Jim Cramer: "I almost hope China reneges on its trade promises"

• CNBC’s Jim Cramer lays out his case for holding a hard-line position in the U.S.-China trade war.
• “The economists will tell you that tariffs raise the cost of living. They’re not wrong ... but a lot of their predictions seem overblown. A lot of companies can do a lot to mitigate the damage,” the “Mad Money” host says.
• “I almost hope China reneges on its promises so that President Trump can ramp the tariffs back up and get an even better deal later on,” he says.

By Tyler Clifford

CNBC’s Jim Cramer on Thursday laid out his case for holding a hard-line position in the U.S.-China trade war.
The “Mad Money” host said he’s cynical about free trade as opposed to most Wall Street professionals, highlighting that China’s practices of subsidizing domestic companies has negatively impacted America’s manufacturing economy, including electronics, toys and even gift wrapping, which once was a moneymaker for his father, “Pops.”
“With each of these items, I see a group of towns that’s been decimated by permanent, normal trade relations with China, just like the towns that made gift wrap for my dad’s” business, he said.
Cramer is in favor of the U.S. tariffs in place on billions of dollars’ worth of imports from China as a means to force the country to change its unfair trading practices. 

For more than a year, the two countries have been engaged in a trade dispute that has escalated over time through a series of tit-for-tat duties.
The Trump administration on Thursday signaled that American and Chinese trade negotiators are nearing a “phase one” trade deal, which would be the first sign of concrete progress in the trade war. Without it, the U.S. plans to impose a new round of tariffs on more products.
“The economists will tell you that tariffs raise the cost of living. They’re not wrong — a tariff is a sales tax — but a lot of their predictions seem overblown,” he said. 

“A lot of companies can do a lot to mitigate the damage.”
Cramer argued that businesses most affected by duties on China, particularly the retail industry, can move operations out of China to avoid tariffs or force Chinese suppliers to bear the costs. 

That includes bringing manufacturing jobs back to the U.S. or relocating factories to countries with better trade relations, unlike China, which has taken advantage of the U.S. for decades, he said.
“If we’re going to trade jobs for cheap stuff, at the very least we should get a good exchange rate,” he added.
In 2018, the U.S. trade deficit with China was about $378 billion, according to the Office of the U.S. Trade Representative. 

Despite the on-again, off-again trade talks between the world’s largest economies, the S&P 500 has rallied more than 26% to new heights in 2019.
“This was the perfect moment to crack down on them because our economy’s so strong, their economy isn’t,” Cramer said. 

“I almost hope China reneges on its promises so that President Trump can ramp the tariffs back up and get an even better deal later on.”

Pr. Peter Navarro Highlights Case for More China Tariffs

By Alan Rappeport

Pr. Peter Navarro, senior trade adviser to President Trump.

WASHINGTON — A critical decision about China tariffs is looming, and Pr. Peter Navarro has re-emerged to share some thoughts on the matter.
President Trump must decide within days whether to proceed with the next round of tariffs on $160 billion of Chinese goods, which are slated to go into effect on Sunday. 

Pr. Navarro, a senior trade adviser to President Trump and a China skeptic, has cast doubt on the willingness of Beijing to meaningfully overhaul its trade practices and has advocated the tariffs as a tool to force China to change its behavior.
He’s not the only one making that point. 

To illustrate those concerns, Pr. Navarro harnessed his literary muse, Ron Vara, in a memo that is circulating in Washington. 

Sent from an email address belonging to Ron Vara, the memo highlights public commentary in favor of keeping the pressure on China with more tariffs.
“Much debate going on,” Ron Vara wrote, referring to the decision about whether to roll back or double down on China tariffs. 

“Here’s one side that has not been in focus. Thoughts?”
Ron Vara is the fictional character that Pr. Navarro created and cited as an expert more than a dozen times in five of his 13 books, where he offered searing critiques of China. 

Pr. Navarro confirmed the authenticity of the memo. 

It is not clear how widely it was distributed.

“On a daily basis, I speak to, or correspond with, people that I respect, and don’t necessarily agree with, to receive their thoughts on issues critical to American workers and the American people,” Pr. Navarro said. 

“This kind of active dialogue makes for the best possible decisions.”
He added: “Such a free exchange of ideas is essential to the success of an administration that is simultaneously putting up the best economic numbers in a half century and achieving success after success on the trade front.” 

He described a new trade deal with Canada and Mexico that is on track to become law as “just the latest big win.”
The memo does not show Pr. Navarro formally endorsing any views, but it lives up to his reputation for seeking to force deep structural changes to China’s economy through tariffs. 

It outlines the “keep tariffs argument,” which accuses China of stepping up American farm purchases of pork and soybeans only because of its domestic swine fever outbreak. 

