Here’s how Democratic presidential contenders would negotiate China trade
China’s President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017.
Nicolas Asfouri | AFP | Getty Images
With trade negotiations between the U.S. and China stalled and an escalating trade war threatening global markets, President Donald Trump has said that the Chinese are “DREAMING” that he will be defeated by a Democrat in 2020.
But Democrats have not said much about their own plans for negotiating with the Chinese. To learn more, CNBC asked the 21 top Democrats running for president about their views.
We asked them what they believe is working under Trump — and what they would change. We also asked whether human rights issues in China, where the U.S. has said more than a million Muslims are held in concentration camps, should be part of any trade deal. Lastly, we asked about what they would do about China’s efforts to tighten its military grip on the South China Sea, where more than $3 trillion of trade passes annually.
Below, unedited, are our questions and the answers we received from the seven Democrats who responded. Those Democrats are Sen. Bernie Sanders, I-Vt., Rep. Eric Swalwell, D-Calif., Rep. Tim Ryan, D-Ohio, former Maryland Rep. John Delaney, Rep. Seth Moulton, D-Mass., Miramar, Florida, Mayor Wayne Messam and spiritual coach Marianne Williamson.
Two other Democrats provided partial responses.
A spokesperson for Sen. Michael Bennet, D-Colo., provided an excerpt from the senator’s platform that is included as a response to the first question.
An aide to Texas Rep. Beto O’Rourke wrote in a statement: “Holding China accountable should not come at the expense of American workers. That is why we must not settle for any deal that does not respect intellectual property, level the playing field in the Chinese market, nor end unfair trade practices. We must advance progress based on shared interests and core democratic values.”
Joe Biden, the Democratic front runner, did not respond to CNBC’s survey as of publication time but has dismissed China’s economic competitiveness while on the campaign trail, earning some criticism from his fellow contenders.
“China is going to eat our lunch? Come on, man,” Biden told a crowd in Iowa earlier this month. He described himself as a “fair trader” and said he has been “arguing for a long time that we should treat other countries the way in which they treat us, which is, particularly as it relates to China: If they want to trade here, they’re going to be under the same rules.”
CNBC provided the questions to each campaign on May 6.
What do you think is the best approach to addressing China’s practices with regard to intellectual property theft, technology transfer, industrial subsidies and other matters in which the two countries are at odds? Is it through multinational organizations like the World Trade Organization and the United Nations? Will you take any action unilaterally? If so, what action?
Sanders: It is in the interests of the United States to work to strengthen institutions like the WTO and the UN rather than trying to go it alone. American concerns about China’s technology practices are shared in Europe and across the Asia-Pacific. We can place far more pressure on China to change its policies if we work together with the broader international community and the other developed economies. International institutions also offer China a template for reforming its own internal intellectual property and industrial practices.
Swalwell: I’m a member of the House Permanent Select Committee on Intelligence, as well as of the Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, so I’ve seen first-hand the economic espionage that China commits and the adverse impact it has on American businesses. China has not been forthright in even admitting that intellectual property theft and technology transfer occurs. Nor is China transparent on its industrial subsidies. Curbing China’s dishonest practices must be a part of any negotiation; as president, I would hold China accountable.
On the intellectual property theft, we know that much of the IP theft is state-backed. In order to combat this we must take a multi-pronged approach — both defensive and offensive. We must have a strong enforcement mechanism with which to hold China accountable for their actions and continue to impose penalties when theft occurs. China has made promises to institute reforms of their policies governing IP rights, technology transfers and cyber-theft of trade secrets in the past but we know these are not being imposed.
The legal and diplomatic approaches have not been completely effective, it is critical that we implement other actions such as developing early warning systems, particularly when it comes to the stealing of defense technology. This can be done through private-public partnerships. We must also be ready to take counter action when a theft is detected.
It is vital that we continue to have a multinational approach to addressing these issues. We can’t go it alone; we must involve allies — and other victims of China’s practices — such as Japan, South Korea, Australia and New Zealand.
While the U.S. does not have to go through the World Trade Organization and can invoke Section 301 if they are to impose tariffs against China (even though it still has to file a simultaneous complaint with the WTO), the WTO can still be a useful partner. In fact, the WTO has an obligation to enforce the rules they have set up, otherwise it is left to the United States to impose punishment. We should hold the WTO to its obligation.
It is also important that U.S. companies acknowledge when theft is occurring by China. In the past, companies have not wanted to impinge on their business with China so they’ve turned a blind eye. I would ensure that reporting this theft it is a win-win for American companies through fair trade practices.
Lastly, government departments must coordinate with each other and with U.S. companies. The departments of Commerce and the Treasury, the U.S. Trade Representative and the U.S. State Department must all be aligned to tackle the problem of IP property theft in coordination with the private sector.
I would continue to make sure the Justice Department brings criminal cases against the companies that violate trade agreements and steal our trade secrets and intellectual property. I would boost our Trade Representative’s investigation of China’s activities by adding more staff and funding.
Ryan: When it comes to China stealing intellectual property from the United States, there is no doubt that multinational organizations need to play a part in holding them accountable. These actions are a serious national security and economic risk for the United States. At the same time, I think our government must take further action when it comes to creating safeguards against China’s actions. That is why I have cosponsored legislation the Fair Trade with China Enforcement Act, which would hold China accountable and create necessary regulations when it comes to trade with China, including prohibiting the sale of national security sensitive technology and intellectual property to China.
Delaney: China has acted like pirates, stealing intellectual property, building illegal islands, and not playing by the rules. I will build a broad coalition of U.S. allies and have a unified front against China (this will involve working with multinational organizations but also doing a lot more), I will unify our business community against these practices by preventing them from depositing intellectual property funded by taxpayers into joint ventures with China, and I will re-enter the TPP to compete with China. We can hold China accountable and have a productive relationship with them.
Moulton: These options aren’t mutually exclusive. We should address cybersecurity and intellectual property theft issues directly with China and use the WTO to negotiate trade disputes and establish clear enforcement mechanisms.
Protecting our international property is a national security issue, and we need to build a cyberwall to protect against Chinese and Russian attacks. We should start by strengthening the Cyber Threat Intelligence Integration Center created under President Obama and improve the information-sharing between the private sector and government on cyber threats.
As we press China on trade and intellectual property theft, we need to demonstrate our resolve in ways that actually help American workers. Donald Trump has shown he knows nothing about trade. An initial analysis of the net effect of the tariffs is that they are costing the United States economy $1.4 billion a month, and the cost of the tariffs is being passed on to U.S. farmers, companies, and consumers.
The United States led the 15 years of negotiations that enabled China to join the WTO and we should reap the benefits of that successful diplomatic effort. Our negotiators secured unprecedented changes to China’s economic and trade policies as conditions for membership, including requiring a dramatic opening of China’s telecom, banking, and insurance sectors, along with the lowering of tariffs on key agricultural products to almost zero. The point is: WTO leverage works. China’s membership in the WTO has been a huge boon to the United States, with U.S. exports to China increasing by 500 percent and agricultural exports increasing by 1000 percent since China joined the organization. Going forward, the WTO should absolutely be involved in establishing trust in trade negotiations and in providing the mechanisms for the enforcement of trade agreements.
Bennet: Instead of slapping tariffs on our allies and perpetrating a trade war, Michael believes we need to do the hard work of building coalitions to counter Chinese predatory economic practices, like intellectual property theft and economic espionage, that harm American workers, businesses, farmers, and ranchers.
In order to compete with and counter an increasingly authoritarian China, Michael believes we must reinvest in our alliances, champion democratic values like the rule of law and human rights, and sharpen our efforts to combat technology threats that undermine U.S. economic and national security.
Messam: The strained trade relations between the U.S. and China is a complex issue that should be confronted with a measured and sober disposition. The combined approach of multinational organizations and unilateral action should be leveraged to protect intellectual property, technology assets, and trade secrets. Before engaging trade wars that could have detrimental impacts to American businesses and our economy, we must seek to solve our trade differences diplomatically. Where multinational organization negotiations don’t work, I would seek specific and direct trade remedies not limited to:
• blockade on imports of stolen intellectual property
Williamson: The United States Intellectual Property is some of the most valued in the world. According to the USTR, by stealing our intellectual property, China costs American businesses between $225 billion and $600 billion annually. We must use all tools at our disposal to ensure China respects intellectual property law. This will include working with and leveraging the power of the international community to make certain that China engages in fair trade.
The U.S. government must also enlist the help and cooperation from American businesses to help solve this problem. Increased internal controls, more robust screening and standardized best practices will make it more difficult for Chinese agents to operate. Many opportunities are a matter of simple theft. More diligence will help curb crimes of opportunity.
Lastly, a firm no nonsense stance against China on every front will be necessary to send a clear message that these practices won’t be tolerated.
Should a trade deal with China address human rights issues? If not, will your administration address human rights in China and, if so, how?
Sanders: Yes. Labor protections are very weak in China, and the rights of workers are an essential component of human rights. The Trump administration has proven itself indifferent to labor rights, and apparently would prefer that American workers are reduced to the position of Chinese workers, rather than that labor everywhere enjoy basic protections and strong standard of living. The Trump administration has also done nothing to pressure China over its abhorrent treatment of the Uighur and Tibetan peoples. Future trade negotiations should, for example, target American corporations that contribute surveillance technologies that enable China’s authoritarian practices.
Swalwell: Yes, a trade deal must have a component to address human rights activity. We must be a model for the world and call out countries such as China that violate human rights.
Ryan: Yes. As the United States negotiates any future trade deal with China, we must address the human rights violations. The actions we have seen from the Chinese government when it comes to the inhumane treatment of the ethnic minorities is inexcusable. And no future trade agreement can ignore these violations.
Delaney: Human rights are a priority to the Delaney Administration.
Moulton: Yes. Labor protections and human rights issues have long been part of U.S. trade agreements. These protections are critical. Enforceable labor protections and human rights standards not only improve the lives of people overseas, they protect jobs at home by leveling the playing field with American workers. During negotiations on the Trans-Pacific Partnership, the Obama administration compelled Vietnam to reform its labor rights to meet international standards on freedom of association and collective bargaining.
Unfortunately, Donald Trump seems dedicated to undermining our traditional leadership role on human rights by withdrawing from the UN Human Rights Council. America needs to lead on human rights again.
Williamson: The United States, just a few years ago, stood for human rights, even if we fell short, we worked to do better as a people. That commitment has been eroded, as we place short term profits over our rights and leadership to create a more perfect union. The United States should retain the mantle of the top human rights defender in the world. This means cleaning up its own house but also demanding that other countries adhere to the value of basic human dignity and human rights protection. The U.S. should use all tools at its disposal, whether it’s trade deals or diplomatic envoys, to promote and protect human rights in the world.
It is essential that we work with all of our foreign trade partners to ensure that all guarantee human rights for people across the globe. In the case of China, we should leverage our own trade power working alongside all of our allies to promote human rights when discussing trade.
What do you see in America’s current policy approach to China that is working? What is the single most important thing you will change? Who will benefit from your plan and how?
Sanders: While China has adopted some better practices, it still has a long way to go. The Trump administration is correct to put pressure on China to reform its practices, and I hope that some good comes from current trade negotiations. The economic relationship between the United States and China has been the engine of global growth for the past 25 years, and we should acknowledge that in China it has lifted hundreds of millions of people out of poverty. In both China and the United States, however, the benefits of this growth have not been shared equally, and have accrued in a very disproportionate way to the very wealthiest. The problem is that the Trump administration is mainly interested in addressing some of the imbalances between America and China overall, when it also needs to address basic drivers of economic inequality. The future of this relationship requires both a degree of pressure on China, and reform of the economy inside the United States itself.
Swalwell: I don’t think an all-out trade war with China is to our benefit. However, imposing targeted tariffs against China is a tactic that works to ensure fair trade. America wins when we have fair trade deals. Trump’s negotiating tactics have and continue to undermine any long-term deal that could be reach with China.
Again, in striking a deal we must work with our allies who share our concerns including Japan, South Korea, Australia and New Zealand. It is important that our allies hold up their end of any bargain and stand up to China when it comes to unfair trade practices.
I will negotiate a trade deal with China that’s globally beneficial for both countries but includes accountability. While the carrot and the stick approach might work in the short term, we must strike a long-term deal with China to reduce our trade deficit and provide a level playing for the future, including getting China to gradually open up their markets.
Ryan: The ad hoc approach to trade with China by the Trump administration has created an economic policy that has hurt many American industries while creating an unlevel playing field for our American workers. For too long China has succeeded in hurting America’s manufacturing industry by engaging in illegal steel and aluminum dumping. That is why I support targeted tariffs against China’s steel and aluminum.
However, the lack of strategy has created a reactionary trade policy that helps no one, and we cannot negotiate trade through tweets. I have been a long time supporter of taking action against currency manipulation, and leading legislation that would impose countervailing duties to offset the impact of manipulation. As president, I will prioritize America’s workers and industry – manufacturing, agriculture, and artificial intelligence.
Delaney: Our current policy is overly focused on the trade deficit, which is important, but not as significant as intellectual property issues. It also favors a “go it alone approach” – which is wrong. We should work with our allies. Our current policy is hurting our farmers; I will help farmers by entering TPP.
Moulton: First, we need to recognize that China poses an economic and security threat to the United States right now based on their cyberattacks and intellectual property theft. China will also be the largest near-peer competitor to the United States for the foreseeable future, so it is critical that we are willing and able to confront China and win. It is obvious that Donald Trump’s trade war with China isn’t the answer. It is hurting American farmers while China continues to steal American jobs every day through the internet with their cyberattacks designed to take America’s innovative ideas and military secrets. To confront China, we need to build a cyberwall to ensure that we can protect our intellectual property; negotiate a trade deal with our allies and partners in the region with strong labor and environmental protections that will deepen and strengthen our economic foothold across the Pacific; effectively use all of our diplomatic and economic levers to force China’s compliance with their trade and legal commitments; and finally we need to make significant government investments in next-generation technologies like artificial intelligence, quantum computing, and green technology. Winning the competition with China means the next generation of technology will be designed and built in America, then sold to China and the rest of the world.
