U.S. Trade Representative Robert Lighthizer is right when he argues that the United States must move forcefully to enhance America’s leadership in technology and innovation. But tariffs won’t get the job done and will make U.S. companies in China even more tempting targets for government strong-arming.
China has an industrial policy called “Made in China 2025” that embodies its ambitions to be a leading player in all the key technologies such as Artificial Intelligence, genetic editing, autonomous vehicles, drones, cloud computing and all the rest. They have a right to have that ambition. They are a sovereign nation.
The question is how do we respond? Tariffs are a throwback to the 19th and early 20th centuries. They are highly dangerous because they trigger unpredictable responses. How will putting a tariff on auto parts affect China’s ambitions in autonomous driving? Not one whit. It may actually intensify their ambition.
Yes, we should tighten up our cybersecurity against the theft of our secrets, but the single biggest and most effective strategy we have is to out-innovate, to pick up the pace and scale of our own innovation. That’s the modern way to compete. It requires a thoughtful strategy among governments, universities, research institutes and the private sector. When the Russians launched Sputnik in 1957, that’s how we responded–we created our own space program. We didn’t impose tariffs. They wouldn’t have worked then and they won’t work now.
