Trade Tariffs: The Next Generation

This week the authorities responsible for public safety in Washington, D.C. have been on high alert. No one wants a repeat performance of last year’s Seattle protests, looting, and vandalism. At issue is a difficult-to-understand, but powerful, fear of “globalization.”

The dominant thread in the protests against globalization is America’s international trade relationships. Next month, Congress is expected to vote on legislation to make our trade relationship with China normal – to make it match our relationship with other countries.

Normal trade status would have a direct and positive effect on the high tech sector of our economy. Tariffs would be put on a level playing field for telecommunications equipment. American consumers who purchase telecommunications equipment simply pay for the products. However, Chinese consumers who buy American-made telecommunications equipment pay a tariff – an unnecessary and unfair tax – on top of the price of the product, which makes it difficult for American companies to sell their products in China.

Critics maintain that China has a history of eliminating tariffs only after they are no longer needed to keep American products out, because either the product is obsolete or there is a superior Chinese product available.

However, every trade barrier and tariff removed on a type of product – like telecommunications equipment – is a trade barrier and tariff that will no longer harm the next generation of American-made products. Normal trade relations would work to remove tariffs and trade barriers when they are a real threat, not after the fact.

Continued growth demands new ideas and the innovation of new products. American high-tech workers excel in this respect. It is only sensible that a high rate of growth also demands a larger marketplace for these new ideas and new products. There is little doubt that China is the largest marketplace on Earth. Let’s hope that Members of Congress understand that it is time to eliminate barriers to trade and tariffs on American-made high-tech products.