The problem is not so much currency manipulation as it is the theft of American intellectual property …
The biggest issue with China is not their currency manipulation or the trade imbalance between China and the United States. A trade imbalance means that we purchase more than we export, and the devaluation of their currency means that these goods are cheaper relative to our native goods. All to the benefit of the consumer, but not necessarily to a revenue-hungry nation or the special interests who cannot compete. Pretty much why Donald Trump purchased construction materials abroad and outsourced the production of his commercial products. In trade, at least free and fair trade, capitalism fosters competition whereas socialism and special interests fosters protectionism. And, if you believe that the United States does not engage in currency manipulation, let me introduce you to the privately-owned Federal Reserve whose interest-rate machinations have screwed over American consumers and allowed financial institutions to recapitalize, restructure, and profit at the public’s expense. Let us not forget, that many of the loans underwritten by the government to credit-impaired nations are not only part of foreign policy, but serve the special interests who are trading in the American-financed goods.
It is the theft of our intellectual property, both military and commercial. This allows them to build up countermeasures to the latest military equipment as well as flooding the world's growing marketplaces is Russia, India, Iran, South America, and China itself with knock-off goods which are often of a surprisingly quality.
Trade sanctions on Chinese imports in neither new nor novel. We have over 21,000 tariffs built into trade "normalization" agreements that only serve as a hidden tax on the American consumer. The sad fact is that any tariff on goods or services is already built-in to the final price and simply represents money flowing from your pockets to the government whose programs amount to wealth redistribution and the purchase of political power.
Even worse, we do not know exactly what is arriving in American ports, especially those operated by the Chinese. Not to mentioned the heavily unionized labor force that has been known to have ties to organized crime and is not above taking bribes in the past.
- Part of the solution may be to increase port inspections and to destroy goods that are found to violate copyrights, trademarks, or technical specifications.
- Part of the solution may be to mount an affirmative defense against hacking by attempting to destroy the communications links most often used by hackers to attack the United States.
- Part of the solution may be to take back the keys to the internet from ICANN (The Internet Corporation for Assigned Names and Numbers) that controls the namespaces associated with internet addresses. Perhaps demanding the replacement of IPv4 (Internet Protocol Version 4) with the more secure IPv6.
- Part of the solution may be to have critical network infrastructure components built in the United States and certified by testing each and every unit.
- Part of the solution may be to crack down on known spying centers and stop allowing unfettered access to American educational institutions.
Bottom line …
Let us hope that some Trump appointee will go beyond the political and financial considerations and start to consider the digital defense of the United States as a major” to-do” item. Pretty much why we need tough, tech-savvy people to head the Department of Treasury, Department of Commerce, and, above all, the Department of Justice. I do not believe that there will be a trade war – a pyrrhic victory to be sure – but a crackdown on the theft of intellectual property and a more vigorous program to detect foreign spies.
"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius