The G7 Should Coordinate Tougher Economic Measures Against China, Russia

CommentaryU.S. Trade Representative Katherine Tai met her G7 counterparts, plus those from India and Australia, on Oct. 28 in Japan.The next day, they released oblique criticism of China and Russia, including China’s ban on graphite exports and weaponization of trade against Japanese seafood and Russia’s military interference in Ukraine’s grain exports. The G7 denounced subsidies and forced technology transfer and agreed on the need to derisk strategic good supply chains.Related Stories10/30/202310/27/2023On Oct. 30, the United States announced that it would begin bulk buying Japanese seafood that Beijing has banned. The seafood is destined for U.S. military chow halls but represents just a fraction of the excess supply.The G7 could more thoroughly counter the Chinese Communist Party’s (CCP) trade aggression against Japan by coordinating increased seafood purchases across all its members, including Germany, France, Italy, Canada, and the United Kingdom, rather than just relying on the United States to step in. The G7 could add to this coordinated matching tariffs against China, Russia, and other “axis of evil” countries, including Iran and North Korea.Such a “freedom trade” strategy would enjoy an improved political environment for increased China tariffs that facilitate “friendshoring.” President Joe Biden left former President Donald Trump’s China tariffs largely in place, for example, and Secretary of the Treasury Janet Yellen coined the term “friendshoring” in 2022.Mr. Trump is considering an across-the-board 10 percent tariff on all goods imported by the United States if he were to be reelected as president. Even higher tariffs could be imposed on countries with which the United States suffers from high trade deficits to incentivize them to buy as much from us as we buy from them.Talk of the United States rolling back unmitigated free trade is typically met with howls of protest from U.S. trade partners and economists. But tariffs would increase U.S. bargaining power as a net importer with not only axis countries like China, Russia, and Iran but countries like India and Vietnam that might be willing to decrease their support and trade with the axis in exchange for lower U.S. tariffs on their goods.The Washington-based Heritage Foundation has traditionally been supportive of free trade. However, its position on trade with China has evolved. “Personally, I come from a free trade background, but as Ambassador Lighthizer has taught us, we should not have free trade with foreign adversaries like the People's Republic of China,” wrote Andrew Hale to The Epoch Times.“Everyone should be aware of the risks of investing in foreign adversaries, particularly those with non-market economies, including China,” he added. Mr. Hale is a senior analyst on trade and economic policy at Heritage.Even The Wall Street Journal, that bastion of support for free trade that takes its anti-tariff creed as a matter of religion, ran an opinion article that explains the arguments for tariffs. The article, published on Oct. 27, is titled “Why Trump Is Right About Tariffs.”The day before, the Journal ran an article detailing the loopholes in current tariff laws against China, including the “de minimis” exemption, which is a fancy way of saying that packages valued less than $800 pay zero tariffs, while the same goods sent in bulk and sold to Walmart customers would pay the tariff. That’s unfair and benefits direct-to-customer retailers from China like Shein and Temu. It explains their profits (and the explosion of weird ads over the last few months).To keep its exemption, Shein paid lobbyists $600,000 from April to June this year. UPS and FedEx, which profit by delivering small packages from China, are members of a business advocacy group that took a position in support of the de minimis exemption. They aggressively seek to keep delivery customers from China even if, in the process, they bury the entire U.S. economy in piles of flimsy cardboard.The European Union is also considering increased tariffs against China, especially when it comes to electric vehicles (EVs). The European Commission argues that China’s EV industry is subsidized by Beijing, which gives it an unfair trade advantage in Europe that will soon result in a flood of cheap EVs. Those EVs could completely drown European car manufacturers, setting back Europe’s industrial ecosystem by decades.The German billionaire Mathias Döpfner wants even more systemic trade penalties against the axis, including replacing the World Trade Organization with a “Freedom Trade Alliance” that is limited to countries that, among other things, observe human rights and the rule of law. Exclusion from the world’s wealthiest trading systems in the United States, Europe, Japan, and South Korea through higher tariffs would force dictatorships and fence-sitters to improve support for human rights so they can regain easy access to U.S. and allied markets.Mr. Döpfner explained, “We need something whe