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This is Open to Debate. I'm John Donvan for an episode we're doing in partnership with the Council on Foreign Relations. It's on their stage. I stand now before a live audience in Washington, D.C. where, to put it mildly, things are moving. kind of fast since a new administration took over in the white house and in this one we're going to catch a ride along with one of these fast-moving developments
Here's the question that we will now debate with the participation of four expert debaters. Was Trump right to increase tariffs on Chinese imports? Answering yes to our question, was Trump right to increase tariffs on Chinese imports? I want to welcome Stephen Moore. He's an economist, an author, a senior fellow at the Heritage Foundation, as well as co-founder of Unleash Prosperity. Stephen Moore, thank you so much for joining us on the program. Thank you.
And your partner in this debate also arguing yes in answer to the question is Scott Paul. Scott is president of the Alliance for American Manufacturing. Scott, thank you so much for joining us. It's great to have you here.
Opposing them, arguing no in answer to the question. I'd like to start with Jennifer Hillman. Jennifer, you are a senior fellow for trade and international political economy here at the Council on Foreign Relations. Thank you so much for lending your expertise to this conversation and debate.
And finally, coming to another note, Rana Minter. Rana is the S.T. Lee Chair in U.S. Asia Relations at the Harvard Kennedy School. Rana, thank you so much for making the trip down here to be part of this debate this evening. Let's get started. And we're going to go right into our opening statements. Stephen Moore, you are up first. You are answering yes to the question. Trump was right to increase tariffs on Chinese imports. Please tell us why. Ladies and gentlemen, privileged to be here.
Thank you to open to debate to have me again. I think this is the third time I've done this. This may be one of the stranger debates that I've been involved in because Scott is a liberal Democrat and I'm a conservative Republican and we are on the same side on this.
I do believe as a free market conservative that free trade is one of the pillars of prosperity. It's one of the things that's made America the strongest and most prosperous country in the world. And so in most cases, we want to keep our mark. gets open. And by the way, as a matter of economics, when two
parties trade with each other, by definition, they're both better off. So I do believe in free trade, and I'm not in favor of many of Trump's terrorists, even though I'm a Trump guy. But I do agree with Trump on China, and I think China is clearly a special case.
China is a villain. They're an enemy. And they're a dangerous country. And I think most Americans would agree with that promise. And it wasn't so. 25 or 30 years ago, when China was making that transition from communism to free market capitalism, China has moved back towards communism, much more towards an authoritarian government that is dangerous.
only to our economy, but our national security. And one thing that you should all think about, whether you're pro-free trade or not, is this. Would you support free trade with Japan in 1936?
would you have supported free trade with Germany in 1938? And I would submit the answer to that question in both cases is absolutely not. And I do believe we're on the precipice of a potential... serious conflict with china and that being the case it doesn't make a lot of sense to me that we have open and free trade with china i think we have to have restrictions i think trump's tariffs make a lot of sense
Not so much economically, but as a matter of America's national security. They lie. They cheat. They steal. They don't play by the rules. Their tariffs are much higher than ours are. And for all these reasons, Trump is absolutely right to impose tariffs on China, but not the rest of the world. Thank you, Stephen Moore.
And now to give her opening statement, I want to welcome back to the center Jennifer Hillman. Jennifer, you're answering no to the question. Trump was not right to increase tariffs on Chinese imports. Please take this chance to tell us why. Okay, I'm going to provide three reasons why I think this was a mistake. First is that the tariffs are damaging to the U.S. economy. We have to remember that tariffs are taxes.
on Americans that American importers pay and pass those on in the form of higher costs to American consumers. In just one year. 2018, the past tariffs cost the American consumer an average of $14 billion. The tariffs are going to fall most heavily on the lower or middle income people because they spend a much higher percentage of their overall income.
buying goods, the kind of food and medicine and electronics and everything else that is the subject of the tariffs. And this comes at a time in which the wealth gap in the United States is out of control. If you look at the numbers, the top 1%. of the people in the United States have 30% of all of the wealth. The bottom 50, 50% of the people in this country have only 4% of the wealth. And these tariffs are going to make that worse. The tariffs are also costing jobs. because they make...
input materials that companies need to make stuff more expensive. The current estimate is these tariffs alone, this 10% increase in tariff, will cost us 78,000 jobs. And the tariffs invite retaliation. China will put on tariffs on American goods, which makes it harder for our exports. The second reason why I think these tariffs are a bad idea is that they're illegal.
They violate the commitments that the United States made at the WTO, not just to China, but to all of the members of the WTO that we would not impose tariffs higher than our bound rates and that we would not discriminate. And these tariffs... violate both of those premises. They are also illegal under U.S. law. The U.S. Constitution gives
Congress, not the president, the power to impose the tariffs. But the president has used an international emergency to put these tariffs on in a way that has never been done and is not consistent with the Constitution. And the illegality hurts. Because it tells all of our trading partners, you can't trust America. And the last reason why I think these tariffs are a mistake is it's not clear why we're doing them.