And he claims that recent changes to Chinese law run counter to promises by the country’s officials to protect American intellectual property.
The memo also asserts that President Trump’s tariffs are protecting the United States economy without having any negative effect on growth or the stock market.
And, in a twist on market certainty, it suggests that President Trump could calm jittery investors by publicly backing away from a deal: “Get uncertainty out of the market by announcing NO deal until after the election and ride the tariffs to victory.”
Trump administration officials have been giving mixed signals about the fate of the tariffs and the significance of the Sunday deadline. 

Pr. Navarro, who has been pushing privately for the most ambitious deal possible, has made few public remarks about the China negotiations in recent weeks.
Amid the jockeying within the Trump administration, officials often try to arrange for television anchors or commentators to convey their views in hopes that President Trump will watch them and be persuaded.
Pr. Navarro’s memo goes on to cite a recent commentary from Jim Cramer, the CNBC host, who made the case that the strength of America’s economy means that it can withstand any drag from a more protracted trade dispute with China.
It also includes an analysis from Lawrence B. Lindsey, who was director of the National Economic Council under George W. Bush and makes the argument that another round of China tariffs would do minimal harm to the United States. 

Sen. Elizabeth Warren as president would be far tougher on China than Trump

• An Elizabeth Warren presidency would be really bad news for China, CNBC’s Jim Cramer predicts.
• Trump is willing to negotiate with Beijing, but Cramer doesn’t believe Sen. Warren would do so.
• “She is, I would say, far more extreme than Trump on what it would take to be able to have a trade deal,” Cramer says.

By Jessica Bursztynsky

Sen. Warren is far tougher on China than Trump

An Elizabeth Warren presidency would be really bad news for China, CNBC’s Jim Cramer said Monday.
“She is, I would say, far more extreme than Trump on what it would take to be able to have a trade deal,” Cramer said, discussing the Massachusetts senator’s 2020 Democratic nomination bid. 

“I don’t understand why the Chinese government doesn’t realize that if Sen. Elizabeth Warren comes in, there will be no talks whatsoever.”
Donald Trump’s administration is heading into another round of trade talks with Beijing, starting Thursday. 

However, Chinese officials are growing hesitant to pursue a broad trade deal that would include key commitments.
With Trump, Cramer said, Chinese officials have room to negotiate, so long as a deal is made. 

As part of his strategy, Trump has put tariffs on billions of dollars worth of Chinese goods in hopes of forcing Beijing to acquiesce to U.S. trade demands.
However, that would be a different story for Sen. Warren, said Cramer, adding she wouldn’t agree to talks with China because they “don’t believe in” religious freedom or global warming.
“She’s a much harder line than Trump,” Cramer said on “Squawk Box,” adding she likely won’t rollback the billions of dollars of tariffs introduced.
The “Mad Money” host recently said that China is likely safer with a Trump reelection. 

After Sen. Warren released her China approach, he said, “The Chinese better wake up to Sen. Warren. ‘President Warren’ would be tougher on China than Trump.”
Warren, in late July, released what she called an “economic patriotism” agenda, which outlined her approach on China. 

“We’ve let China get away with the suppression of pay and labor rights, poor environmental protections, and years of currency manipulation,” Warren wrote in a blog post.
On Thursday, Cramer said that if Sen. Bernie Sanders were to exit the 2020 presidential race, Sen. Warren would be free to loosen up her hard-line stance against Wall Street. 

Last month, Cramer first reported that he’s hearing the financial community saying about Warren that “she’s got to be stopped.” 

On Tuesday, Cramer said, “I’m not as fearful of Elizabeth Warren as Wall Street is.” 

He believes those fears are “getting overblown.”

China may be recognizing that revealing its world domination plan was a bad idea

• A report said Chinese officials are drafting a replacement for Made in China 2025.
• This would be a sign that it admits that this is about worldwide hegemony from the Chinese

By Berkeley Lovelace Jr.

Cramer says if China gets rid of 2025, it would be a miracle

China may now be recognizing its ambitious 2025 policy for world domination was a bad idea to reveal after all, CNBC's Jim Cramer argued Wednesday.
"It's rather remarkable that they agreed to get rid" of it, said the "Mad Money" host, shortly after The Wall Street Journal reported that Chinese officials are drafting a replacement for Made in China 2025. The plan, championed by Chinese dictator Xi Jinping, was meant to enhance China's competitiveness and foster the country's high-tech industries.
Peter Navarro, one of President Donald Trump's top trade advisors, has called for a repeal of China 2025, according to Cramer. 

"I think this would be a sign that it admits that this is about worldwide hegemony from the Chinese," Cramer said. 

