(iStockphoto/AvigatorPhotographer)Recently there has been talk, but no action, about eliminating some or all of the tariffs on Chinese imports that were instituted by the Trump administration.
The debate involves salient arguments on both sides. It is part of a much broader set of issues on which the two countries have managed to alienate each other. It includes everything from blame about COVID-19 to suppression of minorities in China to the US policy toward Taiwan and “One China” to military action in waters adjacent to China to support for Russia in its campaign against Ukraine. That’s a pretty long list for the world’s two largest economies, which are connected by some of the busiest trade routes.
If the situation were a business analogy, it would be as if a company not only competed intensely with both its important suppliers and customers, but also took steps to alienate itself from them, potentially putting them out of business. You might regard that as bordering on the insane.
The matter has caught the attention of no less an observer than Henry Kissinger, who commented recently to Bloomberg News Editor-in-Chief John Micklethwait that current and recent US administrations, “have been too much influenced by the domestic aspects of the view of China.” Kissinger urged global leaders to recognize “the importance of understanding the permanence of China.” Anyone who has spent time in mainland China, Hong Kong, and Taiwan would have no trouble recognizing the “permanence of China.”
"It’s perhaps evidence that sanity still prevails in the business world."
Before proceeding, I should insert a disclaimer. I was a member of a group of about a hundred faculty members called the Committee for Alternatives at the Ohio State University in the 1960s. Our mission was to stimulate debate about important issues in a community whose media were controlled at the time by one family with one point of view. It got me on a list prepared by an alumnus (and ignored by the person to whom he sent it, the President of OSU) of people unqualified to teach at the university. Supporting evidence, among other things, were signed ads we ran that featured information and opinions on a variety of issues. One that caught his eye in particular was a column titled “Trade with Red China” that highlighted the pros and cons of any trade between the US and China.
Throughout the current controversies, trade continues. It’s perhaps evidence that sanity still prevails in the business world. But it raises the question of whether it’s time for the US to send a message, however small, of positive intent toward China by prioritizing negotiations that would eliminate tariffs on goods purchased and sold between the two countries. Could it be defended at home as a step toward curbing inflation in the US? Maybe, although economists have told us that the effects would be small. How much of it would actually trickle down to consumers?
The primary opposition to such a move appears to be American labor unions. Others argue about the importance of maintaining national security. Could they be persuaded to support such a move if the US government invested in American industries at the same time, perhaps similarly to Congress’s recent decision to fund further development of the US computer chip industry?
There would be complaints from US manufacturers protected by current tariffs. But reliance on tariffs for protection is a questionable strategy for long-term success. In the US, we have been notoriously unsuccessful in restoring manufacturing jobs in basic industries because it defies a basic lesson in comparative advantage that we learned years ago in Economics 101. Would elimination of tariffs on Chinese product, much of it better suited for production in China, make at least a small contribution to the needed restructuring of American industry?
Is it time to consider lifting tariffs on Chinese imports? What do you think?
Share your thoughts in the comments below.
References:
Henry Kissinger, Leadership: Six Studies in World Strategy (Penguin Press, 2022)
- Courtney McBride, “Kissinger Warns Biden Against Endless Confrontation With China,” Bloomberg News, July 19, 2022.
Your feedback to last month’s column
Does Religious Belief Affect Organizational Performance?
We would like to think that religious belief does affect organizational performance. Deb Wiesner expressed this feeling in an email response to the column: “I absolutely believe that when you put your faith into your work, realizing you are serving something bigger than yourself, your employer, peers, etc. that shows in your work and can positively impact others.
Brian Thatcher said, “I am for maximizing both profitability and human capital to support flourishing within the company and its community. Katherine Lawrence added, “Chinese thought stresses harmony and manners and the greater good of the group. As managers, it is in our interest that this be the case.”
There is a complex and extended set of relationships that determine the impact of religious belief on organizational performance. And the question was raised about whether the research cited in the article (centered around Confucianism) fully addressed the issue. Grace Woo commented, “I don’t see Confucianism as religion … viewing that as ancient wisdom increases the possibility of being accepted by a Christian, a Muslim, or an atheist … I wonder if the discussion could be more broadly framed as ‘Can ancient wisdom be used to influence organization values?’” Bill Fotsch commented, “… I suggest the driver is not religion, but rather morality. Morality has been shown to have a positive effect on business and a nation. Adam Smith (a moralist) who wrote Wealth of Nations in 1776 is a potent example.”
Crispin Batten also put forward the notion that the relationship has been adequately explored, citing the work of Max Weber. He also introduced the notion that it is just as relevant to ask about the relationship in the negative. As he put it, religious belief may affect organizational performance “if the belief excludes individuals from “alien” religions from the organization, such as an Islamic bank not employing Christians or a strictly Christian firm not employing Muslims.”
So perhaps the relevant question should have been: Can ancient wisdom be used to influence morality and organizational values? What do you think?