The executive order that imposed the tariffs says very clearly there's one reason for the tariffs. That's to stop fentanyl. coming in from China. At the same day, at the same time that the president says that these tariffs are all about fentanyl, he says, no, actually, they're to raise revenue.
in order to pay for tax cuts. And then he says, no, they're actually to deal with the trade deficit. And then the next thing is, no, they're actually to make a tariff wall around the United States in order for everything to have to be made in the United States. So the president is asking them. American people to bear the cost and the job losses from these tariffs without any clear understanding about why are they being imposed and what's the end game that we're shooting for. Thank you, Jennifer.
All right. I want to welcome back to the center Scott Paul. Scott, you're answering yes to the question. Was Trump right to increase tariffs on Chinese imports? Here's your chance to tell us why. Thank you, John. Thank you to Open Debate and the Council on Foreign Relations and everybody here tonight for the opportunity to talk about this.
important issue. As you can imagine, Stephen and I, the Venn diagram of things we agree on is pretty narrow. It includes a China tariff, the Chicago Bears and the Chicago Cubs. And I should add, I supported the application of the China tariff. during the Biden administration as well as during the first administration.
And I want to build on Stephen's reason why. At the core of this is national security. And what is the most important function of the government here? Is it to guarantee our security or is it to pursue? maximizing consumer welfare. And I would argue that over the course of our history that national security has been a far more compelling reason. We made an enormous mistake.
25 years ago. In hindsight, I didn't support that decision. I know Stephen did. But you cannot look at the trillions of dollars that have shifted out of the United States and into the hands of the Chinese Communist Party. Party as being an enormous historic mistake. It was in many ways a dystopian Marshall Plan. The opposite of what was supposed to happen occurred. And there has been a lot of damage. because of this policy and then because of the years of inaction that followed it.
We lost one of every three manufacturing jobs in this country during the China shock. We lost 40,000 factories that made highly skilled things. These are not just plastic widgets. These are things like machine tools. These are shipyards that build ships. This is semiconductor capability that left our country during this period of time. Millions of lives were destroyed, and it has been well documented. They lost their jobs, their wages were forever depressed, and it had social impacts.
that are going to last generations in this country. Now, I will say a tariff is not the only answer to this solution, but it is a necessary component of it. And in a $30 trillion... $30 trillion economy. We are well equipped to absorb this. China started this trade war 25 years ago. It's about time we stood up for American workers, imposed this tariff, and engage in a more responsible manner.
Thank you. Thank you, Scott Paul. And that brings us now to Rana Mitter. Rana, you are answering no to the question. Is Trump right to increase tariffs on Chinese imports? Thank you, John. So you have a major business rival who you want to give a... dire warning that that rival is going the wrong direction. And he decided to do it old school. So he gets home, he walks upstairs, he walks into the bedroom, throws back the door and sees right there on the bed is a sheet.
stained with blood from a horse's hind leg. And in the card left next to it, it says, sorry, it was too much of a schlep to get a horse's head. Will this do? That, in a nutshell, is the problem with the 10% tariffs that our proposition here are proposing. Because...
If the aim is national security, if the aim is restoring manufacturing jobs for the United States, if the job is to stop fentanyl, all of which are very worthy aims, and if those were the aims only, I'd come over to your side right now, gentlemen, then these tariffs are not going to... to do it. How do we know that? Because look at China's reaction. There have been two major things. The first one is to announce that they will take the United States to the world trade.
organization. Jennifer is the expert here, but we should get a result back in about, I don't know, seven and a half years, something like that. Doesn't sound all that urgent to me. The other thing that we've done, we've seen them do, is to put an urgent investigation on antitrust grounds. on Google. That will be Google that was banned from China 15 years ago and hasn't actually operated in the country as a search engine for about that period of time. That doesn't suggest to me...
that the adversary that Stephen and Scott are talking about is exactly quaking at this particular measure. We should do something that will actually work. Chinese investment and the trade that China will remove from the United States. It will send it the direction of Europe. These tariffs will push more and more incentive to China and the EU to operate together at a time when there is a great deal of uncertainty about where American power is going in the world.
I think that American power used well has been one of the great forces for good in the last 75 years. For that reason, I think it is necessary that these ineffective tariffs should be dropped and instead... We think about what is actually going to work to solve the very real problems the proposition have put forward, but which their solution, I think, is going to do very little to address, at least if Chinese responses are anything to go by. Thanks. Thank you, Ronald Minow.
