Many great comments on a great article. First, I want to assure everyone I am an optimist. Everything will eventually work out for the best, but the US and other law abiding countries must start demanding fair trade, and encourage (and possibly whip) rogue states, the main offender being China, to take positive steps toward fair trade practices. The sooner the West demands truly fair trade, the sooner it will happen.
Here is a summary of the "sins" China and other rogue nations are committing, mainly based on two books:
Peter Navarro, PhD, "The Coming China Wars" (Upper Saddle River, New Jersey: FT Press, 2008 [Pearson Education, Inc.]).
and
Elizabeth C. Economy, "The River Runs Black" (Cornell University Press, 2010).
+ A main conclusion of Navarro's book, is rogue nations (not only China, but obviously China is probably the largest offender) have cost the US economy about 1 million jobs per year, and about 10 million jobs over the last ten years. My primary thought after reading Navarro's book is 'why does the United States have the worst trade negotiators on the planet?' Nearly all of the issues he raises are trade issues.
+ China and other rogue nations have little regard for their environment. Therefore, buying goods manufactured in rogue states is an implicit export of pollution. Law abiding nations should be allowed to put a "pollution tax" on goods coming from such countries, and keep the tax until the rogue state proves it no longer pollutes. If implemented, the tax revenue must be used to stimulate the US economy, preferably in areas such as manufacturing. Navarro points out, that when US companies are given a level playing field, they are among the most competitive companies in the world.
+ Quite a few nations engage in cyber-terrorism. Same solution as above, a "cyber-terrorism" tax (or tariff) should be implemented and used to improve computer / IT security in the US, and other law abiding countries. Some of the revenue from the tax might be used for intervention, but this might prove as difficult as drug intervention.
+ Many nations, especially China, engage in IP (Intellectual Property) theft. Slap another tariff on them! It has been estimated that if US companies were paid for all IP that is stolen annually, the US would not have a trade deficit.
+ CEO's should be aware that rogue states not only manufacture what is authorized, but also keep the factory running and ship "out the back door". In this way completely authentic products are manufactured illegally, and then sold to benefit the rogue company. It is estimated that between 5% and 10% of Cisco's networking gear manufactured in China is unauthorized. The same is probably true of many other products made in China, ranging from high end running shoes, pharmaceuticals, handbags and Polo shirts.
+ Human rights abuse: Rogue states treat workers and their citizens in general very poorly. So buying from rogue states is implicit support of human rights abuse. The only way, in my opinion, to stop the abuse is to put a tariff on goods from such countries. We need to be very clear that the tariff will be reduced as they improve their human rights record. The main "sins" are not allowing workers to organize (anti-union tactics), not allowing workers to voice complaints about working conditions, low wages and little or no health care benefits.
+ Support of corrupt regimes: Buying goods from rogue states is implicit support of tyrants. China and other rogue nations buy raw materials from nations run by tyrants. Navarro gives several examples, including Mugabe, President of Zimbabwe, and others.
+ Buying goods from rogue nations is implicit support of imperialism. Again, Navarro gives examples of specific countries. Imperialism is one of the tactics China uses to buy raw materials at a huge discount. They go to poor nations, and to nations run by corrupt leaders, and offer to build roads, ports, railroads and other infrastructure. The only problem is the roads go straight to areas where there are raw materials the rogue nation needs. The host country gets very little benefit, since the imperialist "infrastructure" provider staffs the mines with its own managers. The imperialist country's managers have been known to have complete disregard and disdain for the workers they employ. And the contract allows China and other rogue imperialists to buy the raw materials at 50% off the market price. Further impoverishing the poor country.
+ And as Obama and the US Congress have mentioned recently, the Chinese currency is about 20 to 40 percent under-valued. This makes Chinese goods artificially cheap, and is a blatant unfair trade practice. My opinion is law abiding nations must be allowed to put a tariff on goods from countries where it can easily be shown (via "equivalent baskets of goods" and other similar proven economic methods) that a nation is artificially undervaluing its currency. It baffles me that the G20 did not vote to allow such a tariff at their recent meeting (in Seoul, South Korea, Nov 11 - 12).
+ "The River Runs Black" is mainly about pollution in China, and I will leave it as 'an exercise for another reader' to summarize it!
So why doesn't Obama, Congress and the US trade representative mention all the other "sins" of rogue nations? And why don't they mention all the nations that engage in unfair trade practices? Why pick on China, and only for one issue?
My answer: We (the United States) have the worst government money can buy!
Again, I want to close by repeating that I am an optimist. We the people must rise up and demand a level playing field economically, and demand our governments encourage (and possibly whip) the rogue states to take positive steps toward fair trade practices.