Open to Debate: Was Trump Right to Increase Tariffs on Chinese Imports?

In a collaboration between CFR and Open to Debate, panelists debate whether the efficacy of President Trump’s recently enacted ten percent additional tariff on Chinese imports.

Open to Debate is the nation’s only nonpartisan, debate-driven media organization dedicated to bringing multiple viewpoints together for a constructive, balanced, respectful exchange of ideas. Open to Debate is a platform for intellectually curious and open-minded people to engage with others holding opposing views on complex issues.

 

ANNOUNCER: President Trump has announced a 10 percent tariff hike on Chinese imports, framing it as a safeguard for American industries and a push toward less reliance on Chinese manufacturing. Supporters see it as a catalyst for domestic production and a remedy for international trade imbalances. Critics, however, warn of rising costs for U.S. consumers and businesses, along with heightened trade tensions. Will these tariffs bolster American manufacturing and serve as a strategic bargaining chip or trigger economic retaliation that harms U.S. interests? Tonight, Open to Debate, in partnership with the Council on Foreign Relations, takes on this urgent question: Was Trump right to increase tariffs on Chinese imports? (Applause.)

DONVAN: This is Open to Debate. I’m John Donvan, for an episode we’re doing in partnership with the Council on Foreign Relations. It’s on their stage I stand now, before a live audience in Washington, D.C., where, to put it mildly, things are moving kind of fast. Since the new administration took over in the White House all kinds of breaks with routine are happening with precedent, with conventional expert opinion, with past governing practice. And in this one we’re going to catch a ride along with one of these fast-moving developments, one with both economic and geopolitical implications. Here’s the question that we will now debate here with the participation of four expert debaters: Was Trump right to increase tariffs on Chinese imports?

I want to welcome, again, Stephen Moore. He’s an economist, an author, a senior fellow at the Heritage Foundation, as well as cofounder of Unleash Prosperity. Stephen Moore, thank you so much for joining us on the program.

MOORE: Thank you. (Applause.)

DONVAN: And your partner in this debate, also arguing “yes” in answer to the question, is Scott Paul. Scott is president of the Alliance for American Manufacturing. Scott, thank you so much for joining us. It’s great to have you here. (Applause.)

DONVAN: Opposing them, arguing “no” in answer to the question, I’d like to start with Jennifer Hillman. Jennifer, you are a senior fellow for trade and international political economy here at the Council on Foreign Relations. Thank you so much for lending your expertise to this conversation and debate. (Applause.)

And finally, coming to another “no” on the question was Trump right to increase tariffs on Chinese imports, Rana Mitter. Rana is the ST Lee chair in U.S.-Asia relations at the Harvard Kennedy School. Rana, thank you so much for making the trip down here to be part of this debate this evening. (Applause.)

And we’re going to go right into our first round. Our first round is comprised of opening statements. Each of the debaters has two and a half minutes to tell us why they’re answering “yes” or “no” to the question. Stephen Moore, you are up first. You are answering “yes” to the question, Trump was right to increase tariffs on Chinese imports. Please tell us why.

MOORE: Ladies and gentlemen, a privilege to be here. Thank you to Open to Debate to have me again. I think this is the third time I’ve done this. This may be one of the stranger debates that I’ve been involved in, because Scott and I—Scott is a liberal Democrat and I’m a conservative Republican, and we were on the same side on this. So politics has been turned a little bit upside down.

I do believe, as a free market conservative, that free trade is one of the pillars of prosperity. It’s one of the things that’s made America the strongest and most prosperous country in the world. And so in most cases we want to keep our markets open. And, by the way, as a matter of economics when two parties trade with each other by definition they’re both better off. So I do believe in free trade. And I’m not in favor of many of Trump’s tariffs, even though I’m a Trump guy. But I do agree with Trump on China. And I think China is clearly a special case. China is a villain. They are an enemy. And they’re a dangerous country. And I think most Americans would agree with that premise.

And it wasn’t so twenty-five or thirty years ago when China was making that transition from communism to free market capitalism. But something went wrong on that trip to Damascus. And over the last twenty years or so, China has moved towards—much more towards—back towards communism, much more towards an authoritarian government that is dangerous not only to our economy but our national security. And one thing that you should all think about, whether you’re pro-free trade or not, is this: Would you support free trade with Japan in 1936? Would you have supported free trade with Germany in 1938? And I would submit to answer that question, in both cases, is absolutely not. And I do believe we’re on the precipice of a potential serious conflict with China. And that being the case, it doesn’t make a lot of sense to me that we have open and free trade with China.

I think we have to have restrictions. I think Trump’s tariffs make a lot of sense. Not so much economically, but as a matter of America’s national security. They lie. They cheat. They steal. They don’t play by the rules. Their tariffs are much higher than ours are. And for all these reasons, we—Trump is absolutely right to impose tariffs on China, but not the rest of the world.

DONVAN: Thank you, Stephen Moore. (Applause.)

Now to give her opening statement I want to welcome back to the center Jennifer Hillman. Jennifer, you’re answering “no” to the question, Trump was not right to increase tariffs on Chinese imports. Please take this chance to tell us why.

HILLMAN: OK. I’m going to provide three reasons why I think this was a mistake. First is that the tariffs are damaging to the U.S. economy. We have to remember that tariffs are taxes on Americans that American importers pay and pass those on in the form of higher costs to American consumers. In just one year, 2018, the past tariffs cost the American consumer an average of $14 billion.

Second reason is that the tariffs are going to fall most heavily on the lower- or middle-income people because they spend a much higher percentage of their overall income buying goods—the kind of food, and medicine, and electronics, and everything else that is the subject of the tariffs. And this burden on the lower and middle income comes at a time in which the wealth gap in the United States is out of control. If you look at the numbers, the top 1 percent of the people in the United States have 30 percent of all of the wealth. The bottom 50—50—percent of the people in this country have only 4 percent of the wealth, and these tariffs are going to make that worse.

Third thing is that the tariffs are also costing jobs because they make input materials that companies need to make stuff more expensive. The current estimate is these tariffs alone, this 10 percent increase in tariff, will cost us 78,000 jobs. And the last thing is that the tariffs invite retaliation. So China will put on tariffs on American goods, which makes it harder for our exports.

The second reason why I think these tariffs are a bad idea is that they are illegal. They violate the commitments that the United States made at the WTO, not just to China but to all of the members of the WTO, that we would not impose tariffs higher than our bound rates and that we would not discriminate. And these tariffs violate both of those premises. They are also illegal under U.S. law. The U.S. Constitution gives Congress, not the president, the power to impose the tariffs. But the president has used an international emergency to put these tariffs on, in a way that has never been done and is not consistent with the Constitution. And the illegality hurts because it tells all of our trading partners, you can’t trust America. If they violate this trade agreement, they’ll violate another one.

And the last reason why I think these tariffs are a mistake is it’s not clear why we’re doing them. The executive order that imposed the tariffs says very clearly there’s one reason for the tariffs, that’s to stop fentanyl coming in from China. At the same day—at the same time that the president says that these tariffs are all about fentanyl, he says, no, actually, they’re to raise revenue in order to pay for tax cuts. And then he says, no, they’re actually to deal with the trade deficit. And then the next thing is, no, they’re actually to make a tariff wall around the United States in order for everything to have to be made in the United States. So the president is asking the American people to bear the cost and the job losses from these tariffs without any clear understanding about why are they being imposed and what’s the end game that we’re shooting for.