Okay, we're going to take a break right now. We are taking on the question, was Trump right to increase tariffs on Chinese imports? We will continue when we come back. I'm John Donvan. This is Open to Debate. Welcome back to Open to Debate. I'm John Donvan. The question we're taking on, was Trump right to increase tariffs on Chinese imports? We have heard opening statements from Scott Paul, Jennifer Hillman, Stephen Moore, and Ronna Minter. And now we're going to get into the discussion.
All right, we've heard opening statements and now we move on to round two. I just want to say what I've heard in the opening round is Stephen Moore's opening making the point that... China is the villain. China is the enemy. China is dangerous. And I don't think that anybody on the stage
diverts from that opinion. The value and the practice of tariffs is really where the disagreement is. Stephen Moore arguing that he's for free trade, but that China merits an exception. He and his partner are arguing that it's actually a national security threat. They also are arguing that the US economy could handle the consequences to the US economy that would come about because of tariffs, and that China would actually be malleable to changing its behavior if the tariffs were put into place.
Their opponents are arguing the exact opposite. They're saying that China would not flinch, that China would be able to move on to arrangements with other. groups such as the EU and would be likely to do so. They also argue that the pain to the US economy is not something that can be just brushed off. They also point out that it's illegal. which sends a message that the United States is not abiding by the rule of law, that it's not clear what the goal is, and fundamentally that China
Could just handle it. I want to start by taking to this side your opponent's argument that the national security issue is real. the fact that the national security issue has to take precedence. Who would like to respond to that first? Rana? I think part of the problem with that argument is that if you look at the level of trade that the United States had with Japan in 1936, for instance, it's far, far lower, not least because of course...
the effects of tariffs during the Great Depression, which did not do a great deal in the pre-war period to improve the economies of any country, compared to where China is now in the US economy. One of the, I mean, Scott, you're representing manufacturers here. You will know that
Small and medium-sized manufacturers in the United States are amongst the companies that have been suffering most and most panicked in the last few weeks because they don't regard this as a national security issue. They regard this as an economic security issue. Is it a good idea over time? Of course.
to change the way in which one particular producer, China, dominates so much of the global supply chain. But the way to do that is by going to allies, other liberal allies, such as not only the EU we mentioned, but also ASEAN. Southeast Asia, places like India, and coming up with collective strategies.
Tariffs don't help to do that because in this particular case, what will happen is that Chinese trade will go elsewhere to other partners who will not impose tariffs on China. And that will not be good for the security of the United States because it causes economic damage without any commensurate gain. Ron, I respect the argument, but I respectfully disagree. The last round of tariffs that went into place during the first Trump administration
During that period of time, we've seen manufacturing jobs grow in the United States. We've seen the trade deficit come down. And because of COVID and other factors, and I would say the unreliability of the Chinese government, not the American government, you've seen firms with an ABC, anywhere but China, philosophy now.
and the tariff will be designed to further pull them out, we need to find a way to get them into the United States. And the tariff doesn't necessarily do that. But I do know many manufacturers who are excited to have a level plan. playing field after years of having intellectual property theft, labor and environmental violations, a WTO that, by the way, is not equipped.
to deal with any of this. They can't deal with subsidies, with government intervention in the economy the way the Chinese Communist Party is doing this. So going to the WTO is a fool's errand. And I think everybody agrees with that in the trade establishment. who has been fighting back against China these years. So I completely disagree. Is a tariff a perfect tool? It is not a perfect tool, but it is a very good tool.
coupled with other measures to do this? So I guess I would only say two things. I mean, if you look at what actually happened as a result of the previous Trump tariffs, which were heavily concentrated on steel and aluminum and on a... And again, this has been very, very well studied. saw job increases. But in everything that was downstream of that, everybody that needs to use metal as of any kind, what you saw is actual job losses. And the net on balance was negative for the United States.
The net on balance was job losses. The net on balance was a decline in overall income. The net on balance was negative. And you add on top of that. that what China did primarily in response to the first round of tariff was to impose very substantial tariffs on U.S. wheat, U.S. corn, U.S. soybeans, and other products. The Trump administration had to pay subsidies to our farmers.
to the tune of $61 billion to make up for the fact that they had lost their markets, more than 55% reduction in the amount of U.S. corn, wheat, and soybeans going to China in a single year. That's landing at your feet, Steve Moore. Look, I agree with a lot of your economic arguments. In fact, you are quite correct that tariffs are taxes.
You're quite correct that the burden of those taxes are largely borne by American consumers. That's true. Although some of it is borne by the country that produced those things because their price is higher, so they can't sell as much. I'm listening to the debate, and it is true we're talking past each other a little bit.
