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Bill Gates and Ohio auto parts factory workers

Summary:
China recently announced that it will beef up its intellectual property rights enforcement: China said on Sunday it would seek to improve protections for intellectual property rights, including raising the upper limits for compensation for rights infringements. . . . The document said that by 2022, China should be making progress in issues that have affected intellectual property rights enforcement, such as low compensation, high costs, and the difficulty of proof. By 2025, there should be a better system of protection in place. This will justifiably be regarded as a success in President Trump’s trade war with China.  There are, however, a few caveats to consider: 1. President Trump will no longer be in office in 2025. 2.  The people who will trumpet this as a big

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China recently announced that it will beef up its intellectual property rights enforcement:

China said on Sunday it would seek to improve protections for intellectual property rights, including raising the upper limits for compensation for rights infringements. . . .

The document said that by 2022, China should be making progress in issues that have affected intellectual property rights enforcement, such as low compensation, high costs, and the difficulty of proof. By 2025, there should be a better system of protection in place.

This will justifiably be regarded as a success in President Trump’s trade war with China.  There are, however, a few caveats to consider:

1. President Trump will no longer be in office in 2025.

2.  The people who will trumpet this as a big success are the same people who tell us that China can never be trusted to live up to its agreements.  (That’s not necessarily my view, but it is the view of many trade hawks.)

3.  This a big win for Bill Gates, who will now become even richer.  Meanwhile Trump’s economic policies (especially the fiscal policy train wreck) are making the trade deficit even bigger, which hurts Ohio workers making auto parts:

Bill Gates and Ohio auto parts factory workers

And America’s manufacturing growth is slowing sharply:

Bill Gates and Ohio auto parts factory workers

I do believe that this is a modest success in the trade war.  But looking at the bigger picture, it’s far from clear that we are achieving anything of major significance.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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