Though he admitted he's unsure whether China will stick with working on a replacement.
According to the Journal, China is working on a new program — set to be introduced early next year — to provide increased access to the world's second-largest economy for overseas companies.
The report comes amid a 90-day truce between Washington and Beijing on any new tariffs on each other's goods while talks to settle their disputes continue. 

In the latest moves, the Trump administration in September levied 10 percent duties on $200 billion worth of goods from China, prompting Beijing to put tariffs on $60 billion worth of U.S. goods.
On "Squawk on the Street," Cramer said the White House needs to get China to admit that it does "reckless stealing," possibly referring to theft of intellectual property by China.
Cramer later added to his CNBC remarks on Twitter, by tweeting, "2025 must be renounced by word AND deed and the PRC must stop ordering espionage NOW."

Jim Cramer

✔@jimcramer

2025 must be renounced by word AND deed and the PRC must stop ordering espionage NOW

61

3:26 PM - Dec 12, 2018

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We are at war against the Chinese, and it's not just over trade

• CNBC's Jim Cramer does not expect a trade deal between the U.S. and China any time soon.
• President Trump and Chinese dictator Xi plan to meet around the G-20 summit later this month.

By Matthew J. Belvedere

President Donald Trump speaks during a press conference with Xi Jinping at the Great Hall of the People in Beijing on November 9, 2017.

CNBC's Jim Cramer said on Monday he does not expect a trade deal between the United States and China any time soon.
"I think we are at war against the Chinese, and it's not over. And the war is not just trade," Cramer said on "Squawk on the Street," taking cues from the speech that White House trade advisor Peter Navarro delivered last week.
Dr. Navarro said Friday any agreement between Washington and Beijing to end their trade dispute, which resulted in back-and-forth tariffs, will be on "President Donald J. Trump's terms, not Wall Street terms."
Cramer said the tone of Navarro's speech on economics reminded him of the kind of rhetoric that then-President Ronald Reagan used decades ago during the Cold War with Russia over nuclear arms.
"That's a speech that Reagan gave against the Soviet Union. And that didn't end well for the Soviet Union," said Cramer, the host of "Mad Money." 

"The G-20 is going to be so important."
Cramer was referencing the summit of the Group of 20 leaders in Buenos Aires, Argentina, at the end of the month when President Trump and Chinese dictator Xi Jinping plan to meet.
In September, the White House imposed its latest round of tariffs, totaling $200 billion of Chinese products. 

In response, China levied tariffs on $60 billion of U.S. goods.
President Trump has also threatened additional tariffs of $267 billion, which would basically cover the rest of all Chinese imports into the U.S.

Vice President Mike Pence's Churchill Moment

Mr Pence's speech blasting China was the most important of the Trump administration

• Vice President Pence's speech blasting China was a wake up call, CNBC's Jim Cramer says. 
• Pence's Oct. 4 address at Washington's Hudson Institute really freaked out the Chinese 
• It might as well have been written in 1947 about the Soviets 

By Berkeley Lovelace Jr.


Vice President Mike Pence addresses the Hudson Institute on the administration's policy towards China in Washington, DC, on October 4, 2018.
Vice President Mike Pence's speech blasting China was a "wake up call," and it had been in recent weeks "roiling" the stock market, according to CNBC's Jim Cramer.
Pence's Oct. 4 address at Washington's Hudson Institute "really freaked out the Chinese," Cramer said Wednesday on "Squawk Box."
"It might as well have been written in 1947 about the Soviets."
In the speech, the vice president accused China of "malign" efforts to undermine President Donald Trump and sway the November midterm elections from Republicans.
Cramer described the tone of the Pence speech as not just hawkish but a "declaration of economic war."
"It was the most important speech of the whole Trump administration. And it wasn't given by the president," said Cramer, the host of "Mad Money."
"It was the speech that Obama never gave," Cramer said.
"It was a recognition that it's a communist country" and not an ally of the U.S. because it "has none of the protections that democracies afford," he added.
Cramer said the Pence speech had been roiling stocks until recently, when concerns about the Federal Reserve's mission to raise interest rates took over the spotlight.
The U.S. and China are currently locked in a trade war that's seen each side imposing tariffs on each other's products.
However, Cramer said the divide between the world's two largest economic superpowers is bigger than trade.
"When you recognize that it's a communist country you're not talking about trying to sell more Prell [shampoo]. It was a wake up call," he said.

Remarks by Vice President Pence on the Administration’s Policy Toward China

October 4, 2018

The Hudson Institute

Washington, D.C.

