When the Trump White House slapped China with $60 billion tariffs over intellectual property theft, it was not a tax on the consumer. It was a penalty for theft and a long over-due penalty at that.
Free-traders rightly take issues with universal tariffs on products like steel. But the cost of intellectual property theft to the US economy—and American property holders-- from China is estimated to be as much as $500 billion per year, according to the 2017 report from the Commission on the Theft of American Intellectual Property.
The report notes that the Office of the Director of National Intelligence said in 2015 that the cost of electronic espionage alone costs the economy $400 billion per year.
The problem is not readily apparent to Americans because America largely prevents this stolen property from entering into the United States.
But if you travel around the world, you can walk into any electronic shop and buy knock-off brand names like Bose and Apple for 70 percent off.
Yes, it’s true. The US government can not prevent an entire human being from entering the country illegally, but if you slap an Apple logo on a device without permission, the federal government will find it and prevent if from being sold in America.
Too bad the Chinese do the exact opposite.
In 2011 the Daily Mail ran a story about one shop in Kunming, China that was almost an exact replica of an Apple store—except of course it wasn’t an Apple store. The products were fake, but so convincing that all the employees really thought that they worked for Apple.
Fake goods are so prevalent in Asia that the term “fake goods” was invented in the East many years before the term “fake news” was born.
But there are other, strategic reasons, why these tariffs make sense.
China has ambitions as a world power, not just a regional power in Asia.
All over Africa and Asia China is trying to use it’s new economic might to buy alliances through investment and trade. China is now the largest trading partner with Africa, and the leading investor in Vietnam, roles once reserved for countries like Japan, the United States or Australia.
But as the victims will soon understand, these trade and investment policies will undermine the independence of the “target” countries even as they enjoy the temporary largess of the Chinese.
Because the Chinese Communist Party’s first objective is to hold on to power and grow in influence by whatever means necessary.
They will not allow little things like sovereignty or international law stand in the way of their objective. They believe that the 21st Century is China’s century, and like Kaiser Wilhelm, they’ll eventually use the mailed fist to get what they want.
And they do all these tricks with money that is stolen from both the US economy as whole and from individual property owners. They hack into our computer networks with such regularity that these occurrences aren’t even news anymore.
Chinese hacking is so sophisticated that China could hack our elections and successfully blame in on the Russians, and that’s no lie.
In all this China says it is trying to combat piracy and deplores hacking.
But if I don’t know anything else, I know this: You don’t open up an Apple store in Kunming, China without the government knowing exactly what is going on. In fact, it’s increasingly clear as the government hordes even more power that nothing happens in China without government say-so.
China has pretenses to be a world power, and to show the world an alternate system to that exemplified by the US.
They are welcome to try. But if you take away the money they steal from property owners around the world, the truth is that all China really has is a rusty mailed fist. China needs trade with the West more than the West needs fake Chinese goods. There is nothing that China produces that we can’t produce ourselves or source someplace else.
It’s time for China to find that out.