John Bolton: U.S. Won't 'Turn A Blind Eye' To China's Trade Practices

9 hours ago
Originally published on December 6, 2018 7:48 pm

The arrest and possible extradition of a Chinese business executive highlights ongoing trade tensions between the U.S. and China that national security adviser John Bolton says will be a major focus of negotiations over the next three months.

Those tensions contributed to another roller coaster day on Wall Street. The Dow Jones Industrial Average was down more than 700 points on Thursday, but recovered to close down less than 80 points. That followed a 799 point drop in the Dow on Tuesday.

Meng Wanzhou, chief financial officer at China's Huawei Technologies, was arrested in Canada Saturday at the request of U.S. authorities and faces possible extradition to the United States. In an interview with NPR's Steve Inskeep, Bolton declined to address the reasons for her arrest, but said the U.S. has long been concerned with what it views as her company's theft of technological know-how.

"You should not turn a blind eye when states, as a matter of national policy, are stealing intellectual property from their competitors," Bolton told NPR's Morning Edition. "Huawei is one company we've been concerned about. There are others as well."

Huawei is one of the world's leading producers of smartphones and telecommunications equipment. Meng is the daughter of the company's founder. She's expected to appear for a bail hearing in Vancouver on Friday. The Justice Department also declined to comment on the reason for Meng's arrest.

Cease-fire?

She was detained the same day President Trump and Chinese President Xi Jinping held a working dinner in Buenos Aires, Argentina.

The two leaders emerged from that meeting signaling a cease-fire in their trade war. Trump agreed to hold off on additional tariffs on Chinese imports for 90 days while negotiations continued over China's trade practices.

"The main thing is to protect American jobs and American companies from the unfair treatment that they've received at the hands of the Chinese government," Bolton said. "They're not beating other countries in fair competition. They're stealing from them."

Vice President Pence also sounded a warning about China's growing assertiveness in a speech this fall to the Hudson Institute.

"America had hoped that economic liberalization would bring China into a greater partnership with us and with the world," Pence said. "Instead, China has chosen economic aggression, which has in turn emboldened its growing military."

Bolton generally shares those hawkish views. But he stressed the U.S. is not trying to limit China's economic growth.

"I don't think national security requires that at all," Bolton said. "What I think national security does require is that whatever economic growth China is blessed with, it gets by playing by the rules."

He reiterated the vice president's skepticism that prosperity would automatically lead to political change in China.

"I've heard going back years: 'Just let the Chinese economy grow a little bit and you'll see democracy spread all through the country,' " Bolton said. "We know today that connection is far from certain."

"I am a Tariff Man"

Financial markets initially welcomed the Trump-Xi cease-fire, with stocks rallying on Monday. But doubts soon crept in that it would last, especially after Trump tweeted his support for tariffs on Tuesday.

"I am a Tariff Man," Trump wrote. "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs."

Indeed, Trump's tariffs on Chinese imports cost American businesses and consumers $2.2 billion in October, the first month in which those tariffs were fully in effect, according to an analysis of U.S. Census data by the Trade Partnership, an economic research firm.

"Americans are paying these taxes and they're paying more than ever before," said former Rep. Charles Boustany, R-La., who serves as spokesman for an advocacy group, Tariffs Hurt the Heartland.

Boustany notes tariffs directed at China tariffs did little to discourage imports or encourage domestic production, but retaliatory tariffs imposed by China have reduced U.S. exports. Imports from China subject to tariffs increased 2 percent in October, while exports subject to China's retaliatory tariffs plummeted 42 percent.

When combined with levies on steel, aluminum and other imports, the total price tag for Trump administration tariffs was $2.8 billion in October. That pushed the federal government's monthly tariff revenue to a record $6.2 billion.

Rules of engagement

Tariffs could go even higher if the U.S. and China fail to reach agreement on the sticky issues surrounding intellectual property and forced technology transfer. Bolton said business people are right to be worried.

"What prudent people should do is look at the way China functions and ask themselves whether trade and investment with an economy that takes advantage of its trading partners and puts their intellectual property at risk is something they want to engage in," he said.

Bolton also expressed skepticism about North Korea's willingness to abandon its outlawed nuclear program, even as he advocates for a second face-to-face meeting between the president and Kim Jong Un.