The point I'm making is we are facing a very dangerous country in China. I mean, I wonder if your position would change if a newsflash just came across the wire saying that China invaded Taiwan. Would that change your opinion about how we should deal with China? Hang on. I know you meant it as a rhetorical question. I want to give you 10 seconds to let us know. So I think the only issue is, are tariffs the right way to respond to that? I mean, what would a tariff on...
ports from China do if China were to invade Taiwan? So the reality of the world economy today is really very simple. We are the alpha male. We are the one country in the world that everyone has to trade with. So this idea that China is going to retaliate against us, they cannot possibly win a tit-for-tat type of...
war with us, because if we can't trade with China, it will hurt the United States, no question about it. It'll mean things are going to be more expensive. If China can't trade with us, they go into a Great Depression. They can't possibly survive as an economy if they do not have access to America's markets. One of the things that makes Trump, whether you like Trump or not, an incredible negotiator, he understands the most important thing in a negotiation is the concept of leverage.
Leverage. Whoever has leverage in a contest almost always wins. We have tremendous leverage over China. 25 years from now, we may not have that leverage. They're growing pretty fast. We use the leverage now. I guarantee you, Trump is going to win this fight with China. They are going to back down. Okay, Rana, take that point. They're going to back down. We know that.
now going in. And that makes the posture worth it. But what is it that they're going to back down on? There have been rumors, I hope not substantiated, that some aspects of Taiwan's business might be placed under tariffs as well. And that would be very dangerous, I think, to a state that has been actually very important.
I would add, I really am, I think this is kind of really the central point, which is what is the goal? You know, in the previous Trump administration, again, you have to remember, we imposed $360 billion worth of tariffs on China. Why? The reason stated at the time was because China was stealing our intellectual property, was forcing technology transfers. I mean, there was a very significant Section 301 report that said those were the things that China was doing wrong.
And then you look at what happened. The first moment the Trump administration started to negotiate with China, the number one thing on the list was to say to China, buy more American goods, not deal with technology transfer or IP, buy more. American goods. So that says that what we want from China is for them to buy more from us, dealing with the trade deficit.
So your challenge to the other side sounds like, what's the point? What's the goal? What is the goal? What does victory look like? I can very clearly articulate the goal here. It is de-risking our economy from China and presenting more opportunities.
American manufacturing. I do think it's important that we work from the same set of facts. We have more manufacturing jobs today than we did when the tariff started. And that's not only in steel, that is across the board. Our economy is larger. There's more jobs in the larger economy. inflation is under control. The tariffs were not a significant
contributor to prices or inflation. And they can't be because in a $30 trillion economy, they are a tiny slice of that. And our firms are not infants. They can make choices about sourcing, and many of them did. They went to other countries.
Some of them came back to the United States. Some of them renegotiated contracts. Some of them took lower margins. They did all of this because they're innovative and they have the ability to do that. And that's what firms will do this time as well. And they will continue. to de-risk from China. And that is exactly what the goal of this is. It is twofold. So we need to de-risk and we need to not reward an adversary. And we need to trade with nations that share.
our values. So that is the fundamental goal of these tariffs. But large numbers of those countries that share the U.S.'s values, including on free trade and other values such as democracy, also have huge amounts of trade with China. It's true of Mexico. It's true of most of the democracies of Southeast Asia. It's true, actually, of India, which has bad political relationships with China, but very, very extensive trading.
How would you get to a situation realistically in the near future, Scott, where something like an iPhone was manufactured at a reasonable cost to the American consumer through manufacturing in the United States where labor costs and the capacity to make the... components is not something that can simply, as you know, be drummed up overnight, but will take many years and possibly decades to actually develop. How does that actually happen? Our areas of most exposure to China are indeed...
smartphones, laptops, and Christmas decorations. Okay. Over time, we can find substitutes for all three. Apple is already moving some production out of China into India. I'd like to see some of that. I'd like to see... Apple invests some of its market capitalization in U.S. machine tooling again. They could be a real game changer there if they chose to do that. But that is a process that is not impossible. But what is not acceptable is the continued erosion of U.S.
capabilities on frontline technologies and capabilities that are critical to our national security, which we allowed to erode a tariff, again, as part of a backstop there towards setting us on the correct path. I want to bring Stephen to the conversation with you. I want to... shift the focus to the point that Jennifer Hillman made that the way it's being done is not legal.
and that it's going to break trust with our trading partners, that this is not going to just stop with China, that we're showing ourselves being inconsistent and ignoring the rule of law, and that that has long-term consequences.
And the two of you go back and forth. I don't care what the World Trade Organization says. We're America. We can do whatever we want to. I wish we had never joined it in the first place. And I'm a free trade guy. I think they've been detrimental to trade. But I did want to make just one quick point about this fentanyl issue.
because fentanyl is the leading cause of death of our young people in America. It's a poison that's being imported to our country. And we know that China is complicit in that. So it seems to me it's not unreasonable to say to China, you're going to do everything you can to stop killing our children.
