Matthew Klein of Barron’s makes the case against using tariffs to target Chinese government misconduct.
The trade conflict between the U.S. and China is escalating. After repeatedly accusing the Chinese government of “economic aggression,” the U.S. government is considering imposing tariffs on as much as $450 billion of goods imported from China. China cannot respond symmetrically—it imports too little from the U.S.—but it could easily devalue its exchange rate or use discriminatory regulations to harm the profitability of American multinationals.
American anger is justified: Chinese policies have systematically distorted the world economy at the expense of U.S. workers. But tariffs are the wrong response. They will penalize regular Americans while doing little to address China’s harmful practices. Those practices have caused at least as much harm to ordinary Chinese as they have to the rest of the world.
China’s economic policies are a product of the Communist Party’s intolerance of alternative centers of power. After the pro-democracy movement met its violent end in 1989, Deng Xiaoping’s program of “reform and opening up” was modified so that party elites could capture as much of China’s new wealth for themselves as possible. …
… The trade conflict between the U.S. and China is therefore a consequence of China’s internal class conflict. Tariffs will not fix anything as long as China’s elites remain committed to extracting as much as they can from Chinese workers.
