Coming back to the trade challenges... We're seeing in the data that trade is simply being re-routed... from countries like Vietnam and Mexico, but... the ultimate demand and suppliers for that is... still the U.S. and China. It's... taking a longer route... that's going to increase trade cost, and... some Chinese companies... have also set up factories in Mexico and... Vietnam to... circumvent some of these... trade barriers, but it still has to come ultimately from countries like the U.S. and China.

I often get asked about decoupling, but it’s not a word that we’ve used. I always say in my talks with the business community, we’re not actively seeking to decouple two economies that have come together over 45 years, a $718 billion two-way trade relationship annually, with thousands, tens of thousands of companies interacting with each other. If either side is beginning to decouple, it’s more China than the United States. They’ve talked about it more – they don’t use the word – but that’s certainly what they’re signaling in some respects, and they’ve been taking actions far longer than we have.

China and the United States are two biggest economies. Our interests are so intertwined. The two countries are interdependent over the past decades since the establishment of diplomatic relations between our two countries. Our trade and business relations have made remarkable achievements, benefiting the two countries and benefiting the world. We are natural partners, because our economies are highly complementary.

[W]e started looking at how efficient are the different sources... also... at whose the biggest culprit. Today this is China... But... historically, the last 200 years the US and the EU have... contributed...

This argument carries some obvious implications for the next U.S. administration. First, as Sino-American rivalry heats up, winning (or at least not losing) will require more than tariffs, restrictions on Chinese students and high-tech firms, and bombastic speeches. It will also require preserving or regaining the lead in critical areas like artificial intelligence and 5G technology, which in turn means leveraging and incentivizing the impressive innovative capacity of U.S. firms and research institutions.

Because of the economic crisis, China and the United States are bound together. This is a totally new phenomenon, and nobody will fight for ideology anymore. It’s all about business.

In 2006... China, Japan, Canada, and Mexico—accounted for 60 percent of our worldwide trade deficit of $764 billion.

Meanwhile, needless to say, freedom, democracy, and human rights in China have not expanded. They have been severely curtailed as China has moved in a more authoritarian direction, and China has become increasingly aggressive on the global stage. The pendulum of conventional wisdom in Washington has now swung from being far too optimistic about the opportunities presented by unfettered trade with China to being far too hawkish about the threats posed by the richer, stronger, more authoritarian China that has been one result of that increased trade. In February 2020, the Brookings analyst Bruce Jones wrote that “China’s rise—to the position of the world’s second-largest economy, its largest energy consumer, and its number two defense spender—has unsettled global affairs” and that mobilizing “to confront the new realities of great power rivalry is the challenge for American statecraft in the period ahead.” A few months ago, my conservative colleague Senator Tom Cotton, Republican of Arkansas, compared the threat from China to the one posed by the Soviet Union during the Cold War: “Once again, America confronts a powerful totalitarian adversary that seeks to dominate Eurasia and remake the world order,” he argued. And just as Washington reorganized the U.S. national security architecture after World War II to prepare for conflict with Moscow, Cotton wrote, "today, America’s long-term economic, industrial, and technological efforts need to be updated to reflect the growing threat posed by Communist China." And just last month, Kurt Campbell, the U.S. National Security Council’s top Asia policy official, said that “the period that was broadly described as engagement [with China] has come to an end” and that going forward, “the dominant paradigm is going to be competition."

In 2006 the trade deficit with China reached $232 billion. ...more than $60 per month for every man, woman and child in America. ...In 2004 when the trade deficit... was $161 billion, it was... more than the $126 billion of income taxes paid by the bottom 75% of Americans.

In this regard, I hope the dry rubber products segment continues to chart a more creditable growth in exports. These are challenging times. On the external front, the United States-China trade conflict, if protracted, could affect global growth and demand. On the domestic front, the private sector has to step up investment to drive economic growth, especially in the downstream sector.

On a purely intellectual level, how does allowing China to constantly rig trade in its favor advance the core conservative goal of making markets more efficient? Markets do not run better when manufacturing shifts to China largely because of the actions of its government. Nor do they become more efficient when Chinese companies are given special privileges in global markets, while American companies must struggle to compete with unfairly traded goods.

So... there will be only a limited degree of reorganization, but... in the long run countries and industries that do it in a more sustainable way, making the network more robust, more dispersed, more resilient, will reap the benefit. But let's not underestimate the... seduction of immediate gains. So... despite all this hullabalu the final reorganization will be rather limited. I'm not saying that it shouldn't be done, but my guess is that it will be done in a limited way, because every time there's some disaster... When there was the famous Fukushima earthquake, the problem with the nuclear reactor... there were some sectors that saw... the end of the supply for... intermediate materials because there was one Japanese company that was supplying 70% of the world... Every time that happens, like the earthquake in Taiwan... several years before, everyone says... we have to change the supply chain... make it less concentrated... less complicated, and then... 2 years later we are back to square one. So I'm not too sure about how much change will happen to the global value chains. ...[T]he taste for global free trade will be diminished somewhat, but... on that we should... change the conversation, because... we—especially those who are concerned with the fate of developing countries, like the people that source—we need to talk about intelligent trade in a completely different way. ...[I]t's not just a simple dichotomous problem of free trade versus . ...[T]here are many different ways of organizing . ...There are many ways of regulating trade. Protectionism is only one way. ...[W]e do it with ... with programs... with, in the case of the US, defense policy, so... we need to change the conversation in a more nuanced way...

Some people are saying, 'Well, we're so competitive with China, we should end the economic relationship'. Well, the consequence of that would be 750,000 American families wouldn't be able to put dinner on the table.

Well, I don't know if China is any different, but our relationship with China is certainly different. We're in hock to the Chinese up to our eyeballs because of the war in Iraq, for one thing. They're holding hundreds of billions of dollars worth of our paper. We also are running hundred of billions of dollars worth of trade deficits with them, as we continue to import their junk with the lead paint on them and the poisoned pet food and export, you know, jobs to places where you can pay workers a dollar a month to turn out the stuff that we're buying from Wal-Mart. So I think our relationship with China has certainly changed. I think they're basically the same bunch of goons and thugs they've been for the last 50 years".