And if they say no, we say we're going to raise tariffs on you. And if they still say no, we're going to raise tariffs on you again and again and again until they stop doing it because they cannot grow their economy without having access to America's markets. And while we have the leverage.
We should use it to get countries and do things that are in our interest. Very quickly on the WTO point. I understand it's very easy here in Washington to poo-poo the WTO. But at its core, it does a couple of things. A, it prevents utter chaos.
trading system, and B, importantly, it protects America and American goods from being discriminated against. So, I mean, if we want to walk away from the WTO, that's fine, but then all of our trading partners are free to walk away from it too, which means they can discriminate against America anytime, anytime.
day for any reason they want. They can decide they're going to not honor any of our intellectual property protections. They can do anything they want just because they want to, if that's the world we want to live in. And on the fentanyl point, the only point about, seriously, about the fentanyl... is that is the only basis on which these particular tariffs are lawfully imposed. And yet, as you all discussed and as we've discussed here, that's not the goal.
I mean, we all know that. Just again to echo Jennifer's point there about the message that is sent by this particular set of tariffs. We're not talking about generic tariffs or even the 60% tariffs that President Trump said he was going to impose during the election campaign. It's 10%, which is...
Neither one thing or the other. I go back to my point, the Chinese themselves seem pretty relaxed about this particular act. And I'm not sure that if we are concerned about national security, that's the reaction we want from the Chinese side. But the question I have, and this is a genuine analytical question. What is it?
in a world where tariffs are being thrown up without any kind of international organization that will be different from the walled-off global trading system that ultimately made the Great Depression much worse and led, in part, to World War II. Paul. So a couple of things. Trade has already started to regionalize. I mean, and that was a trend that was underway before. I think that's number one. I think number two is that we run a trillion dollar...
trade deficit in the United States in goods. We are the consumer of last resort around the world. We actually stand out as a country that does not have an industrial policy that is export driven. Unlike Germany, unlike China, unlike Japan, and you go down the list of it. So in many ways, we are right now the most responsible.
nation. We're not the outlier. Again, there has been a trade war going on for 25 years, just that we've sat back and taken it. And we've taken it to the point where it's cost lives, it's cost livelihoods, it's cost our national security capabilities. And so I, for one, am happy that not only Donald Trump but Joe Biden stood up. And with the Biden and the first Trump administration, there's an effective rate of about 20 percent on Chinese goods right now.
And your assessment of the United States economy's ability to sustain itself in the face of Chinese tariff retaliation is, you're pretty confident that we would just kind of float through it? Absolutely. I mean, there would be obviously there's adjustment issues with anything that comes up, but we are more capable of absorbing that than any other nation around the world. We are far less trade dependent than China. is we have a $30 trillion economy. We export about 100.
$150 billion to China. We receive about $435 billion from China every year. They stand far more to lose than we do if this escalates in any way, shape, or form. Jennifer, after the 2018 tariffs, which, as you pointed out, were put in place in response to various forms of cheating, like forced technology transfer and espionage over abundant production, oversupply, Did those tariffs have the impact of reducing those practices on the part of the Chinese? Largely no.
Again, you have to remember what happened after that was a negotiation under what is referred to as the phase one agreement that the Trump administration negotiated with the Chinese. Again, remember, the number one item on that deal was that China was... supposed to buy $200.
billion of additional goods on top of what they had been purchasing before the tariffs went into effect. And then there were a number of series of other commitments that China was to make. A couple of them, I would say, yes, China did make. For example,
They opened up foreign direct investment in their financial services sector to permit 100 percent financial ownership. Again, there were a number of other provisions within that. But did China fundamentally stop the kind of forced transfer of a lot of its technology? which often occurs? No.
Did they completely stop taking our intellectual property? No. Stealing, I mean. I mean, stealing our intellectual property? No, they did not fundamentally stop that. Nor, I would say, did they buy the $200 billion on top of what... they were supposed to buy. So, no. Stephen.
So, you know, the thing that's so interesting about this debate is that I kind of disagree with you, Scott, on the economics, but I totally disagree with you on the issue of what's in America's interest. I'm America first guy. Whatever benefits us, I'm in favor of. And so if you think about the situation, Trump has used tariffs.
incredibly effectively. With Colombia, when Colombia said, we're not taking the migrants back, and Trump said, well, we're going to hit with the tariff, and guess what? They said, we'll take the migrants back. I saw it in the first term. NATO said they weren't going to pay their NATO dues. Trump said, if you don't pay your NATO dues.