11:07 A.M. EDT

THE VICE PRESIDENT: Thank you, Ken, for that kind introduction. To the Members of the Board of Trustees, to Dr. Michael Pillsbury, to our distinguished guests, and to all of you who, true to your mission in this place, “think about the future in unconventional ways” –- it is an honor to be back at the Hudson Institute.
For more than a half a century, this Institute has dedicated itself to “advancing global security, prosperity, and freedom.” And while Hudson’s hometowns have changed over the years, one thing has been constant: You have always advanced that vital truth, that American leadership lights the way.
And today, speaking of leadership, allow me to begin by bringing greetings from a great champion of American leadership at home and abroad –- I bring greetings from the 45th President of the United States of America, President Donald Trump. (Applause.)
From early in this administration, President Trump has made our relationship with China and President Xi a priority. On April 6th of last year, President Trump welcomed President Xi to Mar-a-Lago. On November 8th of last year, President Trump traveled to Beijing, where China’s leader welcomed him warmly.
Over the course of the past two years, our President has forged a strong personal relationship with the President of the People’s Republic of China, and they’ve worked closely on issues of common interest, most importantly the denuclearization of the Korean Peninsula.
But I come before you today because the American people deserve to know that, as we speak, Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States.
China is also applying this power in more proactive ways than ever before, to exert influence and interfere in the domestic policy and politics of this country.
Under President Trump’s leadership, the United States has taken decisive action to respond to China with American action, applying the principles and the policies long advocated in these halls.
In our National Security Strategy that the President Trump released last December, he described a new era of “great power competition.” Foreign nations have begun to, as we wrote, “reassert their influence regionally and globally,” and they are “contesting [America’s] geopolitical advantages and trying [in essence] to change the international order in their favor.”
In this strategy, President Trump made clear that the United States of America has adopted a new approach to China. We seek a relationship grounded in fairness, reciprocity, and respect for sovereignty, and we have taken strong and swift action to achieve that goal.
As the President said last year on his visit to China, in his words, “we have an opportunity to strengthen the relationship between our two countries and improve the lives of our citizens.” Our vision of the future is built on the best parts of our past, when America and China reached out to one another in a spirit of openness and friendship.
When our young nation went searching in the wake of the Revolutionary War for new markets for our exports, the Chinese people welcomed American traders laden with ginseng and fur.
When China suffered through indignities and exploitations during her so-called “Century of Humiliation,” America refused to join in, and advocated the “Open Door” policy, so that we could have freer trade with China, and preserve their sovereignty.
When American missionaries brought the good news to China’s shores, they were moved by the rich culture of an ancient and vibrant people. And not only did they spread their faith, but those same missionaries founded some of China’s first and finest universities.
When the Second World War arose, we stood together as allies in the fight against imperialism. And in that war’s aftermath, America ensured that China became a charter member of the United Nations, and a great shaper of the post-war world.
But soon after it took power in 1949, the Chinese Communist Party began to pursue authoritarian expansionism. It is remarkable to think that only five years after our nations had fought together, we fought each other in the mountains and valleys of the Korean Peninsula. My own father saw combat on that frontier of freedom.
But not even the brutal Korean War could diminish our mutual desire to restore the ties that for so long had bound our peoples together. China’s estrangement from the United States ended in 1972, and, soon after, we re-established diplomatic relations and began to open our economies to one another, and American universities began training a new generation of Chinese engineers, business leaders, scholars, and officials.
After the fall of the Soviet Union, we assumed that a free China was inevitable. Heady with optimism at the turn of the 21st Century, America agreed to give Beijing open access to our economy, and we brought China into the World Trade Organization.
Previous administrations made this choice in the hope that freedom in China would expand in all of its forms -– not just economically, but politically, with a newfound respect for classical liberal principles, private property, personal liberty, religious freedom — the entire family of human rights. But that hope has gone unfulfilled.
The dream of freedom remains distant for the Chinese people. And while Beijing still pays lip service to “reform and opening,” Deng Xiaoping’s famous policy now rings hollow.
Over the past 17 years, China’s GDP has grown nine-fold; it’s become the second-largest economy in the world. Much of this success was driven by American investment in China. And the Chinese Communist Party has also used an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfer, intellectual property theft, and industrial subsidies that are handed out like candy to foreign investment. These policies have built Beijing’s manufacturing base, at the expense of its competitors -– especially the United States of America.
China’s actions have contributed to a trade deficit with the United States that last year ran to $375 billion –- nearly half of our global trade deficit. As President Trump said just this week, in his words, “We rebuilt China” over the last 25 years.
Now, through the “Made in China 2025” plan, the Communist Party has set its sights on controlling 90 percent of the world’s most advanced industries, including robotics, biotechnology, and artificial intelligence. To win the commanding heights of the 21st century economy, Beijing has directed its bureaucrats and businesses to obtain American intellectual property –- the foundation of our economic leadership -– by any means necessary.
Beijing now requires many American businesses to hand over their trade secrets as the cost of doing business in China. It also coordinates and sponsors the acquisition of American firms to gain ownership of their creations. Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology –- including cutting-edge military blueprints. And using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale.
China now spends as much on its military as the rest of Asia combined, and Beijing has prioritized capabilities to erode America’s military advantages on land, at sea, in the air, and in space. China wants nothing less than to push the United States of America from the Western Pacific and attempt to prevent us from coming to the aid of our allies. But they will fail.
