During the 2016 presidential campaign, Donald Trump promised the American people over and over that if elected, he was going to be the one who would finally “get tough” with China.
It’s a refrain he’d been sounding for some time. In a Wall Street Journal piece published a year to the day before he became president-elect, he sounded a loud alarm about their various economic misdeed.
“On day one of a Trump administration the U.S. Treasury Department will designate China a currency manipulator,” Trump wrote. “This designation will trigger a series of actions that will start the process of imposing countervailing duties on cheap Chinese imports, defending American manufacturing and preserving American jobs.”
It hasn’t quite worked out that way. The appointment of Iowa GOP Gov. Terry Branstad as U.S. Ambassador-designate to Beijing is a good start, but there is plenty left to do, even if the White House continues to wield the designation of “currency manipulator” as the stick alongside some kind of cooperation inducing carrot.
It’s a tough row to hoe. China already holds more than $1.4 trillion in U.S. paper and, as the moratorium on raising the debt ceiling comes to an end, we may be forced to turn to them to buy up more U.S. debt, at least in the short run. Since the Beijing government is deep into every sector of the economy, it might not be too much of a lift to get them to do that but someone has to draw the line some place. There are just some things not worth giving up no matter how much U.S. debt the Chinese buy.
One area that’s not given too much consideration is the acquisition of U.S. companies by the Chinese. Again, because so much of its so-called “private sector” takes its marching orders from the government, it’s hard to look at these transactions as purely benign. Thus the pending takeover by ANT Financial of MoneyGram, a leading private U.S.-based payments company, is something that should be approached with considerable caution.
China’s record on consumer issues like cyber-security and intellectual property is, in a word, abysmal. That’s not an accident; according to experts the government profits to a considerable extent from illegal activity in this sphere, redirecting that money to fund expansions of its military might. They’ve hacked the U.S. Office of Personnel Management and the Federal Deposit Insurance Corporation. Allowing them to purchase a company through which people willingly turn over sensitive financial date in order to transmit money around the globe without intensive review and considerable thought into the implications seems pound-foolish and maybe not even penny-wise.
As U.S. Secretary of the Treasury, Steven Mnuchin is also a member of the Committee on Foreign Investment in the United States, an inter-agency federal committee charged with reviewing the national security implications of foreign investments in U.S. companies or operations. Though he may be busy with other things it is incumbent on him to take the lead in asking CFIUS to review the MoneyGram/ANT Financial deal.
A group of prominent conservative leaders recently wrote to him asking he do just that. They want Mnuchin to insure any deal successfully concluded between the two companies will not provide the Chinese national security community a side door through which they can obtain critical, sensitive information that, if used improperly, could erode the economic and financial stability of the nation.
China must not be allowed to gain a foothold in the global financial payments market unless there are sufficient safeguards in place to prevent it from using the information, technology, and economic power to the detriment of America’s economic and national security. If President Trump truly intends to “get tough” and put America first this is a deal that cannot be allowed to go through without anyone asking tough questions.
Beijing’s track record on intellectual property rights, rule of law, consumer protection, and currency manipulation is horrible and this deal does not deserve the benefit of the doubt it will behave unless it is forced to.
Roff is a former senior political writer for UPI and a well-known commentator based in Washington, D.C. Email him at Peter.Roff@Verizon.net.