China, the United States and the New Normal

I got an angry email yesterday in response to my having predicted a decline in manufacturing orders from China. The email accused me of “hating China” and wanting “to impede its peaceful” rise and of being “jealous of its progress.” All this because we have lately been writing how many of our law firm’s clients and so many others are leaving China, or looking to leave China.

We have been getting quite a lot of these sorts of emails lately.

Guess what people. Our posts about foreign companies leaving China have nothing to do with our feelings regarding China and everything to do with what we are hearing and seeing. Our statements of fact about companies leaving China are not being made out of animus to China, but out of a desire to tell the truth and to help foreign companies figure out what to do about China going forward. Life would be far easier and economically lucrative for us if foreign companies were not running for an exit from China.

We are telling the truth about companies looking to leave China because part of what we do is help companies legally fulfill their goals and their plans. My law firm’s international lawyers have been helping companies negotiate their exits from China, by among other things, helping them figure out where to go instead of or in addition to China. We also have been helping them set up in other countries, do deals involving other countries, protect their IP in other countries, and draft necessary contracts in other countries. In the last few months our international lawyers have been kept nearly as busy with Vietnam, Cambodia, Mexico, Indonesia, Thailand, Malaysia, Turkey, India and Pakistan as with China.

Since pretty much the inception of the US-China trade war we have seen it as more than a trade war. At first, we saw the US tariffs as an effort by the United States to get China to “open up” and “act right” on things like the internet and IP. But because we did not see China changing on these things, we did not see the trade war ending.

Vice-President Pence’s speech on China earlier this week has reinforced that the trade war between China and the US will not be ending soon, if ever. The New York Times has called that speech the Portent of a New Cold War between the United States and China, and China’s own Global Times wrote an article, Pence speech shows Washington’s tougher policy on China. Don’t blame us; we are just the messengers. Things are getting tough between China and the United States right now and the trade war is a symptom of that, not the disease.

The United States is trying to isolate China and remove it from the world of international trade. The new free trade agreement between the United States and Canada is further proof of this as it essentially blocks Canada and Mexico from engaging in free trade with China. See What Trump’s new trade pact signals about China. Word is that shutting out China is going to become a regular thing in all new U.S. trade agreements. See US Commerce’s Ross eyes anti-China ‘poison pill’ for new trade deals.

The above is why we will continue to write about what North American, Latin American, European, and Australian businesses should be doing to deal with the new normal regarding China. We are writing these things because we value our credibility and because we presume our readers value our no-holds barred advice — threatening emails or not.

For more on the new normal, check out China/U.S. Tariffs and How to Fight Back and U.S. Tariffs Against Vaping Imports from China: Don’t Let Your Industry go up in Smoke.