Beijing is also using its power like never before. Chinese ships routinely patrol around the Senkaku Islands, which are administered by Japan. And while China’s leader stood in the Rose Garden at the White House in 2015 and said that his country had, and I quote, “no intention to militarize” the South China Sea, today, Beijing has deployed advanced anti-ship and anti-air missiles atop an archipelago of military bases constructed on artificial islands.
China’s aggression was on display this week, when a Chinese naval vessel came within 45 yards of the USS Decatur as it conducted freedom-of-navigation operations in the South China Sea, forcing our ship to quickly maneuver to avoid collision. Despite such reckless harassment, the United States Navy will continue to fly, sail, and operate wherever international law allows and our national interests demand. We will not be intimidated and we will not stand down. (Applause.)
America had hoped that economic liberalization would bring China into a greater partnership with us and with the world. Instead, China has chosen economic aggression, which has in turn emboldened its growing military.
Nor, as we had hoped, has Beijing moved toward greater freedom for its own people. For a time, Beijing inched toward greater liberty and respect for human rights. But in recent years, China has taken a sharp U-turn toward control and oppression of its own people.
Today, China has built an unparalleled surveillance state, and it’s growing more expansive and intrusive – often with the help of U.S. technology. What they call the “Great Firewall of China” likewise grows higher, drastically restricting the free flow of information to the Chinese people.
And by 2020, China’s rulers aim to implement an Orwellian system premised on controlling virtually every facet of human life — the so-called “Social Credit Score.” In the words of that program’s official blueprint, it will “allow the trustworthy to roam everywhere under heaven, while making it hard for the discredited to take a single step.”
And when it comes to religious freedom, a new wave of persecution is crashing down on Chinese Christians, Buddhists, and Muslims.
Last month, Beijing shut down one of China’s largest underground churches. Across the country, authorities are tearing down crosses, burning bibles, and imprisoning believers. And Beijing has now reached a deal with the Vatican that gives the avowedly atheist Communist Party a direct role in appointing Catholic bishops. For China’s Christians, these are desperate times.
Beijing is also cracking down on Buddhism. Over the past decade, more than 150 Tibetan Buddhist monks have lit themselves on fire to protest China’s repression of their beliefs and their culture. And in Xinjiang, the Communist Party has imprisoned as many as one million Muslim Uyghurs in government camps where they endure around-the-clock brainwashing. Survivors of the camps have described their experiences as a deliberate attempt by Beijing to strangle Uyghur culture and stamp out the Muslim faith.
As history attests though, a country that oppresses its own people rarely stops there. And Beijing also aims to extend its reach across the wider world. As Hudson’s own Dr. Michael Pillsbury has written, “China has opposed the actions and goals of the U.S. government. Indeed, China is building its own relationships with America’s allies and enemies that contradict any peaceful or productive intentions of Beijing.”
In fact, China uses so-called “debt diplomacy” to expand its influence. Today, that country is offering hundreds of billions of dollars in infrastructure loans to governments from Asia to Africa to Europe and even Latin America. Yet the terms of those loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijing.
Just ask Sri Lanka, which took on massive debt to let Chinese state companies build a port of questionable commercial value. Two years ago, that country could no longer afford its payments, so Beijing pressured Sri Lanka to deliver the new port directly into Chinese hands. It may soon become a forward military base for China’s growing blue-water navy.
Within our own hemisphere, Beijing has extended a lifeline to the corrupt and incompetent Maduro regime in Venezuela that’s been oppressing its own people. They pledged $5 billion in questionable loans to be repaid with oil. China is also that country’s single largest creditor, saddling the Venezuelan people with more than $50 billion in debt, even as their democracy vanishes. Beijing is also impacting some nations’ politics by providing direct support to parties and candidates who promise to accommodate China’s strategic objectives.
And since last year alone, the Chinese Communist Party has convinced three Latin American nations to sever ties with Taipei and recognize Beijing. These actions threaten the stability of the Taiwan Strait, and the United States of America condemns these actions. And while our administration will continue to respect our One China Policy, as reflected in the three joint communiqués and the Taiwan Relations Act, America will always believe that Taiwan’s embrace of democracy shows a better path for all the Chinese people. (Applause.)
Now these are only a few of the ways that China has sought to advance its strategic interests across the world, with growing intensity and sophistication. Yet previous administrations all but ignored China’s actions. And in many cases, they abetted them. But those days are over.
Under President Trump’s leadership, the United States of America has been defending our interests with renewed American strength.
We’ve been making the strongest military in the history of the world stronger still. Earlier this year, President Trump signed into law the largest increase in our national defense since the days of Ronald Reagan -– $716 billion to extend the strength of the American military to every domain.
We’re modernizing our nuclear arsenal. We’re fielding and developing new cutting-edge fighters and bombers. We’re building a new generation of aircraft carriers and warships. We’re investing as never before in our armed forces. And this includes initiating the process to establish the United States Space Force to ensure our continued dominance in space, and we’ve taken action to authorize increased capability in the cyber world to build deterrence against our adversaries.
At President Trump’s direction, we’re also implementing tariffs on $250 billion in Chinese goods, with the highest tariffs specifically targeting the advanced industries that Beijing is trying to capture and control. And as the President has also made clear, we will levy even more tariffs, with the possibility of substantially more than doubling that number, unless a fair and reciprocal deal is made. (Applause.)
These actions — exercises in American strength — have had a major impact. China’s largest stock exchange fell by 25 percent in the first nine months of this year, in large part because our administration has been standing strong against Beijing’s trade practices.
