Free Traders Lose the Narrative

The narrative on free trade as changed from the extreme "it's always good; trade partners only cheat themselves by using protectionism measures." Where it ends is anyone's guess, but a "fair trade" (reciprocity) consensus is building.

Barron's: The People’s Republic of Protectionism

By 2025, China aims to produce 80% of its “new energy vehicles,” 70% of its medical devices, 70% of its industrial robots, 60% of its advanced tractors and harvesters, and 10% of its commercial aircraft. The targeted sectors represent the bulk of U.S. manufacturing exports to China. While these targets are directly opposed to the spirit of an open international order, the Chinese government should have little trouble achieving its goals within the confines of World Trade Organization rules. China has plenty of experience with import substitution.

The first step is to “digest”—the Chinese government’s term—advanced foreign technology. Sometimes the know-how is explicitly traded for market access, sometimes it is acquired through mergers and acquisitions, and sometimes it is stolen.