We're going to hit you with a tariff. Guess what? They paid their NATO dues. I could go on. Canada said we're not going to help on the fentanyl fight and keeping out illegal immigrants. We said we'll hit them with a tariff. And guess what? A week later, they said we're putting more people at the border. So Trump is flexing. our muscle.
appropriately to advance America's interest. And that's exactly what he is doing with China. He is using this as a tool, as a bargaining chip, to get China to do things that are America's interest in a way that I think will... be quite effective. We're going to take another short break right now. We're debating this question. Was Trump right to increase tariffs on Chinese imports? This is Open to Debate. I'm John Donvan. We'll be right back.
Welcome back to Open to Debate. I'm John Donvan here with Scott Paul, Jennifer Hillman, Stephen Moore, and Rana Mitter. We're in the question and answer portion of the debate right now, and we're looking closer at this question. Was Trump right to increase tariffs on Chinese? imports. Okay, I'm going to go to questions now. Well, Welby Lehman from Walmart, in the ranking of the sources of our national security, where does economic growth And if it's very high, how do you ensure that...
you can pursue policies that take the edge off of economic growth without taking the edge off of national security? Well, economic growth is everything. That's a great question. So we don't want to hurt ourselves in trying to hurt. China. And this is something that makes me uneasy about some of Trump's tariff policies, because tariffs are a tax. But what I'm saying is I think it's worth it. to subtract a little bit of our economic potential be given the giant size of the China threat.
I care deeply about economic growth, which is why I want to reduce our trade deficit, which is one of the biggest drags we have on GDP growth in the United States. We have a trillion-dollar trade deficit. So the more that we can reshore and bring work back to the United States, the more growth we're... going to have. I think actually one of the areas that would do China a lot of good, and it has repeatedly says it will do it and never does do this, is to increase domestic consumption.
If that were to take place, then actually there'd be an awful lot more manufacturing going on in China, which would improve their own economy, but would also force them to open up their own economy. I'm just not sure at the moment that... tariffs are going to be a very good tool to push them in that particular direction. What is a good tool? I would say a combination of...
pushing for genuine free trade, alliance with allies that is very, very solid, and standing up for the values that surround those as well, including democracy. The piece that we have not talked about at all tonight, which is really where the growth is in the US economy and where the growth is... in the world, and that's in services. I mean, all these tariffs, all they are are on goods. The level of sort of goods trade is fundamentally flattening out.
All of the growth that's going to come in the world is going to come in services. It's going to come very heavily in digital services. And again, to me, that is where you see this very much more direct connection between national security and... trade and economic security. My question is about our future and what does this play by President Trump do?
with regard to what are our most important allies, Europe in particular. Look, a lot of the rest of the world shares a lot of the United States' concerns with China. But... What they do not share is the United States' unilateral, rules-breaking tactic. So when we go down this road of unilateral tariffs and disdain for the World Trade Organization, we are effectively pushing away.
all of our allies that we most need to help us if we're going to collectively take on the national security risk that is China. And let me come off the back of that to mention one particular form of manufacturing we haven't mentioned yet, where...
Other countries currently have to rely on China, and that is green energy transition. And it's where the world is going, except probably for the United States in the very near future. Much of the rest of the world is now going to have to be dependent on China because it doesn't look as... if there's going to be a continuation of that particular manufacturing strand. Look, Europe is a declining empire. It's really sad to see what's happening in Europe. Europe has to make a decision.
because we have a clash of the two biggest economies in the world, the United States and China. And Europe too often in just the last 10 years has sided with China against the United States. I mean, how crazy is that, that they would side with the Chinese in these disputes against America when we're the hub of world freedom? China broke the WTO, and so we have no responsibility. to follow it because it is consensus-based, it's broken. And so I agree that it should be tariffs.
plus some investment and some collaboration there. But tariffs are an essential component there because China built up its solar industry at the expense of American efforts and other efforts around the globe. Hi, I'm Stephen Ezel from the Information Technology and Innovation Foundation. One Stephen M., you seem to say that the tariffs are justified because of China's fentanyl for the United States. If that flow dropped to 0% tomorrow, would you argue that the 10%...
tariffs are no longer justified. It's not the only justification, but it certainly would help. I'm not denying that there are all sorts of other factors that underlie the Trump tariffs, but that's certainly... Jennifer, the Biden administration placed 100% tariffs on Chinese electric vehicles, 50% tariffs on legacy semiconductors and lithium-ion batteries.
coming to the United States. Were those tariffs for the Biden administration justified because China was using unfair trade practices in those sectors? And if they were, then why aren't 10 percent blanket tariffs to deal with all the other challenges justified? I have long been of the view that we absolutely should.
be doing tariffs. But again, my criteria is they need to be legal to start with. When you go after a particular sector, then you may have an effective tariff. Again, there's a lot of bells and whistles on some of the specific ones in the Biden administration.
as a general principle, I think that's the right road to go down. Monique Mansour with the MITRE Corporation, are there segments where we don't yet have an industrial base that's fit for mission, pharmaceuticals, for example, if we're unable? to get the medicines that we need for kids with cancer, for other diseases? Does that present a potential near-term existential threat for a component of our community for which the switching costs will take time?