As President Trump has made clear, we don’t want China’s markets to suffer. In fact, we want them to thrive. But the United States wants Beijing to pursue trade policies that are free, fair, and reciprocal. And we will continue to stand and demand that they do. (Applause.)
Sadly, China’s rulers, thus far, have refused to take that path. The American people deserve to know: In response to the strong stand that President Trump has taken, Beijing is pursuing a comprehensive and coordinated campaign to undermine support for the President, our agenda, and our nation’s most cherished ideals.
I want to tell you today what we know about China’s actions here at home — some of which we’ve gleaned from intelligence assessments, some of which are publicly available. But all of which are fact.
As I said before, as we speak, Beijing is employing a whole-of-government approach to advance its influence and benefit its interests. It’s employing this power in more proactive and coercive ways to interfere in the domestic policies of this country and to interfere in the politics of the United States.
The Chinese Communist Party is rewarding or coercing American businesses, movie studios, universities, think tanks, scholars, journalists, and local, state, and federal officials.
And worst of all, China has initiated an unprecedented effort to influence American public opinion, the 2018 elections, and the environment leading into the 2020 presidential elections. To put it bluntly, President Trump’s leadership is working; and China wants a different American President.
There can be no doubt: China is meddling in America’s democracy. As President Trump said just last week, we have, in his words, “found that China has been attempting to interfere in our upcoming [midterm] election[s].”
Our intelligence community says that “China is targeting U.S. state and local governments and officials to exploit any divisions between federal and local levels on policy. It’s using wedge issues, like trade tariffs, to advance Beijing’s political influence.”
In June, Beijing itself circulated a sensitive document, entitled “Propaganda and Censorship Notice.” It laid out its strategy. It stated that China must, in their words, “strike accurately and carefully, splitting apart different domestic groups” in the United States of America.
To that end, Beijing has mobilized covert actors, front groups, and propaganda outlets to shift Americans’ perception of Chinese policy. As a senior career member of our intelligence community told me just this week, what the Russians are doing pales in comparison to what China is doing across this country. And the American people deserve to know it.
Senior Chinese officials have also tried to influence business leaders to encourage them to condemn our trade actions, leveraging their desire to maintain their operations in China. In one recent example, China threatened to deny a business license for a major U.S. corporation if they refused to speak out against our administration’s policies.
And when it comes to influencing the midterms, you need only look at Beijing’s tariffs in response to ours. The tariffs imposed by China to date specifically targeted industries and states that would play an important role in the 2018 election. By one estimate, more than 80 percent of U.S. counties targeted by China voted for President Trump and I in 2016; now China wants to turn these voters against our administration.
And China is also directly appealing to the American voters. Last week, the Chinese government paid to have a multipage supplement inserted into the Des Moines Register –- the paper of record of the home state of our Ambassador to China, and a pivotal state in 2018 and 2020. The supplement, designed to look like the news articles, cast our trade policies as reckless and harmful to Iowans.
Fortunately, Americans aren’t buying it. For example, American farmers are standing with this President and are seeing real results from the strong stands that he’s taken, including this week’s U.S.-Mexico-Canada Agreement, where we’ve substantially opened North American markets to U.S. products. The USMCA is a great win for American farmers and American manufacturers. (Applause.)
But China’s actions aren’t focused solely on influencing our policies and politics. Beijing is also taking steps to exploit its economic leverage, and the allure of their large marketplace, to advance its influence over American businesses.
Beijing now requires American joint ventures that operate in China to establish what they call “party organizations” within their company, giving the Communist Party a voice –- and perhaps a veto -– in hiring and investment decisions.
Chinese authorities have also threatened U.S. companies that depict Taiwan as a distinct geographic entity, or that stray from Chinese policy on Tibet. Beijing compelled Delta Airlines to publicly apologize for not calling Taiwan a “province of China” on its website. And it pressured Marriott to fire a U.S. employee who merely liked a tweet about Tibet.
And Beijing routinely demands that Hollywood portray China in a strictly positive light. It punishes studios and producers that don’t. Beijing’s censors are quick to edit or outlaw movies that criticize China, even in minor ways. For the movie, “World War Z,” they had to cut the script’s mention of a virus because it originated in China. The movie, “Red Dawn” was digitally edited to make the villains North Korean, not Chinese.
But beyond business and entertainment, the Chinese Communist Party is also spending billions of dollars on propaganda outlets in the United States and, frankly, around the world.
China Radio International now broadcasts Beijing-friendly programs on over 30 U.S. outlets, many in major American cities. The China Global Television Network reaches more than 75 million Americans, and it gets its marching orders directly from its Communist Party masters. As China’s top leader put it during a visit to the network’s headquarters, and I quote, “The media run by the Party and the government are propaganda fronts and must have the Party as their surname.”
It’s for those reasons and that reality that, last month, the Department of Justice ordered that network to register as a foreign agent.
The Communist Party has also threatened and detained the Chinese family members of American journalists who pry too deep. And it’s blocked the websites of U.S. media organizations and made it harder for our journalists to get visas. This happened after the New York Times published investigative reports about the wealth of some of China’s leaders.
But the media isn’t the only place where the Chinese Communist Party seeks to foster a culture of censorship. The same is true across academia.
I mean, look no further than the Chinese Students and Scholars Association, of which there are more than 150 branches across America’s campuses. These groups help organize social events for some of the more than 430,000 Chinese nationals studying in the United States. They also alert Chinese consulates and embassies when Chinese students, and American schools, stray from the Communist Party line.
