Growth is painful, but Lindsey Graham is absolutely correct…
Recently on CBS’s “Face the Nation,” Sen. Lindsay Graham (R-SC) asked Americans to “accept the pain that comes with standing up to China.”
Partial transcript as follows:
MARGARET BRENNAN: Well, I- I want to know what you think about what Larry just described there. He said the president does have the authority to block private investment in China. You said the other day you don’t–
GRAHAM: Well I don’t- I don’t–
BRENNAN: –think he does.
GRAHAM: — know how the statute works. I think he can levy tariffs on countries that he- that- that are creating a national security threat to us. Maybe he can, you know, do something about exporting to countries that he believes are national security danger. I don’t know. But if you start getting into that, it’s a global economy. The one thing- I love Larry Kudlow. It’s a global economy. I’m glad American companies are in China doing business because there’s a lot of customers. What I don’t like is they close off markets to the American business community in China. They require you to have a Chinese business partner when you do business in China and they steal all of your stuff. Every Democrat and every Republican of note has said China cheats. The Democrats for years have been claiming that China should be stood up to. Now Trump is and we just got to accept the pain that comes with standing up to China. How do you get China to change without creating some pain on them and us? I don’t know.
BRENNAN: How much pain should people of South Carolina be prepared for?
GRAHAM: Some. Consumer prices on commodities are gonna go up. We’re now that part in the trade war where you feel price increases at Walmart. The president has backed off because he’s worried about the Christmas shopping season. I’d tell you, Mr. President, listen, you got more bullets than they do. They sell us a lot more stuff than we sell them and the goal is get them to change their behavior. The Chinese government, the Chinese army and the Chinese business community are one in the same. They’re very mercantile. You don’t have these disputes among democracies, but the Chinese Communist Party runs everything in China. Until they feel the pain, they’re not going to stop. They- they need to change their intellectual property theft practices. They need to open up their markets to us. They need to become a reliable trading partner rather than a mercantile system that cheats everybody out of market share.
BRENNAN: And they- a lot of people, as you say, support the president in that China hasn’t agreed to do those things–
BRENNAN: — up to this point–
GRAHAM: And they never will until they pay a heavier price.
BRENNAN: So, you think possibly not until after the election–
GRAHAM: I think–
BRENNAN: –of 2020?
GRAHAM: –they’re trying to wait Trump out. I think they’ve made a calculation that our elections are right around the corner. They can play this game to 2020. If Trump keeps piling on, I don’t know if they can make it that long because the supply chain is beginning to move. The more expensive it create- you to produce products in China, the more likely you are to relocate the supply chain which would be a death blow to the Chinese economy.
BRENNAN: That’s been happening for- for some time but do you, because South Carolina has so many auto plants in particular–
GRAHAM: Steel and aluminum tariffs hurt us a lot. But, you know, the steel and aluminum business has a chance of coming back. China produced more steel in one year than the entire world consumed. That’s an unfair trade practice. They should be in the WTO as a developed nation not a developing nation. Everybody- I had a bill with Chuck Schumer seven or eight years ago to label China a currency manipulator and to put a 27 and a half percent tariff on every product that benefited from currency manipulation. Bush would never do it. Obama would never do it. Trump did it. So to my Democratic colleagues, he’s doing the things you’ve been calling for all these years.
BRENNAN: What about the threat of tariffs and this dispute with the E.U. that could really impact the automakers?
GRAHAM: I think tariffs are tools. When you look at the world tariff regime, 67 percent of all the tariffs in the world disadvantage America. There’s a higher tariff on American products in the country in which we do business with. India’s the worst. I’ve been introduced a bill that allows the American president to charge the same as the country we’re doing business with changes- charges. So like in India.
GRAHAM: They have a 100 percent tariff on a lot of our products. Either we increase tariffs on Indian products or we all go to zero. The goal is to go to zero.