DAVID GREENE, HOST:
So the Trump administration is expected to announce new tariffs today, tariffs aimed squarely at China. They would target technology. This move, of course, follows the steel and aluminum tariffs that the White House imposed a few weeks ago. And it could affect tens of billions of dollars of trade between the U.S. and China. Joining us now is Rufus Yerxa. He's the president of the National Foreign Trade Council. He also served as deputy director general of the World Trade Organization. He's in our studio in Washington.
Welcome.
RUFUS YERXA: Good morning, David.
GREENE: So the U.S. government has been complaining for years - right? - about China being a bad actor - among other things, forcing U.S. companies doing business there to hand over key technology. So could this move - could these tariffs change China's behavior?
YERXA: Well, yes, you're right. We have been complaining for years, and China really hasn't responded. And so, you know, if you view it from the big U.S. businesses, the technology businesses that are being affected by this in China, it's a real problem. And it deserves an answer. I think the problem is that - premature imposition of tariffs on a number of consumer products coming from China before we've really outlined for China the exact steps we want them to take and had a period of negotiation with them and before we had a chance to sort of rally our other trading partners who - many of whom feel the same way about China to our side is going to be fairly ineffective in getting China to change. It could lead to retaliation and a widening of the trade conflicts between us without really getting China to address the problem.
GREENE: Well, I want to ask about the implications. But first, I mean, what you're suggesting - more negotiating, bringing trading partners on board, going through the list of demands for China - can't you argue that that is what has been going on and it hasn't changed China's behavior and so what the president is doing is saying enough is enough, this can't go on, the United States needs to do something bold and do something now?
YERXA: Well, first of all, if we're going to do something bold, we need allies. And, you know, most of the steps the Trump administration has taken since coming into office on trade haven't really helped to build that alliance against China. I mean, we pulled out of TPP, which would have created a much greater sort of collective sense of pressure on China from its Asian partners. We threatened to pull out of a lot of our other free-trade agreements. We then slapped tariffs on steel and aluminum, which has, of course, irritated a number of other trading partners.
So we aren't really building the kind of effective global pressure on China that's going to be needed. Actually, the Europeans, the Japanese and others want to be part of that effort and are willing to. But, you know, there's a big risk that using tariffs in this very, very hasty fashion is actually going to create more sympathy for China than pressure on them. And that's our big concern. You know, the Trump administration...
GREENE: Oh, they'll find more allies, and the U.S. will see fewer allies.
YERXA: Yeah. And, in fact, when they start retaliating against us, many of our allies might because they're irritated with us about things we're doing to them. They might say, well, you know, if the Chinese are going to take action against U.S. companies, you know, Japanese, Korean, European companies come in and say, well, do business with us. So it could actually, you know, have a perverse effect of making it harder for U.S. companies to do business in China, rather than easier.
GREENE: You said something on our air a few weeks ago that really caught my ear. You said that as these trade tensions increase, U.S. trading partners are learning more about our electoral college. So as you think about how China might respond, are you saying that they might micro-target? I mean, they could go after - what? - places where there are a lot of Trump voters?
YERXA: Well, they're certainly going to target major U.S. exports or investments, and many of those are in areas like the Farm Belt. You know, we export a lot of soybeans and pork and other things to China. That's one big concern. And certainly the agriculture community's concerned about it. There are other possible targets as well.
I think the big thing is we would urge the Trump administration to use the threat of future action not only on trade but on investment because a lot of these Chinese practices really need to be addressed. They go to critical technologies. And they, you know, for example, the latest - the Broadcom-Qualcomm merger, I think there was a basis for turning that down. But we think there needs to be a clearer strategy and a stronger effort to get the rest of the world on our side if we're going to take the Chinese on and deal with these practices.
GREENE: Rufus Yerxa is president of the National Foreign Trade Council. He also served as deputy director general of the World Trade Organization. Thanks so much for coming in this morning.
YERXA: My pleasure.
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