Gary Locke to Donald Trump: 'There are no winners in a trade war'
Gary Locke worries the Trump administration is lurching toward a twofold disaster in its China policy.
But he's also hopeful that disaster can be avoided.
Locke is a former U.S. ambassador to China for President Barack Obama, a former U.S. commerce secretary and former governor of Washington state. So he's been heavily involved in trade issues -- China is Washington's top trade partner.
Fear No. 1: War with China over the South China Sea
Last year, President Donald Trump's chief political strategist Steve Bannon said a war with China is “inevitable” in the next five to 10 years. And Bannon predicted the flashpoint would be disputed islands in the South China Sea. The statements were made before Bannon joined the Trump campaign.
On Friday, Trump touched on the issue in a joint press conference with Japanese prime minister Shinzo Abe. Trump signaled his commitment to a joint defense treaty that Japan hopes would protect its control over disputed islands that China also claims. Earlier in the day, Trump also sought to ease tensions with China by reaffirming America's commitment to a "one China" policy in China's dispute with Taiwan.
Locke agrees that China’s efforts to assert military dominance in the South China Sea are alarming. But he called Bannon’s war talk “unacceptable,” because it risks “painting them into a corner which forces them to overreact.” What’s needed, Locke says, is more diplomatic hard work to bring all of the parties in the region together.
Locke is hopeful that the Trump administration will listen to the many foreign policy experts it has access to, from Henry Kissinger to experienced members of Congress.
Fear No. 2. How a trade war with China could hit Washington state
On the campaign trail, Donald Trump spoke of a 45 percent tariff on goods made in China. Locke predicted that would lead to an immediate trade war.
“China would turn right around and slap similar tariffs on American goods going to China," Locke said. “And that means that millions of jobs in America would be jeopardized.”
And, he said, Washington state would take a huge hit: “Twenty-five percent of all the Boeing airplanes that are built are destined for China. Can you imagine if China were to then slap huge tariff on American airplanes, Boeing airplanes?”
Locke said China would just turn to Airbus.
In reality there are limits to what the president can do on his own with tariffs without congressional support, and it's also not clear if talk about a 45 percent tariff was campaign rhetoric, a serious proposal or just a threat. But if you take the idea of a big U.S. import tax on Chinese goods literally, as many analysts now do, Locke said, it would spell disaster for Washington state workers and consumers.
“Washington exports more goods and services to China than any other state. China is our No. 1 export destination,” Locke said, noting that our exports range from farm products to machinery to Boeing airplanes.
Nevertheless, Locke agreed that "we have trade issues with China. China needs to more quickly implement the agreements under its entrance into the WTO." But, he said, the solution is the hard work of diplomacy.
"There are no winners in a trade war," Locke said. "And the consumers and workers on both sides of the ocean would lose."
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