I think we ought to start thinking about decoupling from China, especially when it comes to vital parts of our supply chain. But to me, the number one item on that list is critical minerals. We need critical minerals in order to make a significant number of the components that go into all of our military goods. They're critical to the green technology transition.
We don't have very many of those. We do, too. We have a limited number of mining ability in that area. We have zero capacity to process those minerals. For the vast majority of them, between 90% and 98%. are processed in China.
We have $12 trillion worth of mineral resources. We have more mineral resources than virtually all of the rest of the world combined. The reason we are dependent on all these other countries is the stupidity that we haven't allowed mining in this country for the last 30 years. years. We are so resource rich. Why in the world aren't we mining for these resources? On the decoupling question, would you specifically say that the big American companies have
essentially got to start making tracks at this point to leave China. Is that not going to have a bottom line effect on their profits in the United States and on global prosperity? Scott? Look, they're being pushed out of China too. Xi Jinping and his policies. pushing them out in favor of Chinese national champions, and also the tariffs changing the cost equation. And again, these are very agile, innovative firms. If Apple needs to make things in India instead of China, they will do it.
so. If there's incentives to do it in the United States, they will find a way to do it. The answer is not to say, okay, the status quo is fine. It's to find a solution of that. Part of that is tariff application. Part of that is an industrial policy to bring those processes, that manufacturing to the United States as well. Hi, Dan Mejia with the Associated Press.
I wanted to bring up the Thucydides trap. You know, we talk about national security, but when the U.S. targets China in all these different ways, including the tariffs, I get why we do it, but at some point... it could lead to, like, war because they're not being... quote, respected. The Chinese Communist Party took advantage of the United States and the global company's willingness to seek even higher profit margins. In China, it resulted in trillions of dollars of wealth.
accumulating to them. The fact that we would want to unwind that is not going to compel China to try to enter a global conflict with the United States. I'm Sheridan Prosser. I work for Bloomberg News. What was announced with the 10% tariffs on China was an end to the de minimis exemption. Should there be an end to the de minimis exemption? And if not, why?
Right now, if a package comes into the United States with a value of $800 or less, you do not have to go through the full customs procedures that you would normally do for all other goods. So the fast fashion companies are- fast fashion companies are taking advantage of. And China in particular has really taken advantage of this to the point where the initial announcement was that the de minimis exception would be eliminated. And what happened? Mountains of packages at every post office.
across America. So Trump had to... temporarily rescind until we can beef up the customs authority's ability to process packages. Okay, I'm going to call a wrap on questions. I'm also going to recommend our recent debate on the impact of fast fashion on the economy, which was quite a good one. Thank you for all of your questions. They were all excellent. I really appreciate it. We're going to move on to our closing round.
Scott, you're up first. So you're answering yes to the question, was Trump right to increase tariffs on Chinese imports? You're closing. Great. Thank you, John. Thank you to my fellow debaters. I appreciated the conversation and the questions as well. Once again, ladies and gentlemen, I believe... Trump was absolutely correct in suggesting and imposing a 10% tariff on Chinese products, just as Joe Biden was correct in imposing them on some specific Chinese products.
and in the prior Trump administration as well. for a couple of simple reasons. Number one, we do need desperately to de-risk our supply chains from China for national security reasons. Number two, we do need to defend our manufacturing base. appreciation for the services economy, but you can't mobilize a McDonald's or a Chick-fil-A in a time of national crisis the way that you can mobilize a manufacturing facility or the skilled workforce that comes along with that.
It's simply irreplaceable. And we've got to the point where it's dangerous and bare bones in some critical areas. The third thing is that the tariffs can be effective and aren't going to be. economically damaging to our economy. We have a large $30 trillion economy. We have a minimal amount of tariff on a slim amount of that. And so the overall impact on the PCE... would be negligible, quite honestly. And this would accelerate a trend that's already underway.
among businesses for ABC, Anywhere But China, understanding that Xi Jinping is pushing them out. We need to give them that final shove. Thank you, ladies and gentlemen. Thank you, Scott. Our next closing comes from Jennifer. Jennifer, you, again, are answering no to the question. Was Trump the right to increase tariffs on Chinese imports? OK, so I'm going to start by just saying, look, I agree we have extremely serious problems with China. Again, they're cheating across every number of fronts.
absolutely present these security risks to the United States. The question is whether tariffs are the right tool in order to address it. And my bottom line answer is no, they're not. Why are tariffs not the right answer for me is because they fundamentally represent a unilateral, go-it-alone strategy by the United States that we're going to take on China all by ourselves. And my bottom line is, there is no chance that by ourselves...