DONVAN: Thank you, Jennifer. (Applause.)

All right. Now back to the “yes” side, I want to welcome back to the center Scott Paul. Scott, you’re answering “yes” to the question, was Trump right to increase tariffs on Chinese imports? Here’s your chance to tell us why.

PAUL: Thank you, John. Thank you to Open Debate, and the Council on Foreign Relations, and everybody here tonight for the opportunity to talk about this important issue. As you can imagine, Steve and I—the Venn diagram of things we agree on is pretty narrow. (Laughter.) It includes the China tariff, the Chicago Bears, and the Chicago Cubs. (Laughter.) And I support all three. And I should add, I supported the application of the China tariffs during the Biden administration, as well as during the first administration. And I want to build on Stephen’s reason why. At the core of this is national security. And what is the most important function of the government here? Is it to guarantee our security, or is it to pursue maximizing consumer welfare? And I would argue that over the course of our history that national security has been a far more compelling reason.

We made an enormous mistake twenty-five years ago, in hindsight. I didn’t support that decision. I know Stephen did. But you cannot look at the trillions of dollars that have shifted out of the United States and into the hands of the Chinese Communist Party as being an enormous historic mistake. It was, in many ways, a dystopian Marshall Plan. The opposite of what was supposed to happen occurred. And there has been a lot of damage because of this policy, and then because of the years of inaction that followed it. We lost one of every three manufacturing jobs in this country during the China shock. We lost 40,000 factories that made highly skilled things. These are not just plastic widgets. These are things like machine tools. These are shipyards that build ships. This is semiconductor capability that left our country during this period of time.

Millions of lives were destroyed, and it has been well documented. They lost their jobs, their wages were forever depressed, and it had social impacts that are going to last generations in this country. Now, I will say, a tariff is not the only answer to this solution, but it is a necessary component of it. And in a $30 trillion—$30 trillion economy we are well equipped to absorb this. China started this trade war twenty-five years ago. It’s about time we stood up for American workers, imposed this tariff, and engage in a more responsible manner. Thank you. (Applause.)

DONVAN: Thank you, Scott Paul.

And that brings us now to Rana Mitter. Rana, you are answering “no” to the question, was Trump right to increase tariffs on Chinese imports.

MITTER: Thank you, John. So you have a major business rival who you want to give a dire warning that that rival is going the wrong direction. And you decide to do it old school. So he gets home. He walks upstairs. He walks into the bedroom, throws back the door, and sees right there on the bed is a sheet stained with blood from a horse’s hind leg. And in the card left next to it, it says: Sorry, it was too much of a schlep to get a horse’s head; will this do? (Laughter.) That, in a nutshell, is the problem with the 10 percent tariffs that our proposition here are proposing. Because if the aim is national security, if the aim is restoring manufacturing jobs for the United States, if the job is to stop fentanyl—all of which are very worthy aims, and if those were the aims only I’d come over to your side right now, gentlemen—then these tariffs are not going to do it.

How do we know that? Because look at China’s reaction to the 10 percent tariffs in the last couple of weeks. They’ve done two major things. The first one is to announce that they will take the United States to the World Trade Organization. Jennifer is the expert here, but we should get a result back in about, I don’t know, seven and a half years, something like that? (Laughter.) Doesn’t sound all that urgent to me. The other thing that we’ve done—that we’ve seen them do, is to put an urgent investigation on antitrust grounds on Google. That will be Google, that was banned from China fifteen years ago and hasn’t actually operated in the country as a search engine for about that period of time. In other words, picking on something that’s not actually in China and a great—at a great level in the first place. That doesn’t suggest to me that the adversary that Stephen and Scott are talking about is exactly quaking at this particular measure.

But there are others who will be doing. And that will be my second reason, apart from the ineffectiveness of these tariffs, that we should drop them and do something that will actually work. And that is where it sends Chinese investment and the trade that China will remove from the United States. It will send it in the direction of Europe. And it will send it one particular place of great concern, I think, to Scott, in particular, which is the manufacturing of electric vehicles and the new generation of automobiles. More and more of the EU’s technology is coming from companies in China. And these tariffs will push more and more incentive to China and the EU to operate together, at a time when there is a great deal of uncertainty about where American power is going in the world.

I think that American power, used well, has been one of the great forces for good in the last seventy-five years. For that reason, I think it is necessary that these ineffective tariffs should be dropped, and instead we think about what is actually going to work to solve the very real problems the proposition has put forward, but which their solution I think is going to do very little to address, at least if Chinese responses are anything to go by. Thanks. (Applause.)

DONVAN: Thank you, Rana Mitter.

All right, we’ve heard opening statements. And now we move on to round two. And in round two the debaters will have the opportunity to engage with one another and address one another directly. But I just want to say what I’ve heard in the opening round. Is Stephen Moore’s opening, making the point that China is the villain. China is the enemy. China is dangerous. And I don’t think that anybody on the stage diverts from that opinion. The agreement that China is a problem is something all of them agree upon. The value and the practice of tariffs is really where the disagreement is. Stephen Moore arguing that he’s for free trade, but that China merits an exception. China merits an exception for the reasons that he has given. And he and his partner are arguing that it’s actually a national security threat. They also are arguing that the U.S. economy could handle the consequences to the U.S. economy that would come about because of tariffs, and that China would not—China would actually be malleable to changing its behavior if the tariffs were put into place.

Their opponents are arguing the exact opposite. They’re saying that China would not flinch, that China would be able to move on to arrangements with other groups, such as the EU, and would be likely to do so. They also argue that the pain to the U.S. economy is not something that can be just brushed off, that it would damage the U.S. economy in multiple ways, that it would cost jobs, that it would raise taxes, that it would raise inflation. They also point out that it’s illegal, which sends a message that the United States is not abiding by the rule of law. That it’s not clear what the goal is, because of the fentanyl argument not really fully justifying focusing on China, as opposed to Mexico. And fundamentally, that China could just handle it, and would just not feel the impact of the tariffs.

So I want to—I want to start by taking, to this side, your opponent’s argument that the national security issue is real, which I didn’t hear either of you challenge, but that it justifies every—all of your concerns can be swept under the fact that the national security issue has to take precedence. As they said, would we want to be having open trade with Japan and Germany in the ’30s? That China is that, that there’s a national security issue that takes precedence. Who would like to respond to that first?

MITTER: I think part of the problem with that argument is that, if you look at the level of trade that the United States had with Japan in 1936, for instance, it’s far, far lower, not least because, of course, the effects of tariffs during the Great Depression—which did not do a great deal, in the pre-war period, to improve the economies of any country—compared to where China is now in the U.S. economy. One of the—I mean, Scott, you’re representing manufacturers here. You will know that small- and medium-sized manufacturers in the United States are amongst the companies that have been suffering most, and most panicked, in the last few weeks, because they don’t regard this as a national security issue. They regard this as an economic security issue, in terms of being able to get supplies and their supply chain for their own companies in a whole variety of areas of manufacturing.