At the University of Maryland, a Chinese student recently spoke at her graduation of what she called, and I quote, the “fresh air of free speech” in America. The Communist Party’s official newspaper swiftly chastised her. She became the victim of a firestorm of criticism on China’s tightly-controlled social media, and her family back home was harassed. As for the university itself, its exchange program with China — one of the nation’s most extensive — suddenly turned from a flood to a trickle.
China exerts academic pressure in other ways, as well. Beijing provides generous funding to universities, think tanks, and scholars, with the understanding that they will avoid ideas that the Communist Party finds dangerous or offensive. China experts in particular know that their visas will be delayed or denied if their research contradicts Beijing’s talking points.
And even scholars and groups who avoid Chinese funding are targeted by that country, as the Hudson Institute found out firsthand. After you offered to host a speaker Beijing didn’t like, your website suffered a major cyberattack, originating from Shanghai. The Hudson Institute knows better than most that the Chinese Communist Party is trying to undermine academic freedom and the freedom of speech in America today.
These and other actions, taken as a whole, constitute an intensifying effort to shift American public opinion and policy away from the “America First” leadership of President Donald Trump.
But our message to China’s rulers is this: This President will not back down. (Applause.) The American people will not be swayed. And we will continue to stand strong for our security and our economy, even as we hope for improved relations with Beijing.
Our administration is going to continue to act decisively to protect America’s interests, American jobs, and American security.
As we rebuild our military, we will continue to assert American interests across the Indo-Pacific.
As we respond to China’s trade practices, we will continue to demand an economic relationship with China that is free, fair, and reciprocal. We will demand that Beijing break down its trade barriers, fulfill its obligations, fully open its economy — just as we have opened ours.
We’ll continue to take action against Beijing until the theft of American intellectual property ends once and for all. And we will continue to stand strong until Beijing stops the predatory practice of forced technology transfer. We will protect the private property interests of American enterprise. (Applause.)
And to advance our vision of a free and open Indo-Pacific, we’re building new and stronger bonds with nations that share our values across the region, from India to Samoa. Our relationships will flow from a spirit of respect built on partnership, not domination.
We’re forging new trade deals on a bilateral basis, just as last week President Trump signed an improved trade deal with South Korea. And we will soon begin historic negotiations for a bilateral free-trade deal with Japan. (Applause.)
I’m also pleased to report that we’re streamlining international development and finance programs. We’ll be giving foreign nations a just and transparent alternative to China’s debt-trap diplomacy. In fact, this week, President Trump will sign the BUILD Act into law.
Next month, it will be my privilege to represent the United States in Singapore and Papua New Guinea, at ASEAN and APEC. There, we will unveil new measures and programs to support a free and open Indo-Pacific. And on behalf of the President, I will deliver the message that America’s commitment to the Indo-Pacific has never been stronger. (Applause.)
Closer to home, to protect our interests, we’ve recently strengthened CFIUS — the Committee on Foreign Investment — heightening our scrutiny of Chinese investment in America to protect our national security from Beijing’s predatory actions.
And when it comes to Beijing’s malign influence and interference in American politics and policy, we will continue to expose it, no matter the form it takes. We will work with leaders at every level of society to defend our national interests and most cherished ideals. The American people will play the decisive role — and, in fact, they already are.
As we gather here, a new consensus is rising across America. More business leaders are thinking beyond the next quarter, and thinking twice before diving into the Chinese market if it means turning over their intellectual property or abetting Beijing’s oppression. But more must follow suit. For example, Google should immediately end development of the “Dragonfly” app that will strengthen Communist Party censorship and compromise the privacy of Chinese customers. (Applause.)
It’s also great to see more journalists reporting the truth without fear or favor, digging deep to find where China is interfering in our society, and why. And we hope that American and global news organizations will continue to join this effort on an increasing basis.
More scholars are also speaking out forcefully and defending academic freedom, and more universities and think tanks are mustering the courage to turn away Beijing’s easy money, recognizing that every dollar comes with a corresponding demand. And we’re confident that their ranks will grow.
And across the nation, the American people are growing in vigilance, with a newfound appreciation for our administration’s actions and the President’s leadership to reset America’s economic and strategic relationship with China. Americans stand strong behind a President that’s putting America first.
And under President Trump’s leadership, I can assure you, America will stay the course. China should know that the American people and their elected officials in both parties are resolved.
As our National Security Strategy states: We should remember that “Competition does not always mean hostility,” nor does it have to. The President has made clear, we want a constructive relationship with Beijing where our prosperity and security grow together, not apart. While Beijing has been moving further away from this vision, China’s rulers can still change course and return to the spirit of reform and opening that characterize the beginning of this relationship decades ago. The American people want nothing more; and the Chinese people deserve nothing less.
The great Chinese storyteller Lu Xun often lamented that his country, and he wrote, “has either looked down at foreigners as brutes, or up to them as saints,” but never “as equals.” Today, America is reaching out our hand to China. And we hope that soon, Beijing will reach back with deeds, not words, and with renewed respect for America. But be assured: we will not relent until our relationship with China is grounded in fairness, reciprocity, and respect for our sovereignty. (Applause.)
There is an ancient Chinese proverb that reads, “Men see only the present, but heaven sees the future.” As we go forward, let us pursue a future of peace and prosperity with resolve and faith. Faith in President Trump’s leadership and vision, and the relationship that he has forged with China’s president. Faith in the enduring friendship between the American people and the Chinese people. And Faith that heaven sees the future — and by God’s grace, America and China will meet that future together.
Thank you. God bless you. And God bless the United States of America. (Applause.)

