WASHINGTON—China’s manipulative trade practices and economic model represent an “unprecedented threat” to the world’s market-based economy and U.S. interests, said U.S. Trade Representative Robert Lighthizer, in a speech on Sept. 18.
It was the first major public speech given by Lighthizer, a long-term critic of China’s trade practices against the United States. Lighthizer told a crowd of over a hundred at the Center for Strategic and International Studies that China represents the one challenge facing the administration that is “substantially more difficult than those faced in the past.”
“The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create ‘national champions,’ to force technology transfers, and to destroy markets in China and throughout the world, is a threat to the world trading system that is unprecedented,” said Lighthizer.
Lighthizer was referring to the hundreds, if not thousands, of Chinese state-owned enterprises (SOE) that are institutionally protected and promoted by the Chinese communist regime, hence known as the “national champions” of the Chinese economy.
Not only do Chinese SEOs receive extensive protection from the Chinese regime against foreign competition, they are also often the culprits of intellectual property theft from foreign companies. A large number of American companies has fallen victim to such abusive tactics by the regime, resulting in massive job losses for American workers, according to Lighthizer and many other critics of China’s trade practices.
“Unfortunately, the World Trade Organization is not equipped to deal with this problem,” Lighthizer said. “WTO and its predecessor, the General Agreement on Tariffs and Trade, were not designed to successfully manage mercantilism on this scale.”
“We must find other ways to defend our companies, workers, farmers, and indeed, our economic system. We must find ways to ensure our market-based economy prevails.”
Lighthizer did not reveal any specifics about the ongoing investigation into Chinese intellectual property theft, a process that was started by President Donald Trump on Aug. 14. He revealed, however, that the investigators receive “an awful lot of complaints” from executives of American companies that have been hurt by the abusive practices of the Chinese regime, with many complaining that they have been forced to give up their technology and corporate secrets to their Chinese competitors.
Lighthizer’s comment on Sept. 18 is the latest signal that the Trump administration remains steadfast on the campaign pledge of taking a hardline stance on trade policy with China, despite the departure on Aug. 19 of White House chief strategist Steve Bannon, who was widely thought to be the administration’s primary advocate of a hawkish stance against China.
Lighthizer is not the only “trade hawk” inside Trump’s administration. Peter Navarro, an economist who is known for his outspoken criticism of the Chinese regime and its trade practices against the United States, was selected by Trump to head the newly created National Trade Council and is believed to be playing a key role in forming the administration’s trade policies.