Is it a good idea over time? Of course, to change the way in which one particular producer, China, dominates so much of the global supply chain. But the way to do that is by going to allies, other liberal allies such as not only the EU we mentioned, but also ASEAN, Southeast Asia, places like India, and coming up with collective strategies. Tariffs don’t help to do that because, in this particular case, what will happen is that Chinese trade will go elsewhere, to other partners who will not impose tariffs on China. And that will not be good for the security of the United States because it causes economic damage without any commensurate gain.

PAUL: Rana, I respect the argument, but I respectfully disagree. The last round of tariffs that went into place during the first Trump administration, during that period of time we seen manufacturing jobs grow in the United States. We’ve seen the trade deficit come down. And because of COVID and other factors, and the—I would say, the unreliability of the Chinese government, not the American government, you’ve seen firms with an ABC, anywhere but China, philosophy now. And the tariff will be designed to further pull them out. We need to find a way to get them into the United States. And the tariff doesn’t necessarily do that, but I do know many manufacturers who are excited to have a level playing field after years of having intellectual property theft, labor and environmental violations, a WTO that, by the way, is not equipped to deal with any of this.

They can’t deal with subsidies, with government intervention in the economy, the way the Chinese Communist Party is doing this. So going to the WTO is a fool’s errand. And I think everybody agrees with that in the trade establishment who has been fighting back against China these years. So I completely disagree. Is a tariff a perfect tool? It is not a perfect tool, but it is a very good tool, coupled with other measures, to do this. And I think—just to the other point about China’s response to this—I think their very measured response is calculated for a different reason than you would suggest. They’re much more vulnerable—

DONVAN: Could we come to that point a little bit later, and let the other side respond to the point that you just made?

HILLMAN: So I guess I would only say two things. I mean, if you look at what actually happened as a result of the previous Trump tariffs, which were heavily concentrated on steel and aluminum and on a series of products—about $360 billion worth of products from China.

DONVAN: And they date back—just for listeners who don’t know that—they date back to 2018?

HILLMAN: They date back to 2018. And if you look at them, what happened in the U.S. economy? And, again, this has been very, very well studied. Everyone from the Federal Reserve to the very, you know, independent, nonpartisan International Trade Commission, to the Federal Reserve Bank in New York, et cetera, looked at what actually happened.

So, yes, in the steel and aluminum industries, you saw job increases. But in everything that was downstream of that—everybody that needs to use metal of any kind—what you saw is actual job losses. And the net on balance was negative for the United States. The net on balance was job losses. The net on balance was a decline in overall income. The net on balance was negative. And you add on top of that, that what China did primarily in response to the first round of tariffs was to impose very substantial tariffs on U.S. wheat, U.S. corn, U.S. soybeans, and other products.

And so what had to happen is that then we had to—again, the Trump administration—had to pay subsidies to our farmers to the tune of $61 billion to make up for the fact that they had lost their markets. They had spent decades developing good markets in China, which were basically gone. More than 55 percent reduction in the amount of U.S. corn, wheat, and soybeans going to China in a single year. So our farmers suffered very greatly. So even if there were some increases in steel in manufacturing, the net loss to the United States was very substantial.

DONVAN: OK. That’s landing at your feet, Steve Moore.

MOORE: So, look, I agree with a lot of your economic arguments. In fact, you are quite correct that tariffs are taxes. You’re quite correct that the burden of those taxes are largely borne by American consumers. That’s true, although some of it is borne by the country that produced those things because their price is higher so they can’t sell as much. I’m listening to the debate and it is true, we’re talking past each other a little bit. The point I’m making is we are facing a very dangerous country in China. I mean, I wonder if your position would change if a news flash just came across the wire saying that China invaded Taiwan. Would that change your opinion about how we should deal with China?

DONVAN: Hang on. I know you meant it as a rhetorical question. I want to give you ten seconds to let us—to let us know. (Laughter.)

HILLMAN: So I think the only issue is are tariffs the right way to respond to that? I mean, what would a tariff on imports from China do if China were to invade Taiwan? I mean—

DONVAN: OK, Steve, take it back then, please. Go ahead.

MOORE: So, let me—let me address that. So the reality of the world economy today is really very simple. We are the alpha male. We are the one country in the world that everyone has to trade with. So this idea that China is going to retaliate against us, they cannot possibly win a tit for tat, you know, type of war with us because if we can’t trade with China—it will hurt the United States, no question about it. It’ll mean things are going to be more expensive. If China can’t trade with us, they go into a great depression. They can’t possibly survive as an economy if they do not have access to America’s markets.

One of the things that makes Trump, whether you like Trump or not, an incredible negotiator, he understands the most important thing in a negotiation is the concept of leverage. Leverage. Whoever has leverage in a contest almost always wins. We have tremendous leverage over China. Twenty-five years from now, we may not have that leverage. They’re growing pretty fast. We use the leverage now. I guarantee you, Trump is going to win this fight with China. They are going to back down. And the reason they’re going to back down is they have to, because they can’t win.

DONVAN: OK, Rana, take that point. They’re going to back down, that we know that now going in, and that makes the posture worth it.

MITTER: But what is it that they’re going to back down on? I mean, your question about the invasion of Taiwan—I mean, I would actually be very surprised, for the following reason, which is that most analysts suggest that it’s going to take these two or three years for China to have the kind of amphibious capacity that enables them to actually launch a full-scale invasion of Taiwan. But I think actually things that are happening right now, subversion through social media of the electoral atmosphere in Taiwan, the use of economic coercion by China—because don’t forget that Taiwan has something like 80 percent of its businesses tied to the mainland already. Those are the places where Taiwan is vulnerable, and where the United States should actually be doing more to make sure that Taiwan is defended. There have been rumors, I hope not substantiated, that some aspects of Taiwan’s business might be placed under tariffs as well. And that would be very dangerous, I think, to a state that has been actually a very important of America’s—

DONVAN: OK, I don’t want to spend too much time on this.

MITTER: Fair enough, but Stephen did ask the question. But—

HILLMAN: But, I would add, I really am—I think this is kind of really the central point, which is, what is the goal?

MITTER: Yeah.

HILLMAN: I mean, if you look—again, look at what happened the last time that we went through this, you know, in the previous Trump administration. Again, you have to remember, we imposed $360 billion worth of tariffs on China. Why? The reason stated at the time was because China was stealing our intellectual property, was forcing technology transfers. You know, there was a very significant Section 301 report that said those were the things that China was doing wrong. And then you look at what happened. The first moment the Trump administration started to negotiate with China, the number one thing on the list was to say to China, buy more American goods, not deal with technology transfer or IP. Buy more American goods.

DONVAN: Let me—let me take your—

HILLMAN: So that says that what we want from China is for them to buy more from us, dealing with the trade deficit.

DONVAN: So your challenge to the other side sounds like, what’s the point? What’s the goal?

HILLMAN: What is the goal? What is the goal?

DONVAN: Let me take that to you, Paul.

MITTER: What does victory look like?

PAUL: I can very—I can very clearly articulate the goal here. It is de-risking our economy from China and presenting more opportunities for American manufacturing. I do think it’s important that we work from the same set of facts. We have more manufacturing jobs today than we did when the tariffs started. And that’s not only in steel. That is across the board. Our economy is larger. There’s more jobs in the larger economy. Inflation is under control. The tariffs were—were not a significant contributor to prices or inflation. And they can’t be, because in a $30 trillion economy they are a tiny slice of that. And our firms are not infants. They can make choices about sourcing. And many of them did. They went to other countries. Some of them came back to the United States. Some of them renegotiated contracts. Some of them took lower margins.

