With each passing week, we get more news that China's economy is under pressure from U.S. tariffs. Growth is slowing, production has faltered and consumers are pulling back. It's exactly the leverage President Donald Trump hoped to create to bring China to the table, and it's time his negotiating team delivers results.
The president took a big economic and political risk by enacting tariffs to create a window for negotiations, and it would be a waste to let that window close. If his trade advisers can't unify around priorities and deliver a deal, the president should start looking for a new team. Intellectual property protections should be the focus.
Now of all times, China should be ready to come to make a deal
By many measures, tariffs have left China's economy in its weakest spot in nearly three decades. The economy is growing at its slowest rate since 1992, and growth in industrial production is likewise the slowest it has been in 17 years. Meanwhile, China's companies, especially in the manufacturing sector, are struggling under massive debts and are defaulting at a record rate. China's consumers are feeling the pinch, too, as retail sales have fallen short of expectations.
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This is the vulnerability to tariffs that the president predicted China would face, and it has coincided with continued strength in the U.S. economy. If Trump's team is looking for leverage in a trade negotiation with China, it certainly can't ask for much more.
But the window of opportunity the president has given his team to get a deal done is closing. Tariffs are creating pain for China, but they're also starting to cut into consumer pocketbooks at home. And as China's leaders look ahead to 2020, they see a real possibility for regime change in the United States. The closer we get to the election, the more likely China is to leave the negotiating table, sit on the sidelines and hope for a friendlier occupant in the White House.
To be clear, signing an agreement doesn't end the conversation on trade. Any deal reached now will require ongoing follow-up, verification and enforcement. But the president's team needs to seize the opportunity he has given them to unify around his biggest priorities, starting with intellectual property protections.
There's one issue in these negotiations that's most important
Intellectual property theft and forced technology transfer are the most prevalent complaints among U.S. businesses operating in China. They're a clear violation of widely accepted rules of trade, and they strike at the heart of America's strongest competitive advantage. Nothing is more vital to leveling the playing field with China, and nothing would do more to protect key assets of U.S. business and boost confidence.
Right now, negotiations are bogged down by a host of other issues, including Chinese industrial planning, subsidies to state enterprises and the size of trade deficits. Attempting to move on all of these fronts has resulted in movement on none of them.
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But China has signaled a willingness to make real, verifiable commitments on intellectual property theft and forced technology transfer. That's where the U.S. trade team should press the advantage it still has as talks resume in the coming weeks. Striking a credible deal on intellectual property would be a huge win for U.S. businesses and put a strong wind back in the sails of investors. And the resulting boost to the economy would certainly increase the president's chances of getting four more years to keep the pressure on China.
The president has shown great willingness to tolerate debate and division within his team of trade advisers. But it's time he demanded that they get focused and unify around getting a credible, verifiable win on intellectual property. If they can't step up and make that happen, then it's time for the president to ask them to step aside.
Brian Brenberg is executive vice president and chair of the business and finance program at The King's College in Manhattan. Follow him on Twitter: @BrianBrenberg
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This article originally appeared on USA TODAY: The China tariffs have worked. Time for trade deal is now or never