According to U.S. Trade Representative Robert Lighthizer, President Donald Trump’s top negotiator on trade, there is one country that poses an “unprecedented” threat to the world trading system that can’t be addressed under current global rules.
“There is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” Lighthizer said Monday in a speech in Washington. “The sheer scale of their coordinated effort to develop their economy, to subsidize, to create national champions, to force technology transfers and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.”
Lighthizer went on to say that the World Trade Organization and the rules that underlie international trade weren’t designed to deal with China’s current approach to its economy.
Mr. Lighhizer also said that he doesn’t want to jump to any conclusions regarding an ongoing investigation into intellectual property violations by China under Section 301 of the Trade Act. If China is found to have trade practices, this provision of the Trade Act allows the president to unilaterally impose tariffs and other restrictions on China to protect U.S. industries.
This comes after President Trump’s campaign promise to label China a currency manipulator, though the president has eased off on slapping tariffs on steel imports. Lighthizer did, however, say that changes are coming to correct a system that leads to trade deficits and fails workers. “There has been a growing feeling that the system that has developed in recent years is not quite fair to American workers and manufacturing and that we need to change,” he said. “We will have change in trade policy.”
This focus on China by the Trump Administration comes at a time when China is being unseated as the world’s growth engine by India.
As we reported Monday, India’s workforce is expected to climb to 1.08 billion within the next 20 years and will account for more than half of the increase in Asia’s workforce in the coming decade.
India’s younger workforce won’t just be larger than China’s, it will also be better educated and better trained in developing technologies, something that will make it a massive economic threat to not just China, but the U.S. as well.
For more information on the Indian growth story, and how best to invest in it and other emerging market growth stories, click here.