They did all of this because they’re innovative and they have the ability to do that. And that’s what firms will do this time as well. And they will continue to de-risk from China. And that is exactly what the goal of this is. It is twofold. It’s both to punish China for unfair trade practices. I have no belief that China will change its behavior. I just want to be very clear about this.

DONVAN: So then what’s the—what is victory, then?

PAUL: So we need to de-risk, and we need to not reward an adversary, and we need to trade with nations that share our values.

DONVAN: You can break in.

PAUL: So that is the fundamental goal of these tariffs.

MITTER: OK. But large numbers of those countries that share the U.S.’s values, including on free trade and other values such as democracy, also have huge amounts of trade with China. It’s true of Mexico. It’s true of most of the democracies of Southeast Asia. It’s true actually of India, which has bad political relationships with China, but very, very extensive trading. How would you get to a situation realistically in the near future, Scott, where something like an iPhone was manufactured at a reasonable cost to the American consumer through manufacturing in the United States, where labor costs and the capacity to make the components is not something that can simply, as you know, be drummed up overnight, but will take many years, and possibly decades, to actually develop? How does that actually happen in the U.S.?

DONVAN: Do you mind if I direct the question to Steve, who hasn’t spoken in a while?

MITTER: OK, sure. Steve.

MOORE: Well, look, I’m making more of the security argument than—look, I’m a free trade guy so I accept a lot of the points that you’re making about the negative consequences of tariffs. But I want to—let me go back to something you mentioned earlier about fentanyl.

DONVAN: Well, I just—I just want to know if you have a brief answer to the question that was put by Rana, then I’ll come back to you, Steve.

MITTER: How do you make an iPhone?

MOORE: Which question?

PAUL: I do.

MOORE: Oh, go ahead. You go.

PAUL: I was going to say, our areas of most exposure to China are, indeed, smartphones, laptops, and Christmas decorations, OK? Over time, we can find substitutes for all three. Apple is already moving some production out of China into India. I’d like to see some of that. I’d like to see Apple invest some of its market capitalization in U.S. machine tooling again. They could be a real gamechanger there if they chose to do that. But that is a process that is not impossible. But what is not acceptable is the continued erosion of U.S. capabilities on frontline technologies and capabilities that are critical to our national security, which we allowed to erode. A tariff, again, is part of a backstop there towards setting us on the correct path there.

DONVAN: OK. I want to—I want to bring Steve into the conversation. But, Steve, I want to shift the focus to the point that Jennifer Hillman made, that the way it’s being done is not legal. And that it’s going to break trust with our trading partners that this is not going to just stop with China. That we’re showing ourselves being inconsistent and ignoring the rule of law, and that that has long-term consequences. And the two of you can go back and forth.

MOORE: Well—is that for me, or?

DONVAN: That’s for you.

MOORE: Yeah. I don’t care what the World Trade Organization says. We’re America. We can do whatever we want to. I mean, so we’re going to make up—we’re going to make new rules, and rules that are in America’s national security interest and our national interest. So I have no respect for the World Trade Organization. I wish we had never joined it in the first place. And I’m a free trade guy. I think they’ve been detrimental to trade.

But I did want to make just one quick point about this fentanyl issue, because fentanyl is the leading cause of death of our young people in America. It’s a poison that’s being imported to our country. And we know that China is complicit in that. We know they are. So it seems to me it’s not unreasonable to say to China, you know, what? You’re going to—you’re going to stop this. You’re going to do everything you can to stop killing our children. And if they say no, we say we’re going to raise tariffs on you. And if they still say no, we’re going to raise tariffs on you again, and again, again, until they stop doing it. And it gets back to this point that they’re going to have to because they cannot grow their economy without having access to America’s markets. And while we have the leverage, we should use it to get countries to do things that are in our interest.

DONVAN: OK. Jennifer, I’m going to let you—your choice on the two points that Stephen made. One of them was brushing aside your argument about illegality. Do you want to—do you want to dig in on that? The other one was on the point of fentanyl and making the argument that ultimately the U.S. has the leverage to force China.

HILLMAN: Yeah, OK. So just on—very quickly on the WTO point. I understand it’s very easy here in Washington to pooh-pooh the WTO. But at its core, it does a couple of things. A, it prevents utter chaos in the trading system. And, B, importantly, it protects America and American goods from being discriminated against. So, I mean, if we want to walk away from the WTO, that’s fine. But then all of our trading partners are free to walk away from it too, which means they can discriminate against America anytime, any day, for any reason they want.

They can decide they’re going to not honor any of our intellectual property protections. They can do anything they want, just because they want to, if that’s the world we want to live in. But there’s a cost, a real cost to having chaos reign in the trading system. I mean, again, just the uncertainty and the cost of dealing with the constant uncertainty, and never knowing what your tariffs are going to be, and never knowing if you’re going to get your goods cleared, has a huge drag on the global economy. So actually, the WTO and a rules-based system do matter, even if we’re not all that keen on the WTO these days.

And on the fentanyl point, the only point about—seriously, about the fentanyl, is that is the only basis on which these particular tariffs are lawfully imposed. So the only goal that is legal to go on these 10 percent tariffs is to deal with the fentanyl problem. And yet, as you’ve all discussed and as we’ve discussed here, that’s not the goal. I mean, we all know that. I mean, that’s not what the goal of these tariffs is. It is—again, whether it is to help on manufacturing, whether it’s to raise revenue, whether, again, it is to push back on China. But it is very clear that it is not in the legal lane that it needs to be in, which is fentanyl.

MITTER: Well, just again, to echo Jennifer’s point there, about the message that is sent by this particular set of tariffs. We’re not talking about generic tariffs, or even the 60 percent tariffs that President Trump said he was going to impose during the election campaign. It’s 10 percent, which is neither one thing or the other. I go back to my point that the Chinese themselves seem pretty relaxed about this particular act. And I’m not sure that, if we are concerned about national security, that’s the reaction we want from the Chinese side.

But the question I have—and this is a genuine analytical question—what is it, in a world where tariffs are being thrown up without any kind of international organization, with no GATT, with no WTO, with no equivalent, that will be different from the beggar-thy-neighbor tariffs of the 1920s and 1930s, Smoot-Hawley and others, that basically created a walled off global trading system that ultimately made the Great Depression much worse and led, in part, to World War II? Why would this be different this time around?

DONVAN: Paul.

SCOTT: So a couple of things. I mean, trade has already started to regionalize. I mean, and that was a trend that was underway before. I think that’s number one. I think number two is that—and I bristle at the Smoot-Hawley comparisons because the United States—

DONVAN: Can you remind people what that is, who may not know?

PAUL: If you haven’t seen Ferris Bueller, it was—(laughter)—well, at any rate, it was the—

MITTER: Bueller? Bueller? Bueller?

