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President Donald Trump has faced untold criticism for his aggressive approach with China. The opposition on the left have charged that attacking the Asian juggernaut would hurt our own economy. As the old saying goes, China owns us.

But recent allegations from Bloomberg Businessweek suggest that the world’s second-largest economy has had significant help; namely, from us. According to the report:

China’s military deployed a microchip to attack hardware in the supply chain and had infiltrated U.S. tech giants like Amazon and Apple. Both companies have denied the report. But it still raised many concerns about Chinese electronic manufacturers. Hong Kong-listed Lenovo and ZTE saw share prices drop by 15% and 10%, respectively, on Friday.

Adding to the controversy, Vice President Mike Pence claimed China “directed its bureaucrats and businesses to obtain American intellectual property.” Pence also asked Google to cease its search-engine project for the Asian giant out of censorship fears.

While any tough measures against China will hurt the U.S., the Trump administration has few choices. In the internet age, intellectual property is everything. Otherwise, no point exists in developing the next great technology: the Chinese will steal it, make their own cheap version, and that’s that.

Trump is actually doing the right thing for the international community, but he’s certainly not receiving any credit for it.

 

China Will Hurt More for Breach of Intellectual Property

That has much to do with the fact that American businesses will experience significant pain. Krystal Hu of Yahoo Finance writes:

Meanwhile, China has become the growth engine of some U.S. companies. Starbucks (SBUX) is among the biggest success stories. Since opening its first store in Beijing in 1999, the Seattle-based coffee chain now runs 3,400 stores and plans to open a new one every 15 hours through 2022.

Apple’s premium iPhones are red-hot status symbols in China, where the iPhone maker (AAPL) reported $13 billion in revenue during its fiscal second quarter this year, contributing more than 20% to its global revenue.

All of this is true. But when push comes to shove, China will bruise the U.S., but the U.S. will cripple China. Consider that Chinese consumer confidence fell off a cliff when hostilities between the two nations reached a fever pitch.

For instance, between August and May of this year, consumer confidence dropped 3.5%. That’s a massive magnitude over such a short period. China needs us more than the other way around.

What this controversy also demonstrates is the Asian powerhouse has a fake economy. Trump’s harsh words in the past are correct: we made China. Their economy has never produced anything unique; instead, they stole our intellectual property, reverse-engineered it, and claimed it as their own.

President Trump has certainly aroused controversies throughout his administration, some of it not undeserved. But I won’t fault him for stating the truth, even if it’s inconvenient.

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