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Chinese Ex-Trade Minister Who Backed Trump Warns US That 'Dismantling' Global Trade Is Blowing Back On Ordinary Americans

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by Tyler Durden
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President Joe Biden in late February said "unprecedented action" is being taken in response to an emerging scenario where "China’s policies could flood our market with its vehicles, posing risks to our national security." He said at the time, "China is determined to dominate the future of the auto market, including by using unfair practice."

This is but one leading example of what Beijing has complained about as being hardline moves of Washington targeting Chinese goods and thus eroding the very free trade system it once led the world in establishing. This week China's former vice minister of foreign trade, Long Yongtu—who once expressed hope that Trump would get reelected as he's "easy to read"—reflected on the past few years of changes since the Trump administration.

He spoke of Washington-driven efforts which are resulting in rising protectionism and supply chain decoupling at an event ahead of the opening of the Boao Forum for Asia. His talk emphasized that ultimately Washington's anti-China trajectory is hurting ordinary Americans as Chinese companies scramble to buy up land in Mexico as a necessary alternative to being able to do business directly in the US. 

Long Yongtu, former Chinese vice minister for trade, via Xinhua

"These Chinese companies could have continued to make goods in China for America at reasonable prices, but now they have to bear the extra costs of migrating to Mexico, and US consumers are grappling with more expensive goods," Long explained, citing a seven-fold increase in Chinese investors purchasing land in Mexican industrial parks going back to 2019.

"It is the globalized economic and trade systems that are at stake, they were built by the US and the West after World War II, but now the US is dismantling the system," he continued.

The 81-year old Long, it must be remembered, served as China's lead negotiator during its 15-year talks to join the World Trade Organization over twenty years ago, which happened in 2001. During his fresh comments, Long said, "The WTO has been marginalized, and I think the most urgent task today is how countries can work together to strengthen the function of the WTO and carry out some necessary reforms."

A flurry of both US and international reports over the past couple years have amply demonstrated and documented the trend, replete with stories like the following in Economic Times:

Bill Chan had never set foot anywhere in Mexico, let alone the lonely stretch of desert in the north of the country where he abruptly decided to build a $300 million factory. But that seemed a trifling detail amid the pressure to adapt to a swiftly changing global economy.

It was January 2022, and Chan’s company, Man Wah Furniture Manufacturing, was confronting grave challenges in moving sofas from its factories in China to customers in the United States. Shipping prices were skyrocketing. Washington and Beijing were locked in a fierce trade war.

Man Wah, one of China’s largest furniture companies, was eager to make its products on the North American side of the Pacific. “Our main market is the United States,” said Chan, CEO of Man Wah’s Mexico subsidiary. “We don’t want to lose that market.”

That same objective explains why scores of major Chinese companies are investing aggressively in Mexico, taking advantage of an expansive North American trade deal. Tracing a path forged by Japanese and South Korean companies, Chinese firms are establishing factories that allow them to label their goods “Made in Mexico,” then trucking their products into the United States duty-free.

There are not just economic but potential geopolitical ramifications of the trend. If China is sweeping up vast property in Mexico for production, it raises questions over the extent to which in some cases Chinese government-affiliated companies could be 'on America's doorstep' in greater numbers. This would have serious ramifications in any future hot conflict scenario, for example in a new Taiwan crisis.

Long in his Tuesday comments at the Boao Forum urged that "ordinary Americans should be better informed on the manifold benefits of free trade, and that discussions should return to the realm of common sense and the proven and objective laws of economics and trade." He also declared that China's global reach represents "opportunity" and should not be seen in the West as a "threat" - a common refrain of Beijing.

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