PAUL: —tariffs that were imposed by Congress, by the way, in the—in the in the early 1930s. We, at the time, had a healthy trade surplus. And that’s why it was particularly damaging to the United States economy. We are a—we run a trillion-dollar trade deficit in the United States in goods. We are the consumer of last resort around the world. We actually stand out as a country that does not have an industrial policy that is export driven, unlike Germany, unlike China, unlike Japan, and you go down the list of it. So in many ways, we are, right now, the most responsible nation. We’re not the outlier.

Again, there has been a trade war going on for twenty-five years, it’s just that we’ve sat back and taken it. And we’ve taken it to the point where it’s cost lives, it’s cost livelihoods, it’s cost our national security capabilities. And so I, for one, am happy that not only Donald Trump but Joe Biden stood up. And, with respect to the rate of these tariffs, you know, it’s 10 percent now. You tack that on to what has been done with the Biden and the first Trump administration, there’s an effective rate of about 20 percent on Chinese goods right now.

DONVAN: And your assessment of the United States economy’s ability to sustain itself in the face of Chinese tariff retaliation is—you’re pretty confident that we would just kind of float through it?

PAUL: Absolutely. I mean, there would be—obviously, there’s adjustment issues with anything that comes up. But we are more capable of absorbing that than any other nation around the world. We are far less trade dependent than China is. We have a $30 trillion economy. We export about a hundred—you know, $150 billion to China. We receive about $435 billion from China every year. They stand far more to lose than we do if this escalates in any way, shape, or form.

DONVAN: Jennifer, after the 2018 tariffs, which as you pointed out were put in place in response to various forms of cheating—like forced technology transfer, and espionage, over-abundant production, over supply—did those tariffs have the impact of reducing those practices on the part of the Chinese?

HILLMAN: Largely, no. Again, you have to remember, what happened after that was a negotiation under what is referred to as the Phase One agreement that the Trump administration negotiated with the Chinese. Again, remember, the number one item on that deal was that China was supposed to buy $200 billion of additional goods, on top of what they had been purchasing before the tariffs went into effect. And then there were a number of—series of other commitments that China was to make. A couple of them, I would say, yes, China did make. For example, they opened up foreign direct investment in their financial services sector to permit 100 percent financial ownership. Again, there were a number of other provisions within that.

But did China fundamentally stop the kind of forced transfer of a lot of its technologies, which often occurs? No. Did they completely stop taking our intellectual property? No.

DONVAN: Stealing, you mean.

HILLMAN: I mean, stealing our intellectual property? No, they did not fundamentally stop that. Nor, I would say, did they buy the $200 billion on top of what they were supposed to buy. So, no.

DONVAN: Stephen.

MOORE: So, you know, the thing that’s so interesting about this debate is that I kind of disagree with you, Scott, on the economics, but I totally disagree with you on the issue of what’s in America’s interest. I’m an America first guy. Whatever benefits us I’m in favor of. And so if you think about the situation, Trump has used tariffs incredibly effectively with Colombia. When Colombia said, we’re not taking the migrants back. And Trump said, we’re going to hit you with a tariff. And guess what? They said, we’ll take the migrants back. I saw it in the first term. NATO said they weren’t going to pay their NATO dues. Trump said, if you don’t pay your NATO dues we’re going to hit you with a tariff. Guess what? They paid their NATO dues. I could go on. Canada said we’re not going to help on the fentanyl fight and keeping out illegal immigrants, we said we’ll hit them with the tariff. And guess what? A week later they said we’re putting more people at the border.

So Trump is flexing our muscle appropriately to advance America’s interest. And he’s doing—that’s exactly what he is doing with China. He is using this as a tool, as a bargaining chip, to get China to do things that are in America’s interests, in a way that I think will be quite effective.

DONVAN: OK, I’m going to go to questions now. Anybody with a question raise your hand. Sir, I see you—first hand up. And there’s a microphone coming up from behind you. And, again, if you could stand and tell us your name, and ask your question, please.

Q: Welby Leaman from Walmart.

In the ranking of the sources of our national security, where does economic growth stand, as a source of our national security? And if it’s very high, how do you ensure that you can pursue policies that take the edge off of economic growth without taking the edge off of national security?

MOORE: Well, economic growth is everything. It’s a great question. So we don’t want to hurt ourselves in trying to hurt China. (Laughs.) So it’s a very good point. And this is something that makes me uneasy about some of Trump’s tariff policies, because tariffs are a tax. They do subtract from our economic growth potential. So it’s a very good point. But what I’m saying is I think it’s worth it to subtract a little bit of our economic potential, given the giant size of the China threat. Now, look, if you don’t agree with me that China is a threat, then, you know, my position falls apart. If you do agree with me that we’ve got a big problem with China, then I think the debate is pretty clear that we have to take whatever steps we can now, while we still can, before China, you know, becomes more and more militarily and economically adversarial.

DONVAN: And, Scott, you want to add to what your partner said?

PAUL: I just wanted to point out that I care deeply about economic growth, which is why I want to reduce our trade deficit, which is one of the biggest drags we have on GDP growth in the United States. We have a trillion-dollar trade deficit. So the more that we could reshore and bring work back to the United States, the more growth we’re going to have. And those are better paying jobs. And that’s more money that’s going to be circulating at Walmarts and in the community.

DONVAN: On the other side, please. Do you want to respond to that?

MITTER: Yeah, a quick response.

I think actually one of the areas that would do China a lot of good, and has repeatedly says it will do it and never does do this, is to increase domestic consumption. If that were to take place, then actually there’d be an awful lot more manufacturing going on in China, which would improve their own economy, but would also force them to open up their own economy rather more broadly than they’re doing at the moment, which would probably be much better for China being a good citizen in the international community. I’m just not sure at the moment that tariffs are going to be a very good tool to push them in that particular direction. But it’s—

MOORE: What is? What is a good tool?

MITTER: I would say, if you—since you set me the question up—a combination of pushing for genuine free trade, alliance with allies that is very, very solid and understands that economic security and military security actually go together, they’re not in different silos, and standing up for the values that surround those as well, including democracy. Those are the things that globally at the moment China is finding it much easier to pick off, because they seem in many parts of the world, including in Europe, to be rather more fragile than they were. I think going very solid on those values is actually the way to push those issues.

DONVAN: Jennifer, do you want to add on this conversation?

HILLMAN: No, I mean, the only thing that I’ve been sitting here thinking about, and it’s interesting to get, Paul, thank you very much, a question from Walmart, is, you know, the piece that we have not talked about at all tonight, which is really where the growth is in the U.S. economy, and where the growth is in the world. And that’s in services. I mean, all these tariffs, all they are on goods. I mean, but let’s just be honest, the level of sort of goods trade is fundamentally flattening out. All of the growth that’s going to come in the world is going to come in services. It’s going to come very heavily in digital services. And, again, to me, that is where you see this very much more direct connection between national security, and trade, and economic security. And so to me, a lot of what we have to do, in addition to everything that Rana has just said, is really think strategically about what it’s going to take to make America the most competitive in digital services.

DONVAN: OK, may I recognize that as a really excellent question. I just want to thank you, because that got us to a really interesting new place. And those are good questions. So follow that model, everyone, please. (Applause.) Right down in front here. I know microphone’s coming over from here.