"President Trump is trying to give the North Koreans a chance to live up to the commitments they made at the Singapore summit," Bolton said. "He's held the door open for them. They need to walk through it."

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MARY LOUISE KELLY, HOST:

For the first time in the history of the European Union, a university is being kicked out of a member state. The member state is Hungary. The university is CEU, Central European University, seen as one of the world's best graduate schools. But Hungary's Prime Minister Viktor Orban has picked a fight with it, a situation that University President Michael Ignatieff lamented when we interviewed him last year as it became clear his university was under threat.

(SOUNDBITE OF ARCHIVED BROADCAST)

MICHAEL IGNATIEFF: We're not a hotbed of anti-Orban agitation. We never will be because I think that would compromise what a university is for. We're actually a serious graduate institution. And if they would leave us alone, we'll leave them alone.

KELLY: Instead, Central European University now says it will move to Vienna. Well, The Washington Post's Griff Witte has been covering this story. He joins me now from Hamburg, Germany. Welcome.

GRIFF WITTE: Thank you. Good to be here.

KELLY: So to give people listening a little more context for why Americans should care, this is a U.S. institution, right? A private school accredited by the U.S., founded by George Soros, the Hungarian-American philanthropist.

WITTE: That's right. So this is a school that has both Hungarian and U.S. accreditation, and it was founded by George Soros specifically to be a bridge between the West and the East. It was founded in the wake of the fall of the Iron Curtain, and the idea of the school was that it would be a school that would educate the next generation of leaders for Eastern Europe.

KELLY: So what is it about Central European University that Viktor Orban, prime minister of Hungary, doesn't like?

WITTE: Well, he doesn't like that George Soros is the founder of the university. So George Soros is someone whom Viktor Orban has vilified. He's made Soros into a boogeyman. He talks about Soros as being someone who wants a multicultural liberal vision for Hungary and for Europe that he sees as outdated.

KELLY: Is there something more at stake other than just bad blood between these two guys?

WITTE: I think there's a lot more at stake. This is a university. This is not a political party. It's not a political figure. It's a university, and it is being kicked out of a EU member state. And so that is, by its very nature, a question of academic freedom. It's a question of whether Orban is someone who is going to be able to just have his way and basically get his way.

KELLY: Well, we mentioned this is a - this is an American institution, so let me ask you about American reaction. The U.S. ambassador to Hungary, a guy named David Cornstein, arrived in Budapest this summer and said it was a mission of his to keep the university open. But then you interviewed him, Griff, just last week, and he had changed his tune. Let's listen to some of the tape from your interview.

(SOUNDBITE OF ARCHIVED RECORDING)

DAVID CORNSTEIN: The university is in another country. It would pay to work with the government, with the prime minister - not have an adversarial arrangement with the government.

KELLY: It would pay to work with the government. Griff, what do you - what was your takeaway from your interview with the ambassador?

WITTE: What the ambassador seems to be saying there is that this is a situation that George Soros could have avoided if he had been more acquiescent to the government of Viktor Orban, if he had played by Orban's rules, if he had been more willing to appease Orban. So it's a very different stand than what you have heard from U.S. officials all along, which is that CEU needs to be defended here.

KELLY: Should we read this as an ominous sign for U.S. institutions operating inside other countries with authoritarian governments?

WITTE: Well, I think that's a real concern. There are universities, there are companies, there are organizations - NGOs that are American operating all around the world. Some of them operating in adversarial governments and...

KELLY: Russia comes to mind, for example, or China or any number of other governments.

WITTE: Absolutely. And Hungary, let's not forget, is a U.S. ally. It's a country that is a member of NATO. It's a member of the EU, and it's taking this action of kicking out a U.S. university. There don't seem to be consequences. The signal to other governments that are autocratic or illiberal around the world, perhaps, is you can do this, too; you can kick out an American institution, and you're not necessarily going to suffer the consequences for that.

KELLY: Griff Witte - he is The Washington Post's Berlin bureau chief - talking there about Central European University, which has been kicked out of Hungary and which plans to welcome students in Vienna come September. Griff Witte, thank you.

WITTE: Thank you.

KELLY: And we should note George Soros is the founder and chair of the Open Society Foundations, which has been a financial supporter of NPR in the past. Transcript provided by NPR, Copyright NPR.