ECONOMIC TENSIONS BETWEEN THE UNITED STATES AND CHINA
INCREASED RECENTLY, WITH THE TRUMP ADMINISTRATION LEVELING
STIFF TARIFFS AGAINST CHINA, AND BEIJING PROMISING TO RETALIATE.
I SAT DOWN WITH PAUL MUSGRAVE, ASSOCIATE PROFESSOR OF POLITICAL
SCIENCE AT UMASS AMHERST TO FIND OUT WHAT THIS MEANS FOR THE
FUTURES OF BOTH COUNTRIES, AND THE WORLD ECONOMY - AS WELL AS
HIGHER EDUCATION HERE IN AMERICA.
>> THE BIG STORY OVER IN U.S.-CHINA RELATIONS.
AMERICA AND CHINA HAS GONE FROM BEING TRADE PARTNERS TO ALMOST
TRADE ANNIVERSARIES AND JUST -- ADVERSARIES JUST AS
PEOPLE THOUGHT THE TALKS WERE BEING WRAPPED UP, ALL OF A
SUDDEN, THE TRUMP ADMINISTRATION DECLARED WITH SOME REASONING
THAT CHINA HAD STARTED TO BACKTRACK ON THEIR PROMISES AND
SLAPPED A WHOLE BUNCH OF NEW TARIFFS, 25% TRAVIS ON $200
BILLION -- TAXES ON $200 BILLION AND WE'RE WAITING WHAT THE NEXT
STEP IS GOING TO.
>> TELL US WHAT THE PRODUCTS THAT'S GOING TO BE.
>> THE PRODUCTS THAT HAVE COME UNDER THIS INCLUDE SPEAKING MORE
BROADLY PROBABLY MOST BROADLY TELECOMMUNICATION PRODUCTS FROM
THE CHINESE COMPANY HUAWEI WHICH IS HAVING ITS PERMISSION
INVOLVING U.S. TECHNOLOGY BEING YANKED AND SOMETHING SIMILAR
HAPPENED TO THE CHINESE FIRM ZTE.
IT WAS DESCRIBED THEN AS A DEATH SENTENCE.
IT'S LOOKING LIKE SOMETHING THAT COULD BE SIMILAR FOR HUAWEI SO
THERE'S THE TARIFFS WHICH RANGE A-ACROSS THE A WHOLE BUNCH OF
OTHER THINGS BUT THEN THE NONTARIFF BARRIERS ON U.S.
TECHNOLOGY REALLY HAVE ESCALATED THINGS AND REALLY ARE STARTING
TO UPHOLDS AN EXISTENTIAL -- STARTING TO POSE AN EXISTENTIAL
THREAT.
>> WHAT'S YOUR REACTION TO MR.
TRUMP SAYING ABOUT IT.
>> I THINK PRESIDENT TRUMP SINCE THE CAMPAIGN, SINCE 2015, THE
EARLY DAYS OF THE CAMPAIGN, HAS BEEN VERY FIRM GOING ON AFTER
WHAT HE SAYS AS CHINESE THREATS TO AMERICAN ECONOMIC
COMPETITIVENESS, AND IN A LOT OF WAYS I THINK THAT HE'S GOING
ABOUT THIS IN KIND OF A CLUNKY WAY.
IN OTHER WAYS ESPECIALLY WHEN IT COMES TO ISSUES LIKE
INTELLECTUAL PROPERTY, THEFT OR FORCED TECHNOLOGY BY CHINESE
FIRMS GOING AFTER WESTERN FIRMS IN CHINA AND CERTAINLY FOLKS
LIKE U.S. TRADE REP ROBERT LIGHT HAUSER AND WHITE HOUSE ECONOMIC
VOIR DIRE PETER NAVARRO HAVE REALLY BEEN PRETTY SOPHISTICATED
IN TALKING ABOUT HOW THE UNITED STATES TO PRESERVE ITS
ECONOMIC EDGE NEEDS TO PROTECT THESE IDEAS, AND SO EVEN THOUGH
IN A LOT OF WAYS PRESIDENT TRUMP WHEN HE TALKS ABOUT STEEL, WHEN
HE TALKS ABOUT LOW-GRADE CONSUMERTRONICS REALLY ISN'T --
ELECTRONICS REALLY ISN'T MUCH OF A ISSUE.
WHEN YOU TALK ABOUT THE CORE OF THE DISPUTE THERE IS SOMETHING
TO BE SAID ABOUT WHAT THE PRESIDENT HAS BEEN DOING.
>> AND HE'S CONVINCED HE'S GOING TO WIN THE TRADE WAR.