Q: Well, I can’t follow the model of Walmart, but my question is about our future. The WTO, the whole trading system that we’re talking about, is being pulled apart in the name of fentanyl, is the U.S. relationship and our security, vis-à-vis our allies, Europe in particular. And what does this play by President Trump do with regard to what are our most important allies, through which we built up the WTO and all of the other international organizations? Is this going to undermine Europe, in particular, which has—when you add up all those European nations, they have as many consumers as the United States does.

DONVAN: So let me—let me interrupt you because I think I see where you’re going with the question, and I want to take it first to this side, because I think your question resonates—might be sympathetic to the argument they’re making. So I just want to give you—it’s really a question that’s challenging this side, but give you thirty seconds to respond to the gist of the question, then bring it to the other side.

HILLMAN: Well, I’ll just start and, I mean, this is one of the points I was going to make in summary, which is, look, a lot of the rest of the world shares a lot of the United States’ concerns with China. I mean, again, some of them may have come to that view more recently. We might have wanted them to get there earlier. But there’s no question that across Europe they share a lot of our concerns about what’s happening in China. So do many of our other trading partners—Canada, Mexico, et cetera. They understand and they agree with us that there are huge problems with China.

DONVAN: Rana.

HILLMAN: But what they do not share is the United States’ unilateral, rules-breaking tactic. So when we go down this road of unilateral tactics, of unilateral tariffs, and disdain for the World Trade Organization, and disdain for rules-based rules, and say no, no, no, we’re going to go to a might makes right system, we are effectively pushing away all of our allies that we most need to help us if we’re going to collectively take on the national security risk that is China.

DONVAN: Oops, I think I heard the sound bite from this debate.

MITTER: (Inaudible.) Let me just come off the back of that to mention one particular form of manufacturing we haven’t mentioned yet. Actually, Scott, I love to hear your response on this as well, where other countries, the European Union, Southeast Asia, many of the emerging economies of the world currently have to rely on China. And that is green energy transition—solar panels, wind turbines, and all of the manufacturing. And it’s huge, and it creates huge numbers of jobs. And it’s where the world is going, except, probably, for the United States in the very near future.

Under the Biden administration, for good or ill, there was a policy, the, you know, green new deal, the IRA, and so forth that put investment into that form of manufacturing. Much of the rest of the world is now going to have to be dependent on China because it doesn’t look as if there’s going to be a continuation of that particular manufacturing strand. Would you say that getting into that manufacturing strand, Scott, would be a good direction for the United States to go to produce a product that the rest of the world, including U.S. allies, wants to buy?

DONVAN: So you don’t have to immediately answer that question, but that question was fundamentally a challenge to your side, I think, by—as now encapsulated by your opponents, that the U.S. going it alone in this way will have a damaging relationship on our allies, in numerous ways. So either of you, or both of you, can join that conversation.

MOORE: Well, look, I shouldn’t say this at the Council of Foreign Relations, but Europe is a declining empire. It’s really sad to see what’s happening in Europe. Their growth rates have declined dramatically. The average person in West Virginia now has a higher income than the average person in most European countries. We’ve way, way outgrown them. We’ve shown them the model. And Europe has moved socialist. They’re a high tax, socialist continent that, if they keep on this path, they’ll just continue to dwindle in terms of their influence.

China—I mean, Europe has to make a decision because we have a clash of the two biggest economies in the world—the United States and China. And too often—you talk about, oh, gosh, we’re breaking these relationships. (Laughs.) Europe too often in just the last ten years has sided with China against the United States. I mean, how crazy is that, that it would side with the Chinese in these disputes against America, when we’re the—we’re the hub of world freedom? So I don’t know. I think China—Europe has to get their act together. There’s a new kind of sheriff in town. There are new rules. And they’re rules that will benefit everyone, but mostly they’ll benefit the United States.

DONVAN: Scott.

PAUL: Yeah. China broke the WTO. And so we have no responsibility—

MOORE: Exactly.

PAUL: —to follow it, because it is consensus based. It’s broken. It takes years to get anything. We’d sacrifice every last piece of our manufacturing base—

MOORE: It’s true.

PAUL: —if we waited for the WTO to take action.

With respect to green energy, which I think is an excellent point, that is why I believe it has to be a tariff-plus policy. The IRA expanded the global economic pie for clean energy goods, and to do it in a way where we’re not dependent on China. I think it’s dangerous for any country to dominate so much of a supply chain of any sort of industry. And so I agree that it should be tariffs, plus some investment and some collaboration there. But tariffs are an essential component there because China built up its solar industry at the expense of American efforts and other efforts around the globe.

DONVAN: In the far back of the room.

Q: Hi. I’m Stephen Ezell from the Information Technology and Innovation Foundation. Kudos to all the speakers for their excellent remarks.

Two quick questions for both sides. One, Stephen M., you seem to say that the tariffs are justified because of China’s fentanyl flow to the United States. If the flow of fentanyl from China to the United States dropped to zero percent tomorrow, would the justification for the 10 percent tariffs then be nullified, not applicable?

MOORE: Well, it’s not the only—you’re quite right. It’s not the only justification. But it certainly would help. I mean, if China were to say, look, we don’t want to kill American kids and we’re going to help you with this, that would be an important gesture. I’m not denying that there are all sorts of other factors that underlie the Trump tariffs. But that’s certainly one of them. I mean, the fact is that China does have much higher tariffs on us than we do on them. So it seems reasonable to me for Trump to use this reciprocity principle and say to China, if you don’t lower your tariffs on us, we’re going to increase our tariffs on you.

DONVAN: OK, and your second question.

Q: Jennifer, the Biden administration placed 100 percent tariffs on Chinese electric vehicles, 50 percent tariffs on legacy semiconductors and lithium ion batteries coming into the United States. Were those tariffs for the Biden administration justified because China was using unfair trade practices in those sectors? And if they were, then why aren’t 10 percent blanket tariffs to deal with all the other challenges to the U.S. manufacturing economy in all the other industries we have? Why aren’t that justified?

HILLMAN: So, again, an excellent question. My own view is there are—there is definitely a time and a place for tariffs. And, again, I have long been of the view that we absolutely should be doing tariffs. But, again, my criteria is, A, they need to be legal, to start with. And legal means you have to have a real investigation that really shows that there is evidence that indicates that there is a legal basis in which to impose the tariffs. And so to me that’s, you know, item number one.

Item number two, I think you’re exactly right, that when you go after a particular sector—and, again, you combine it with a lot of what the Biden administration did with respect to industrial policy—then you may have an effective tariff. So, again, as long as they are strategic and tailored to a given sector and paired with efforts to actually make a domestic industry more viable, more competitive, in strategic areas where we need that, I think tariffs absolutely can be justified. Again, there’s a lot of bells and whistles on some of the specific ones in the Biden administration, but as a general principle I think that’s the right road to go down.

DONVAN: Any other questions?

Q: Monique Mansoura with the MITRE Corporation.

With the primacy on national security, which I agree with, and if we’re willing to accept some deficits or reductions in economic growth, are there segments where we don’t yet have an industrial base that’s fit for mission that presents potentially an existential threat to a certain community? One of the things we’ve seen, pharmaceuticals for example. If we’re unable to get the medicines that we need for kids with cancer, for other diseases, does that present a potential near-term existential threat for a component of our community for which the switching costs will take time, and we’re not ready for?

DONVAN: Whew, another brilliant question, actually.

