Chinese Food Fight

When I was in grade school, every once in a while when the cafeteria served some god-awful-healthy-concoction-a-la-Michelle-Obama-vegetable, the offending salad or vegetable would inevitable end up flying across the cafeteria. In short order, all sorts of food would go flying, even good stuff that I would prefer to eat.
Such is the state of affairs with foreign trade with Communist China. Take a deep breath, put down the Brussel Sprout, and take a swig from your milk carton.

25% Tariff?
When considering foreign trade with China, some have advocated a punitive tariff, say 25%, on all imported Chinese goods. This impulse is certainly understandable, but displays a disappointing lack of understanding regarding international trade. Any random tariff imposed by the US is sure to run afoul of international trade agreements. Any such action is sure to spark a trade war, and the American consumer (who can buy t-shirts at Walmart made-in-red-china for 3 for $10 rather than $15 each with a label that proudly proclaims 'made with pride in the US with union labor') is sure to be the loser.

Renimbi
(there is no such thing as the 'Yuan'). To my knowledge, there are no laws regarding the manipulation of currencies, and that really is the heart and soul of the trade problem with Red China. They have kept the value of their currency at artificially low levels to give them a successuful leg-up on international trade.
Now, you are talking: a currency war against the Renimbi is totally fair game. Congress could declare currency war against Red China: they could direct the Fed to buy up every Renimbi they can get their hands on, running the printing presses 24x7 and flooding the world with cheap $$$ if need be. When the Renimbi is literally unavailable, since the Fed has ALL of them, this would surely force the value to go up. Red China counters by issuing more Renimbi? No problem: the Fed will just run the printing presses that much faster. This would be a war that Red China cannot possibly win.

The World's Biggest Polluters
Chinese Industrialists think nothing of poisining the air, water, industrial workers, not to mention the ordinary citizen. The most polluted places on earth are all in the Peoples' Republic of China.

Software Piracy
China sports 100's millions of copies of Microsoft Windows. Problem: they are all pirated copies, and Bill Gates and company has never received a nickel from the Peoples' Republic. Ditto for American music CD's and movie DVD's. They simply copy it, and deny American companies billions of dollars that they are legitimately due. But the Chinese do not care. Hey, it is free and those Yankees cannot do a thing about it. They do not respect American copyright or patent laws.

Financial Fraud
Any company that wishes to list itself on American stock exchanges has to go through a daunting array of hurdles and tests before they can offer an IPO: they have to be purer than the Pope. Chinese companies, true to their character, have found a way to cheat on the process (some sort of reverse osmosis bullsh*t, I dunno, I am not a CFA). Many, if not most, have proven to be frauds that soon collapse to zero value.

They Cheat and Lie
Chinese industrialists think nothing about cheating. They deliberately adulterate children's formula and pet food with toxic chemicals that causes illness and perhaps death to anyone, human or animal, that consume the contaminated food stuff.

Intellectual Property Theft
Any major American MNC (multi-national corporation) simply cannot set up shop in China. It must be a co-venture with a domestic Chinese company. A technology 'sharing' agreement is the sine qua non of all such ventures. Any company that does business in Communist China automatically agrees to give away industrial and commercial secrets. This is simply the Chinese way of doing business.

Industrial Espionage
If you will recall, Chinese ballistic missiles were an aerospace joke for decades. They unfailing exploded on the launch pad. Then, suddenly, they were able to test fire one that could reach at least Hawaii. How come? Because they stole secrets about launch vehicles from Loral Space, an American company that regularly launches satellites into orbit.
Sinovel, a Chineses company that bought electricity-making windmills from American Super Conductor, suddenly refused to pay her bills and reneged on purchasing contracts. Why? Because they had gotten hold of secret industrial computer codes that would enable them to make their own electricity-producing windmills.

Americans Do Not Really Have a Right to Do Business in China
This may surprise you, but the legal basis on which foreign countries can do business in China is in a legal gray area. They do not have the right, per se, to own property or business or whatever. This sure seems to be the perfect setup to simply pull the rug out from under any targeted American business doing business in China (say, GM or KFC) and simply nationalize the whole kit and kaboodle, and it would be totally legal under Chinese law: all it would take is an affirmative vote by the Chinese Politburo.

Then Why Not Simply Prohibit Trade With China?
Because Red China represents a billion middle class consumers that American companies are drooling over, and no way are they going to allow trivial things like fairness or truth to get in the way.

Final Word
As you can now see, the litany of legitimate complaints we have against Red China is long and difficult. It is hard to see what good a punitive tariff will do, except to raise the costs to consumers on a budget who depend on cheap Chinese imports to make ends meet at the end of the month.