IS THERE ANOTHER WAY TO GO AROUND THIS, YOU KNOW, TO
PROTECT THE IS IN US.
>> WELL, BOTH SIDES OVER THE LAST COUPLE OF YEARS HAVE BEEN
PLAYING IT ALMOST LIKE CLASSICAL NEGOTIATING THEORY.
YOU SIGNAL WHAT YOU WANT TO DO, THE OTHER SIDE TAKES THAT AS A
THREAT AND THEN YOU KEEP ESCALATING UP, YOU KNOW, THE
FIRST TARIFFS WERE VERY SMALL, THINGS LIKE WASHING MACHINES AND
THEN YOU HAD ROUNDS THAT WERE 10 OR $15 BILLION WORTH OF PRODUCTS
AND NOW BOTH SIDES ARE LOOKING AT TARIFFS ON HUNDREDS OF
BILLIONS OF DOLLARS BEING SUBJECTED TO THIS.
THIS IS A CONTEST OF WILLS.
PRESIDENT TRUMP THINKS HE HAS THE EDGE BECAUSE OF AMERICA'S
LEAD IN AMERICAN TECHNOLOGY AND INTELLECTUAL PROPERTY AND
PRESIDENT SHE REALLY THINKS HE HAS THE EDGE BECAUSE UNLIKE
PRESIDENT TRUMP HE DOESN'T HAVE TO BE RE-ELECTED AND SO THE
CHINESE GOVERNMENT HAS BEEN STRATEGICALLY TARGETING FOR
RETALIATION INDUSTRIES THAT ARE KEY TO PRESIDENT TRUMP'S
ELECTORAL BASE AND THAT'S WHY YOU SEE PRESIDENT TRUMP GOING
OUT OF HIS WAY TO PROTECT FARMERS IN STATES LIKE IOWA AND
KANSAS THAT HELPED HIM WIN.
IT WILL COME DOWN TO A QUESTION WHO HAS GREATER RESOLVE TO
PERSIST IN THE TRADE WAR AND I'M NOT SURE EITHER SIDE KNOWS FOR
SURE AND I THINK BOTH SIDES ARE GOING TO HAVE LOTS OF INCENTIVES
TO KEEP ESCALATING EVEN FURTHER.
>> HOW WILL THIS AFFECT CONSUMERS.
>> IT WILL AFFECT THEM MOSTLY NEGATIVELY.
IF YOU ARE BUYING THINGS LIKE WASHING MACHINES OR iPADS OR
iPHONES, YOU'RE INVOLVED WITH TRADE HAD IN CHINA AND BECAUSE
CHINESE MANUFACTURING IS INVOLVED IN SO MANY GLOBAL
SUPPLY CHAINS -- EVEN IF THEY DON'T MAKE EVERYTHING, THEY
MIGHT ASSEMBLE THINGS OR MAKE KEY PARTS EVENTUALLY THOSE ARE
GOING TO TRICKLE DOWN INTO HIGHER PRICES FOR CONSUMERS AND
THE STUDIES THAT HAVE BEEN DONE HAVE SHOWN THAT BASICALLY ALL
THOSE TARIFFS THAT PRESIDENT TRUMP IS SO PROUD OF,
THE COST IS BEING PASSED DOWN INTO CONSUMERS UNTIL NOW IT
HADN'T BEEN NOTICEABLE BUT IF THE PRICE OF iPHONES JUMPS 100
OR $200 OR IF THEY BECOME SCARCE BECAUSE OF SOME VOLUMES OF
MANUFACTURING THERE'S NO ALTERNATIVE TO CHINESE ASSEMBLY.
I THINK CONSUMERS WILL REALLY START TO FEEL THE PINCH.
>> WHERE DO AUSTIN STAND ON TARIFFS -- WHERE DO THEY STAND
ON TARIFFS ON THIS CURRENT DEBATE?
>> IT DEPENDS.
IT'S CONFUSING, YOU KNOW, WHEN WE WERE TALKING ABOUT MEXICAN
AND CANADIAN TARIFFS, THE UNIONS WERE ACTUALLY OPPOSED TO THEM
BECAUSE STEELWORKERS HAVE A UNION THAT CROSSES THE
UNITED STATES-CANADA BORDER.
WHEN YOU GET DOWN INTO SOME OF THESE ISSUES, THERE ARE UNIONS
IN AREAS THAT -- IN INDUSTRIES THAT MIGHT BENEFIT FROM THESE
TARIFFS THAT SUPPORT THEM.
