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Here's the 'real solution' to the trade war that will make China 'play by the rules'

  • Commerce Secretary Wilbur Ross is heading to China for trade talks.
  • The real solution would be a bilateral, enforceable, rules-based trade pact that creates the open and fair reciprocal trade.
  • A U.S.–China trade agreement must achieve these three key goals.
Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony November 9, 2017 in Beijing, China.
Getty Images
Chinese President Xi Jinping and U.S. President Donald Trump attend a welcoming ceremony November 9, 2017 in Beijing, China.

President Donald Trump has done more for manufacturing workers than any president in recent history, and now he has the chance to cement his legacy—by seeking, negotiating and securing a history-making trade agreement with China.

With U.S. Commerce Secretary Wilbur Ross headed to China in the coming days, the administration has the chance to lay the foundation to advance this goal. It would be an ambitious undertaking, but that is no reason to avoid it.

After years of complaining about China, it's time for bold action that redefines our economic relationship for the 21st century and ends fears of a trade war. Despite the naysayers, our leaders are capable of accomplishing big things. After all, just months ago, they said tax reform was impossible.

China is America's largest goods trading partner and in 2017 bought more than $95 billion worth of made-in-the-USA goods. But China and its favored Chinese industries are also the cause of some of manufacturers' biggest challenges.

"Companies should not be forced to hand over data and technology just to do business in China."

They steal manufacturers' valuable ideas and intellectual property. They undercut us in the global marketplace and don't play by the same rules. They profit from these actions at our expense.

President Trump has spoken and acted forcefully to counter these challenges, consistent with the message of his campaign. But a piecemeal approach of using tariffs will not solve the issue and is likely to create even more problems for manufacturers.

In an interesting turn, though, perhaps predicted by the president and his team, the tariff discussion may open the door for the real solution: a bilateral, enforceable, rules-based trade pact that creates the open and fair reciprocal trade that Americans want and the president has prioritized.

A U.S.–China trade agreement must achieve three key goals to be successful: eliminate tariffs and discriminatory practices that prevent American companies from selling more manufactured goods to China; end Chinese policies that distort the free market and give their companies an unfair advantage; and create clear and binding enforcement tools to ensure the United States can hold China fully accountable.

This agreement must also go further than the existing World Trade Organization agreements, which, as the president has noted, allow Chinese tariffs to be more than three times higher than U.S. tariffs. It must require stricter rules against unfair subsidies. It must include best-in-class provisions to end China's favoritism toward domestic industries and to protect intellectual property. Companies should not be forced to hand over data and technology just to do business in China.

Other countries know a trade agreement is the right approach. Canada and Japan are already seeking agreements with China, and so far, China has cooperated. If another country beats us to the punch, they will enjoy an advantage in selling their products and protecting their industries from China's unfair tactics.

The time for waiting is over. President Trump has the attention of the Chinese government and has given us unprecedented leverage. Chinese President Xi Jinping, though he has made similar statements before, recently vowed to pursue "further opening" of the Chinese economy. President Trump should seize this opportunity and press President Xi to stand by his word, using an agreement to lock in real changes.

President Trump can do what no American president has been able to do and what a piecemeal tariff approach cannot achieve: make China play by the rules and stop cheating once and for all, while empowering manufacturers in the United States to compete in China like never before.

Commentary by Jay Timmons, president and CEO, National Association of Manufacturers.

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