That said, China has shown that they are capable of acting responsibly on the world stage, especially when the United States demonstrates real leadership. China is a party to the Iran nuclear deal that provides clear incentives to block Iran’s path to a nuclear weapon. China also agreed to strict steps to address climate change as part of the Paris Agreement. China has also taken on a leadership role in addressing environmental issues at the UN, filling the leadership void left by the Trump Administration on addressing climate change. A constructive dialogue with China on security and environmental issues, while competing and winning on innovation and cybersecurity would have huge benefits for American workers, the entire U.S. economy, and on Asia-Pacific security.
What do you see in America’s current policy approach to China that is working?
· Negotiations for wider access for western firms.
· Structural reforms to stop the Chinese government’s use of distortive regulations, subsidies, and JVs that force technology transfers and otherwise rig competition for the benefit of preferred, often state-owned or controlled businesses.
What is the single most important thing you will change?
· Strong labor and environmental standards and enforcement of those laws and standards would be a high priority.
Who will benefit from your plan and how?
· American Workers would benefit because American workers have suffered due to the lack of global labor and environmental standards not protecting international workers, putting American labor at a disadvantage where our domestic standards are not reciprocated internationally.
Williamson: The current administration’s purported desire to rein in terrible trade deals is a good goal. Standing up for the United States over trading partners who are acting in less than honorable ways is, on the surface, what a president should do. However, the combination of attempted bullying, erratic behavior and especially tariffs is highly counter-productive. We need to end the trade war which was started by an administration which was creating enemies to blame for our problems. This trade war has been hurting U.S. consumers with excess costs for goods and hurting U.S. farmers by making our agricultural exports less competitive and eliminating the Chinese market.
What will you do about China’s efforts to tighten its military grip on the South China Sea, where more than $3 trillion of trade passes annually?
Sanders: The U.S. has a role to play in supporting bilateral and multilateral diplomacy between China and others in the region to deescalate and handle disputes. The best policy in both the near and long term is to strengthen international institutions, in this case the United Nations Convention of the Law of the Sea (UNCLOS). The United States should press China to abide by internationally agreed guidelines for managing maritime issues, in no small part by ratifying UNCLOS itself.
Swalwell: China has been slowly widening its military buildup and constructing island for military use. It is time that the U.S. lead in a more direct way. While we have been urging other allies to increase their presence in the area to help keep the waterways open, we have not yet formed a formal coalition with other countries including Australia, France, Japan, and England and the Philippines and Vietnam. My administration can lead these countries in joint exercises and other coalition-building activities, sending a clear signal to China that these countries will defend their rights to navigate the South China Sea.
Further, China must be held accountable in the eyes of the world. I would put the South China Sea at the top of an international agenda, so that the world becomes aware of China’s ruthless policies in this area. We should stand up for our friends in Southeast Asia. The more countries that are aware, the more heat China will feel both diplomatically and economically.
Ryan: The actions of China in the South China Sea is extremely concerning, and the militarization of the area is a national and economic threat to the United States. The actions by China combined with a lack of a comprehensive defense strategy by the United States continues to put the global trade that utilizes the waterway in jeopardy. We should make every effort to bolster our allies and other strategic partners in the region and strengthen their efforts to oppose China’s militarization of the South China Sea.
Delaney: We need to maintain our significant military presence in the Asia-Pacific region, invest heavily in the technology-based offensive and defensive weapons of the future, and work with our allies on initiatives like TPP.
Moulton: The most important thing that we can do is support our allies in the region. By failing to stand with our allies, Donald Trump is inviting countries like Russia and China to test our resolve. When I was in the Marines, we had a motto for our division: “No Better Friend, No Worse Enemy.” When China understands that we are committed to the region and the free navigation of the South China Sea, then we can work together to resolve disputes and ensure that trade is not disrupted. China has a huge economic stake in maintaining freedom of navigation in the South China Sea, but we need to have a president capable and willing to defend the United States and our interests in the region. I believe that we should be building a “Pacific NATO” to contain China and North Korea by formalizing and strengthening our security relationships with our allies in the region. In other words, exactly the opposite of what Donald Trump has done by cancelling our military exercises with South Korea and cutting our allies out of the negotiations with North Korea over its nuclear weapons program.
Williamson: Cooperation is key. When a country acts aggressively and in a manner that is not in our interest or the interest of peace in a region, the first place to start and hopefully end is working with allies to create a climate of peace. In the South China Sea, the best way to curb China’s expansion is to continue to strongly support our strategic and trade partners in the area and to engage the international community to assist in our efforts to prevent this expansion.