HILLMAN: I would—yeah.

DONVAN: That’s really interesting.

MOORE: Just one quick remark. I think we ought to start thinking about decoupling from China, especially when it comes to vital parts of our supply chain. So, you know, it’s probably time to start, you know, moving away from our trade with China in other countries that are friendlier, because—for precisely the reason you said, because they are an existential threat.

HILLMAN: But, to me, the number one item on that list is critical minerals. We need critical minerals in order to make the batteries that go into the EVS, in order to make a significant number of the components that go into all of our military—all of our military goods. So this is processing of lithium, nickel, cobalt, rare earth—rare earths, molybdenum, gallium, et cetera, et cetera. I mean, these are—

DONVAN: Again, Jennifer, can you point out, we don’t have those now.

HILLMAN: There is a whole set of these critical minerals, and they are critical to our military. They are critical, again, for batteries. They are critical to electric vehicles. They are critical to the green technology transition. We don’t have very many of those.

MOORE: We do too. We have—we have—

HILLMAN: We have a limited number of mining ability in that area. We have zero capacity to process those minerals. The vast majority of them, between 90 and 98 percent, are processed in China.

MOORE: We have $12 trillion worth of mineral resources. We have more mineral resources than virtually all the rest of the world combined. The reason we don’t—we are dependent on all these other countries is the stupidity that we haven’t allowed mining in this country for the last thirty years. We have to start mining for the—we have more of all of these metals that you just mentioned than virtually any other country in the world. We don’t need to get them from Ukraine. We don’t need to get them from Canada. We don’t need to get them from China. We have them in our own backyard in North Dakota, in South Dakota, in Montana, and Colorado. We are so resource-rich. Why in the world aren’t we mining for these resources? (Applause.) Doesn’t make any sense.

MITTER: On the decoupling question, and, you know, Stephen has mentioned that more than once, and the word de-risking is the one that Scott’s used there too. Would you specifically say that the big American companies, all of which are huge profit makers for shareholders here in the U.S. and which have global reach—Ford, Apple, Tesla—have essentially got to start making tracks at this point to leave China? Is that the basic bottom line that you’re putting to them? Is that not going to have a bottom line effect on their profits in the United States and on global prosperity?

DONVAN: Scott.

PAUL: Look, they’re being pushed out of China too. Let’s be clear about that. I mean, you know, it is a—it is a—Xi Jinping and his policies pushing them out in favor of Chinese national champions, and also the tariffs changing the cost equation.

MITTER: A lot of people carrying Apple’s smartphones in China though, Scott.

PAUL: I mean, they were the principal beneficiaries of this change twenty-five years ago to lower the tariffs. And, again, these are very agile, innovative firms. If Apple needs to make things in India instead of China, they will do so. If there’s incentives to do it in the United States, they will find a way to do it. It is a highly innovative country. But the status quo is not acceptable. Just the concentration of mineral processing or active pharmaceutical ingredients in a country that is adversarial is incredibly dangerous. The answer is not to say, OK, the status quo is fine. It’s to find a solution of that. Part of that is tariff application. Part of that is an industrial policy to bring those processes, that manufacturing to the United States as well.

DONVAN: Sir.

Q: Hi. Dan Mejia with the Associated Press.

I wanted to bring up the Thucydides trap. So, you know, we talk about national security, but when the U.S. targets China in all these different ways, including the tariffs—like, China specifically, and the campaign against Huawei, against one specific Chinese company, maybe not giving them full rights in the World Bank or IMF so they establish AIIB, you know, their own bank—I get why we do it, but at some point it could lead to, like, war, because they feel compelled, because they’re not being, quote, “respected.” Now, I get why we’re doing this in the U.S., but no one is the only superpower alone forever. So do we not eventually—

DONVAN: Are we asking for it?

Q: Yeah, are we asking for it?

DONVAN: Go ahead, Scott.

PAUL: I mean, this isn’t about the 10 percent tariff, obviously, but I’ll be happy to try to answer the question. You know, the Chinese Communist Party is not our friend. They do not want to be our friend. They took advantage of the United States and the global companies’ willingness to seek even higher profit margins in China. It resulted in trillions of dollars of wealth accumulating to them. The fact that we would want to unwind that is not going to compel China to try to enter a global conflict with the United States. (Laughs.) They’re going to have to face—there is going to be a reckoning for this in some ways. But this is not going to compel them to want to launch an attack in some way. Is that what—is that what your argument is? I cannot imagine that.

Q: I’m Sheridan Prasso. I work for Bloomberg News.

So as part of what was announced with the 10 percent tariffs on China was an end to the de minimis exemption. And we haven’t really discussed that this evening. And I wonder what the “no” people think about, should there be an end to the de minimis exemption? And if not, why?

HILLMAN: So the question related to the de minimis exception. So for those of you that don’t know that, right now if a package comes into the United States with a value of $800 or less you do not have to pay a tariff and you do not have to go through the full customs compliance, customs procedures that you would normally do for all other goods coming in.

DONVAN: So the fast fashion companies are depending on this, yeah.

HILLMAN: So all the fast fashion companies are taking advantage of it. And China in particular has really taken advantage of this, to the point where the initial announcement was that the de minimis exception would be eliminated. And what happened? Mountains of—mountains of packages at every post office across America. So Trump had temporarily rescind getting rid of the de minimis exception because there simply are not enough customs officers to possibly process that many shipments, in order to try to—again, just to get them through. So, again, the view is that we are going to leave the de minimis exception in place until we can beef up the customs authority’s ability to process as many packages as it would take if you get rid of the de minimis exception.

DONVAN: OK. I’m going to call a wrap on questions. I’m also going to recommend our recent debate on the impact of fast fashion on the economy, which was quite a good one. (Laughter.)

We’re going to move on. Thank you for all of your questions. They were all excellent. I really appreciate it. It doesn’t always happen. That was great. So thank you. We’re going to move on to our closing round. And in our closing round each of our four debaters has one more chance to stand up in the center and tell you one more time why you should be persuaded that they are making the better argument.

Scott, you’re up first. So you’re answering “yes” to the question, was Trump right to increase tariffs on Chinese imports? You’re closing, please.

PAUL: Right. Thank you, John. Thank you to my fellow debaters. Appreciated the conversation and the questions as well.

Once again, ladies and gentlemen, I believe Trump was absolutely correct in suggesting and imposing a 10 percent tariff on Chinese products, just as Joe Biden was correct in imposing them on some specific Chinese products, and in the prior Trump administration as well. For a couple of simple reasons. Number one, we do need desperately to de-risk our supply chains from China for national security reasons. Number two, we do need to defend our manufacturing base. I have a deep appreciation for the services economy, but you can’t mobilize a McDonald’s or a Chick-fil-A in a time of national crisis the way that you can mobilize a manufacturing facility or the skilled workforce that comes along with that. It’s simply irreplaceable. And we’ve got to the point where it’s dangerous and bare bones in some critical areas.

The third thing is that the tariffs can be effective and aren’t going to be economically damaging to our economy. We have a large, $30 trillion economy. We have a minimal amount of tariff on a slim amount of that. And so the overall impact on the PCE would be—would be negligible, quite honestly. And this would accelerate a trend that’s already underway among businesses for ABC, anywhere but China, understanding that Xi Jinping is pushing them out. We need to give them that final shove. Thank you, ladies and gentlemen.

