Donald Trump’s idea that trade is a zero-sum game is, of course, inane. Power, on the other hand, truly is zero-sum, and Trump is not wrong to see China as a significant challenge to the United States, given its size, history, and very different national values.
“Made in China 2025” should be viewed as the first shot in an upcoming tech war similar to the space race with the Soviet Union in the 1950s and 1960s that will have a major impact on both economies and on national security. The notion that tariffs are going to compel the Chinese to abandon the future and give up on their program of tech promotion is ridiculous. It’s simply not going to happen.
So what is the appropriate American response to “Made in China 2025?” As long as we maintain an open society and a market economy, we can’t beat the Chinese by building better barriers, so we need to go the other direction and play to our strengths. Specifically, we need to actively encourage talented people from all countries to feel welcome here, and we need to increase government funding for basic research. That’s how we dealt with Sputnik, and that’s what we should do again.
The problem is that large elements of the GOP hate immigrants and oppose additional government spending for anything other than border security and the military. That has to change, and quickly, if we are to compete successfully over the next decade.