China is more of a paper tiger than people think, and that plays into President Trump's hand on trade

• The U.S. trade war has shown that China is not impervious to the measures being brought to bear by President Trump
• Overnight, the Shanghai composite tanked 3.7 percent on the first trading day back after being closed for a weeklong Chinese holiday.

By Matthew J. Belvedere

U.S. President Donald Trump and Chinese dictator Xi Jinping

President Donald Trump's approach to levying tariffs on China in hopes of applying enough economic pressure to get Beijing to change its ways on trade has a better chance of working than many people expect, CNBC's Jim Cramer said Monday.
"I think the president is right. I favor tariffs against the Chinese because I think they're far more of a paper tiger than people realize," Cramer said, contending the world's second-largest economy and stock market are more vulnerable than the mainstream media depicts. 

The term "paper tiger" refers to an outwardly powerful or dangerous force that's actually inwardly weak or ineffectual.
"The intelligentsia in this country [the U.S.] has decided that China is all-powerful and we're all weak. Empirically, that's not the case, particularly when you look at the Chinese stock market, which does matter," Cramer said on "Squawk on the Street."
The U.S. trade war has shown that China is not impervious to the measures being brought to bear by Trump, Cramer said. 

"They may be communist, but they have a capitalist bear market going there."
There's a school of thought that the volatile Chinese stock market is not an important indicator of the health of China's economy because households there don't have much of their wealth invested.
"We can think that that doesn't matter but that's cause we're being elitist. And I think that's a big mistake," Cramer said.
Overnight, the Shanghai composite tanked 3.7 percent on the first trading day back after being closed for a weeklong Chinese holiday. 

Following weakness last week across Asia, Europe and on Wall Street, that sharp decline was being viewed as a catch-up move. 

The Shanghai composite has dropped nearly 18 percent year-to-date.
Against a backdrop of persistent trade concerns and a sign that more stimulus is needed, China's central bank on Sunday cut for the fourth time this year the amount of cash banks need to have on hand.