May 3, 2018

What US Trade Negotiators Should Remember in China

Daniel Griswold Senior Research Fellow

President Trump’s top trade advisers are traveling to China this week to try to wrestle a better deal for the United States from their counterparts in Beijing. At the top of the list of U.S. demands are more protections for American intellectual property, lower tariffs on American exports to China, and a reduction in the bilateral trade deficit that topped $375 billion last year. Lost in the bluster and threats of retaliatory tariffs is some good news, which is that trade between the United States and China is healthy, and we come to the negotiating table with a strong hand.

The U.S. representatives should keep several basic facts handy in their crib notes. The first reality that should guide the talks is that China’s appropriation of intellectual property, while a real problem for some American firms, is not an existential threat to the United States. Claims that China’s intellectual property practices are costing the United States as much as $600 billion a year are ridiculously exaggerated. American companies are losing potential revenue from the lack of intellectual property protection, but they are still profiting overall from their investments in China.

Read more: America Holds the Best Cards Heading into China Trade Talks

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