I THINK IN GENERAL, THOUGH -- IF YOU THINK ABOUT THE UNION
MOVEMENT IN AMERICA TODAY, MOSTLY THEY'RE PUBLIC SECTOR
UNIONS AND THEY'RE GOING TO HAVE A VERY MIXED REACTION TO THIS.
>> OKAY.
YOU ALSO WROTE AN ARTICLE RECENTLY ABOUT HOW IT WILL
AFFECT HIGHER EDUCATION.
SOMETHING THAT, YOU KNOW, MAYBE A LOT OF PEOPLE WOULDN'T EVEN
THINK ABOUT IN THIS CONVERSATION.
EXPLAIN -- EXPLAIN THAT ARTICLE TO US.
>> WELL, I THINK ONE OF THE THINGS PEOPLE SHOULD REALIZE
ABOUT HIGHER EDUCATION IN THE UNITED STATES IS THAT IT'S A
GENUINELY GLOBAL PHENOMENON.
HIGHER EDUCATION IS ONE OF THE AMERICA'S LEADING EXPORT SERVICE
INDUSTRIES OF THE SEVERAL MILLION COLLEGE STUDENTS IN
AMERICA.
A COUPLE HUNDRED THOUSAND OF THEM, 300,000 ARE ACTUALLY
CHINESE.
SO AMERICA HAS THE LARGEST INTERNATIONAL HIGHER EDUCATION
MARKET CHINESE STUDENTS COMPRISE THE BIGGEST SECTOR OF THAT.
IF CHINESE STUDENTS COMPRIDES THEIR OWN STATE UNIVERSITIES,
YOU KNOW -- TAKE ONE STATE ALL THE STUDENTS IN THERE THEY WOULD
BE THE 19th LARGEST STATE IN THE UNITED STATES IN TERMS OF THEIR
COLLEGE ENROLLMENT.
OVER THE PAST COUPLE MONTHS AS WE STARTED TO SEE THE TRADE WAR
HEAT UP AND ALMOST DAY-TO-DAY, HOUR TO HOUR THE TRADE WAR HAS
ESCALATED SHARPLY THE RANGE OF INDUSTRIES THAT ARE AFFECTED BY
THIS HAS REALLY GROWN AND I THINK AT THIS POINT WE SHOULD BE
THINKING ABOUT WHEN AND WHO SHOULD BE BRINGING HIGHER
EDUCATION INTO THE TRADE DISPUTE.
200, 300,000 CHINESE STUDENTS, THAT'S A LOT OF PEOPLE -- THOSE
ARE TYPICALLY PAYING HIGHER TUITION THAN AMERICAN STUDENTS.
THERE ARE PROBABLY DOZENS IF NOT A COUPLE HUNDRED AMERICAN
UNIVERSITIES WHO FOR THOSE STUDENTS WENT AWAY WOULD BE
FACED WITH SOME DIFFICULT, DIFFICULT CHOICES.
>> DO YOU THINK THOSE STUDENTS WOULD GO AWAY?
DO YOU THINK THEY WOULD BE ENCOURAGED OR DISCOURAGED FROM
GOING TO THE U.S.? >> WELL, ONE SCENARIO THAT THIS
COULD HAPPEN IS EXACTLY THAT, THAT BACK IN CHINA, THE
GOVERNMENT STRONGLY DISCOURAGES OR EVEN OUTRIGHT BANS STUDENTS
FROM TRAVELING TO THE UNITED STATES FOR HIGHER
EDUCATION.
SOMETHING LIKE THAT HAPPENED IN CANADIAN AND SAUDI RELATIONS
LAST YEAR WHEN CANADA STARTED TO CRITICIZE RIYADH'S HUMAN RIGHTS
PROGRAMS, AND THE OTHER WAY THIS COULD HAPPEN IS ACTUALLY AN
AMERICAN CRACKDOWN ESPECIALLY ON CHINESE GRADUATE STUDENTS COMING
TO THE UNITED STATES UNDER THE GUYS OF NATIONAL SECURITY.
USING THE SAME SORT OF LOGICS THAT HAVE BEEN APPLIED TO OTHER
INDUSTRIES AND SAYING IF YOU HAVE A CHINESE STUDENT IN
AMERICAN UNIVERSITIES PARTICIPATING IN AMERICAN
RESEARCH WEBS IF THEY'RE TAKING MORE THAN THEY SHOULD BE AT HOME
AND THERE'S BEEN A BILL IN CONGRESS TO CURB DRAMATICALLY
THE NUMBER OF VISAS GIVEN TO CHINESE STUDENTS.
EITHER ONE COULD MAKE THAT CALCULATION AND REALLY CRACKDOWN
ON CHINESE STUDENTS COMING TO THE UNITED STATES.
AMERICA.