Many people seem to be misunderstanding the nature and character of the U.S.-China trade talks. This is not like NAFTA, where an existing trade deal needs to be replaced. We never had any trade deal with China- and, we don’t need one.
In all of these negotiations, China has not asked us for one single thing. We are the only one asking for things. The only thing that China wants from us is to remove the tariffs that we’re using to try to get China to change its behaviors and practices. We don’t need China’s agreement to our requests in order for America to move forward with business. The Trump administration can set forth its demands, and maintain the tariffs where they are (or higher or lower, or on more or fewer goods)- or remove them, altogether, with a last-chance window for China to make purchases and structural changes. We don’t need China to partake in these decisions. The United States can do whatever it wants. We are the one with the gripes- not China. We are the party being wronged- not China.
Getting a “deal” is not what matters most. What matters most is that the Trump administration sets fixed tariff rates as “ceilings”, and decides the maximum scope of goods coverage, to provide U.S. companies with certainty, and China with the motivation to change. Tariffs should be able to go lower- but never higher. There should be no penalties that send rates above the rate ceilings. If China makes a change that leads to a lower tariff, but then fails to maintain the changed practice, the ceiling rate for that tariff is still the highest rate that such tariff should ever go.
I propose that the administration send China its list of requirements in order for China to receive no-tariff or low-tariff access for its goods into the United States, including, but not limited to: The removal of tariffs on U.S. exports; China to purchase soybeans and other determined products; the ending of forced technology transfers for U.S. companies; the cessation of corporate espionage and IP theft by China, etc., in a document called The United States Of America’s Trade Cooperation Effort With The People’s Republic of China, signed by the President of the United States. The document should notify China of the tariff rates and the categories of goods receiving the tariffs, and guide China on how U.S. product purchases, structural changes, and changed practices, once proved, will work to reduce tariff rates, per a schedule that sets-out the tariff reduction China will earn for any milestone it reaches, with China to bear the burden of proof.
For example, if China purchase “X” dollars of soybeans and corn over the next twenty-four months, certain tariffs are lowered by two percentage points, and will remain at the lowered rate, provided that China’s subsequent purchases of such products never fall below “X” dollars during any subsequent twelve month period.
The same concept would apply for structural changes, with the milestones used for measurements of changes, and the time-frames required to prove true and permanent changes, and the tariff consequences, to be crafted appropriately.
We don’t need China’s agreement to this. We just need to draft the document, sign it, and send it- to be effective immediately.
From there, China can request modifications to The Trade Cooperation Effort document’s terms, which the administration can consider as we’re moving forward with commerce using the ceiling tariff rates that are set on Chinese exports to the U.S., at levels that provide certainty, visibility, and financial viability for U.S. businesses- and an incentive for China to change its ways. What matters most is that we implement tariff rate “ceilings” and set the maximum scope of goods coverage, to provide American companies with certainty.
China will have to pay the tariffs until it meets our objectives and requirements. No “deal” is needed. Any “deal” would be based on China’s future performances, anyway; no immediate actions will come from any “deal” that can resolve the numerous issues between the parties. Time will be required, any way it’s sliced.
The trade talks are just goodwill by the administration to build a mutual consensus. But we are not “asking” China to change- we are telling China that if it fails to change, the costs of doing business with us will rise. “Stop breaking international laws and defying international trade rules and practices, and then we will accept your products, without tariffs.”
That’s the deal.
I’m not suggesting that we end the talks with China, I’m only clarifying that we don’t need China’s agreement and decision on these matters. People are getting too caught-up in whether we get a “deal” from China. Having the administration set rate-ceilings and finalize the maximum scope of goods coverage in order to provide U.S. businesses with certainty, and China with a strong incentive to make more purchases of U.S. products and structural changes to its economy and its legal and financial systems, is far more important than are China’s decisions or agreements.
President Trump: Set tariff rate ceilings and the maximum scope of goods coverage, and send China The United States Of America’s Trade Cooperation Effort With The People’s Republic of China document, and let’s move on. China will have to figure it out from there.
Neil S. Siskind, Esq., President
The Siskind Law Firm
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Neil Siskind’s Government Work:
– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern
Neil Siskind’s Community Assistance:
Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.
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