible at this point. But to say that it is part of the negotiation to say, “Look,” not necessarily in a direct way, but in a way that we deal with China, since we do need to deal with trade and the broken World Trade Organization, you say, “and we also need to see progress with how you’re treating Uyghurs. This is unjust.”

And unfortunately, they’re not the only country in the world that has engaged in unjust behavior. And that’s really ultimately a question for the United Nations and the Human Rights Council. Over the years, it’s almost to the point where it’s a satire site as to who has led the Human Rights Council at the United Nations. So it’s another broken global institution.

Some of that is essentially what Donald Trump ran against: you’ve created all these global, interdependent institutions, and they’re not doing what they promised to do. And the President’s called them out over and over again, and he said, “Look, I’m not going to go too far out of my way to fix the global piece. I’m going to at least fix the way that you’re dealing with the United States of America.”

And with respect to the North Atlantic Treaty Organization, NATO, he’s made NATO stronger, ultimately, by getting NATO to fund their own defense more effectively. And so, he was willing to disrupt the status quo and has made progress. And I think we should do that in a very united way with reforms to the World Trade Organization.

Mr. Jekielek: Bottom line, today in China, all sorts of persecuted groups—Uyghurs, of course, Falun Gong, house Christians. Senator [Josh] Hawley just recently, I think today put out a resolution about Tibetan forced labor. It goes on and on. How to deal with that, in your mind? Bottom line.

Rep. Davidson: Yes, I think it has to be a key thing for the United States of America to say, “What kind of trading relationship do we want to have with countries that do this?” And it needs to be linked to all of our diplomatic efforts and a whole of nation effort for the United States of America.

My encouragement would be that we do that as part of an update to the World Trade Organization, because right now, it seems incredibly timely that we reform the World Trade Organization, especially in the wake of the, as you’ve characterized it, the CCP virus.

How do you get China to be held accountable for their actions there? It goes to the same things that they’ve done with trade. And they haven’t been held accountable for all sorts of broken promises. My hope is that rather than just the United States applying leverage on China, that we could use trade as a way to unite all the member countries of the World Trade Organization.

I think we would speak largely with one voice because China has abused that system in the same way for all the countries. No country says they’re a market economy. Every country says they steal intellectual property. They subsidize, dump, and block market access or shape it, all for the benefit of China and all for the disadvantage individually of the member countries to the World Trade Organization. But collectively, it weakens the World Trade Organization. So if we’re going to have it and the United States is going to participate, it has to be more effective.

Mr. Jekielek: Any final thoughts before we finish up?

Rep. Davidson: No, I appreciate you taking time, and it’s just great to be able to have longer dialogue on some of these issues, and hopefully it adds value for some folks.

Mr. Jekielek: Such a pleasure to have you on.

This interview has been edited for clarity and brevity.

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