using tariffs as our tool that we are going to come anywhere close to addressing the serious issues that we have with China. What we need to do instead is actually work with our allies and our partners. And that, for me, may include bringing everybody together.
to challenge China at the WTO, to say, China, all of your trading practices are a violation of the commitments that you made when you joined the WTO. And this is the many ways in which you're violating it. Because for whatever else it is, China cares about being viewed...
as a country in good standing at the WTO. But you don't stop there. You immediately then go to your G7 allies, to other international organizations, to try to collectively put pressure on China to do a number of things, including
push China to consume more at home. Part of the reason why their goods are flooding the world is because they do not have enough domestic consumption, which would keep a lot of these goods from flooding out. We absolutely need to create clubs among the countries that are willing in things like critical minerals trade and other absolutely strategic products that does not include China.
in those clubs so that we can create strong and resilient supply chains in those goods that are critical to the United States rather than using tariffs to impose this. So my bottom line is simply the tariffs alone and a go-it-alone strategy is asking asking the American consumer to bear all of the brunt of what the world's problems are with China. And that's not fair. Stephen, you're speaking for the last time from the yes side. You're saying that Trump was right.
Well, thank you to open the debate to have this fun debate. And I've learned a lot. I hope you have. And I was thinking what I would say. And I think what I'd say is I pray that you're right and I'm wrong. I do think that we're facing a very serious... threat with respect to the Chinese. And you may be right also that terrorists are not the best way to retaliate against China. And I'm open. I'm all ears. I didn't hear any really great...
solutions to what we're going to do if we don't do terrorists. You know, in the 1930s, we traded and sold steel to the Japanese. And the Japanese then used that steel to kill Americans with the Japanese bombs. We were incredibly short-sighted back then. Let's not be short-sighted again about this real threat that we face. I would love to see...
China move in a less aggressive way, but is anybody paying attention to the way they're building up their military in a very, very hostile and menacing way? What they're doing in the South Sea is very, very dangerous. Taiwan sometime in our lifetime. Again, I hope I'm wrong about that. And so we have to be ready for that. We can't have our eyes closed to this very real threat that China... imposes on us. This gentleman made a really important point. The way we, the ultimate way we win is not
by building up our military even larger, but we do obviously need a military, but through economic growth and prosperity and just grow, grow, grow and grow faster than China. We're killing them in the technology areas. We have, you know, our magnificent seven have more value. Thank you, Stephen. Rana, you get the last word. You're arguing that Trump was not right to increase.
tariffs on Chinese imports. But I am going to argue that our proponents were quite right to come here and give us this excellent debate tonight Let me finish with the last two minutes that I have in trying to answer the question about what solutions there might be if we don't use tariffs. And let me just give you two.
The first one is to go back actually to Jennifer's point about services. Right now, there are two major trading blocks and sets of norms and agreements that have any significance in East Asia, in China's backyard. One is RCEP, the Regional Common Economic Partnership, the Cooperative Economic Partnership, which basically is dominated by China, includes lots of US allies, including Australia, for instance, but does not, of course, include the United States.
Another one is the remnants of the old TPP, the Trans-Pacific Partnership, now the CPTPP. The United States is not in that one either. I'm going to say it should be. And one of the reasons is that when it comes to digital services and the way in which digital norms are going to be decided and create huge amounts of standardization... goods which will then create growth and prosperity into the 2030s and beyond. The United States should be part of those sets of decisions. And right now...
It isn't. The second one actually is, again, the point about manufacturing, and it's about national security, which we all are concerned about here. So I'll give you one word that I think you all know, which is AUKUS, the Australian-UK-United States Agreement on Providing Nuclear...
powered submarines to patrol in the Indo-Pacific. It provides manufacturing capability, it provides new technological innovation, and it provides the chance for three major allies to work together to provide jobs and new defense capability.
That doesn't involve any tariffs. That involves getting together around the table and deciding what our common interests are when we think our values and our ideas are being challenged. But the very last thing I'll say as we finish here is that I come back right at the end to where this debate started. The 10% tariffs that have been placed on China...
are simply not making China pay attention. And for that reason, no other, not because they're necessarily wrong or right in any moral sense, just because they are ineffective, they are not a policy that will get the United States.
and its many allies to the place where they need to be. The United States and China will both be there for a very long time to come, and we have to work out a way in which that can happen without the use of tactics that simply can't be predicted. And that is a wrap on this. debate. I want to say how much we enjoy partnering with the council and to our four debaters, Scott and Steve and Jennifer and Rana, we really, really appreciate what you did here tonight.
And a big thank you to you, our audience, for tuning into this episode of Open to Debate. Thank you so much for listening. You know, as a nonprofit working to combat extreme polarization through what you just experienced, civil debate, our work is made possible by listeners like you.
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