Sean Brady: Trump is right about Chinese IP theft | TribLIVE.com
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Sean Brady: Trump is right about Chinese IP theft

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Between a professor of economics at a prestigious university and President Trump, who should you trust to choose his words carefully, check his sources and quote reliable figures? The answer might surprise you.

Case in point: George Mason University Professor Donald Boudreaux’s recent op-ed “Chinese IP ‘theft’ doesn’t justify Trump’s tariffs” (July 20, TribLIVE). Notice the word “theft” in quotes? That’s because Boudreaux believes that Trump is exaggerating the case for tariffs by exaggerating the extent of Chinese “theft.”

According to Boudreaux, “the extent of such theft is overblown” because “Much of this ‘theft’ is in fact in-kind taxation. Beijing requires that certain foreign companies seeking to do business in China share their intellectual property with the Chinese. Companies that attach a high value to the opportunity to do business in that large country often agree to these terms. But IP belonging to companies that are willing to forego the opportunity to operate in China is not stolen or otherwise acquired by the Chinese.”

Boudreaux concludes that IP acquired through forced technology transfers “does not count as stolen property.” 

There’s only one problem: Trump never said it did.

In fact, Trump has spoken about intellectual property trade issues with China over 100 times, in scripted and unscripted remarks, before small agri-business groups and before the General Assembly of the United Nations. In not one of those cases did he ever refer to forced technology transfers as “theft.” Indeed, on the seven occasions that Trump specifically addressed the issue of forced technology transfers, he was careful in every case to distinguish between forced technology transfers on the one hand and actual theft of intellectual property, including counterfeit goods, pirated software and cybertheft of trade secrets, on the other. That’s in keeping with his administration’s exhaustive report on Chinese trade practices, which devotes one chapter to “China’s Unfair Technology Transfer Regime for U.S. Companies in China” and a separate chapter to “Unauthorized Intrusions into U.S. Commercial Computer Networks and Cyber-Enabled Theft of Intellectual Property and Sensitive Commercial Information.”

Trump claims that the U.S. loses $300 billion a year from Chinese theft of intellectual property. In fact, that number is directly in the mid-range of estimates of losses from actual theft “just, by and of itself” (in Trump’s words) and does not include any estimated losses from forced technology transfers. Moreover Trump’s figure is actually 25% lower than the Obama administration’s official estimate of losses from Chinese cyber hacking theft of intellectual property, meaning that Trump is not only not exaggerating, he is actually being, well … conservative.

So the next time you see a professor schooling Trump for his “overblown” arguments, pay close attention. Because the one who needs to check his sources may not be the president.

Sean Brady is a financial technology entrepreneur in New York.

Categories: Opinion
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