DONVAN: Thank you, Scott. (Applause.)

Our next closing comes from Jennifer. Jennifer, you, again, are answering “no” to the question, was Trump right to increase tariffs on Chinese imports?

HILLMAN: OK. So I’m going to start by just saying, look, I agree we have extremely serious problems with China. Again, they’re cheating across every number of fronts. They absolutely present these security risks to the United States. The question is whether tariffs are the right tool in order to address it. And my bottom line answer is, no, they’re not. And instead, what we need is—because, why are tariffs not the right answer? For me, is because they fundamentally represent a unilateral, go-it-alone strategy by the United States, that we’re going to take on China all by ourselves. And my bottom line is there is no chance that by ourselves, using tariffs as our tool, that we are going to come anywhere close to addressing the serious issues that we have with China.

What we need to do instead is actually work with our allies and our partners. And that, for me, may include, as much as everyone else wants to say don’t even bother with the WTO, but bringing everybody together to challenge China at the WTO to say, China, all of your trading practices are a violation of the commitments that you, China, made to the WTO, that you made when you joined the WTO, and this is the many ways in which you’re violating it. Because, for whatever else it is, China cares about being viewed as a country in good standing at the WTO. But you don’t stop there. You immediately then go to your G-7 allies, to other international organizations to try to collectively put pressure on China to do a number of things, including push China to consume more at home.

Part of the reason why their goods are flooding the world is because they do not have enough domestic consumption. They do not have a strong enough safety net at home to allow their consumers to be able to go and spend on their own domestic demand, which would keep a lot of these goods from flooding out. We absolutely need to create clubs among the countries that are willing in things like critical minerals trade and other absolutely strategic products, that does not include China in those clubs, so that we can create strong and resilient supply chains in those goods that are critical to the United States, rather than using tariffs to impose this. So my bottom line is simply that tariffs alone and a go-it-alone strategy is asking the American consumer to bear all of the brunt of what the world’s problems are with China. And that’s not fair. (Applause.)

DONVAN: Stephen, you’re speaking for the last time from the “yes” side. You’re saying that Trump was right.

MOORE: Well, thank you to Open to Debate to have this fun debate. And I’ve learned a lot. I hope you have. And I was thinking what I would say. And I think what I’d say is I pray that you’re right and I’m wrong. (Laughter.) I hope I’m wrong and you’re right. But I am—I do think that we’re facing a very serious threat with respect to the Chinese. And you may be right also that tariffs are not the best way to retaliate against China. And I’m open—I’m all ears. I didn’t hear any really great solutions to what we’re going to do if we don’t do tariffs, but if there are other solutions to dealing with the Chinese threat then I’m certainly open to that.

You know, in the 1930s we traded and sold steel to the Japanese. And the Japanese then used that steel to kill Americans with the Japanese bombs. We were incredibly shortsighted back then. (Laughs.) Let’s not be shortsighted again about this real threat that we face. I would love to see China move in a less aggressive way. But Is anybody paying attention to the way they’re building up their military in a very, very hostile and menacing way? What they’re doing in the south sea is very, very dangerous. They will, in my opinion, invade Taiwan sometime in our lifetime. Again, I hope I’m wrong about that.

And so we have to be ready for that. We can’t have our eyes closed to this very real threat that China, you know, imposes on us. This gentleman made a really important point. The way we—the ultimate way we win is not by building up our military even larger—but we do obviously need a military—but through economic growth and prosperity, and just grow, grow, grow, and grow faster than China. We’re killing them in the technology areas. We have—you know, our magnificent seven have more value than all of the Chinese companies combined. So I would bet on America in this World War III that we’re facing. (Applause.)

DONVAN: Thank you, Stephen.

Rana, you get the last word. You’re arguing that Trump was not right to increase tariffs on Chinese imports.

MITTER: But I am going to argue that our proponents were quite right to come here and give us this excellent debate tonight. And I think everyone’s given some really great thoughts for all of us.

Let me finish with the last two minutes that I have in trying to answer the question about what solutions there might be if we don’t use tariffs. And let me just give you two. The first one is to go back, actually, to Jennifer’s point about services. Right now there are two major trading blocs and sets of norms and agreements that have any significance in East Asia, in China’s backyard. One is RCEP, the Regional Cooperative Economic Partnership, which basically is dominated by China, includes lots of U.S. allies, including Australia, for instance, but does not, of course, include the United States. Another one is the remnants of the old TPP, the Trans-Pacific Partnership, now the CPTPP. The United States is not in that one either.

I’m going to say it should be. And one of the reasons is that when it comes to digital services and the way in which digital norms are going to be decided and create huge amounts of standardization goods, which will then create growth and prosperity into the 2030s and beyond, the United States should be part of those sets of decisions. And right now, it isn’t. So that’s something that doesn’t involve any tariffs. It involves cooperation with allies that we could do.

The second one actually is, again, the point about manufacturing, and it’s about national security, which we all are concerned about here. So I’ll give you one word that I think you all know, which is AUKUS, the Australian, U.K., United States agreement on providing nuclear-powered submarines to patrol in the Indo-Pacific. It provides manufacturing capability. It provides new technological innovation. And it provides the chance for three major allies to work together to provide jobs and new defense capability. That doesn’t involve any tariffs. That involves getting together around the table and deciding what our common interests are when we think our values and our ideas are being challenged. Those sorts of ideas are where we should be going. We should not be putting up either random tariffs—and I think predictability, which Jennifer mentioned, is one of the big problems that we have. Where are they coming from and who are they going onto next?

But the very last thing I’ll say, as we finish here, is that I come back right at the end to where this debate started. The 10 percent tariffs that have been placed on China are simply not making China pay attention. China is not taking them seriously. And for that reason, not because they’re necessarily wrong or right in any moral sense, just because they are ineffective, they are not a policy that will get the United States and its many allies to the place where they need to be, which is peaceful, prosperous, and one in which it can engage with China in terms of interaction, without having to be worried or terrified about China being in the world. The United States and China will both be there for a very long time to come and we have to work out a way in which that can happen, without the use of tactics that simply can’t be predicted. (Applause.)

DONVAN: You know, you were—you were forty-five seconds over. (Laughs.)

MITTER: Sorry. Cheated.

DONVAN: And that is a wrap on this debate. I want to say, first of all, how much we enjoy partnering with the Council. I want to say that once again. But part of the reason is what I experienced here, the questions, as I mentioned, were just excellent. I could see everybody’s attention was constant and persistent. I only saw three people go to their phones—(laughter)—during the debate—during the course of the debate. And even then, only fleetingly. I know who you all are. I’ll speak with you afterwards.

But mostly, I want to thank what our debaters did here this evening. As I mentioned at the beginning, our goal is to demonstrate that argument is OK, that it’s real, that it’s natural, but that there are ways to do it in which you can be constructive and respectful to one another. And to our four debaters, Scott, and Steve, and Jennifer, and Rana, you all did that so excellently. We really, really appreciate what you did here tonight. So thank you so much. (Applause.) And thank all of you for coming out this evening. That is it. I’m John Donvan. And we will see you next time.

(END)

This is an uncorrected transcript.