644 Chapter 17 | Foreign Policyjob, particularly if it involves a significant pay cut. As a result, while trade deals attract
significant political support, they also generate strong opposition from individuals and
communities that correctly see the deals as a threat to their way of life. An additional
complication is that even if countries reduce or eliminate tariffs, existing regulations
create significant barriers to foreign companies that want to sell products there.
America’s relations with China are a prime example of these developments. Many
American companies have factories in China that produce a variety of products that are
sold in America. China is a major producer of rare earth metals that are used to build
computer chips. American corporations are also opening stores in China—the coffee chain
Starbucks, for example, opens more than one store per day there. In recent years, China has
been one of America’s largest trading partners, with $711 billion in trade during 2017.Globalization has transformed
economics and society in the United
States and abroad. Brands such
as Starbucks have spread around
the world. Revenue growth for the
company in China and Southeast Asia
has been substantially higher than in
the United States.Although these moves toward increased trade with China generate significant
benefits, the changes do not make everyone better off. American manufacturing jobs
have been lost as factories that could not compete with cheaper foreign suppliers have
either closed or moved to another country, leaving behind unemployed American
workers.^56 Moreover, there have been numerous complaints that Chinese companies
have stolen trade secrets from American corporations or violated American copyright
laws—in some cases with the apparent support of the Chinese government. In fact,
even after an official agreement in 2015 to eliminate industrial espionage, Chinese
hackers continue to attempt to infiltrate the computer networks of American tech and
pharmaceutical firms.^57 Moreover, China requires technology companies to disclose
trade secrets and source codes as a condition of being allowed to sell products there.
America has also enacted restrictions, such as the ban on government purchases of
telecommunications equipment from Chinese firms discussed earlier.
President Trump has departed from previous administrations in his aggressive use
of punitive tariffs to force China and other countries to change their trade practices.
The problem is, in a global economy where America is only one potential market,
these threats may only lead foreign companies to sell their goods elsewhere, raising
the prices paid by American consumers. Trump’s tariffs have also triggered increased
tariffs on American goods, which reduces American exports and hurts employees of
affected companies. Most important, however, even if trade barriers disappear andFull_18_APT_64431_ch17_614-654.indd 644 16/11/18 11:22 AM