Comparing Immigration to China

President Trump has taken on two issues as his priority. The first was dealing with the illegal immigration crisis at our southern border. The second is the trade imbalance we have with China. Both seems independent from one another, yet there are many parallels that cannot be overlooked.

- Aug. 2019

It was president Nixon in 1973 decided to reach out to Communist China and establish a new trade relationship. The motive was two fold. It was during this cold war between the East and the West that Nixon saw an opening. He wanted to drive a wedge between the Soviet Union and China which were allies but had some disagreements over borders. The second motive was an economic one. It was felt by Nixon and his top advisors that the best way to maintain a peaceful coexistence with the growing Chinese regime, which is also a nuclear power, is to engage with them economically such that we are mutually benefited. There would be less likely of a nuclear confrontation if we are codependent in some fashion. The opening of China to the West was a huge step. The prospect of gaining a billion new customers for our products were the selling point to business leaders. The source of potential cheap labor was another. It was a win win for all.

On the immigration front, it was a growing problem in the US back in the 1970s. So much so that when Reagan was elected in 1980, he worked on a solution of giving amnesty to millions that were here. There was two parts to that agreement passed by Congress. First they would give them amnesty and second they were to build a wall on parts of our southern border where most of the illegal crossing was happening. Unfortunately, the wall was never completed. The illegal crossing continued to this day with an estimated of over half a million per year, some came over as tourists and over stay their VISA, some were smuggled in via containers but the majority just walked across our southern borders. It is estimated that there are 12-20 million undocumented immigrants here. In addition, they have families and children born here who are US citizens.

The story with China is that it was a fantastic success. China adopted the free market system of manufacturing and production. They provided cheap labor to America manufacturers. The country and people grew in wealth. This new wealth funded their military and their infrastructure. With the fall of the Soviet Union in 1990, China took its place as one of the remaining Super Power. However, behind this success story is some thing else. The communist party remained in control. Human rights were suppressed. The press was silenced. The government control the information and access. To this day. google is blocked in China. On the economic front, they also control the value of their currency, they subsidize every industry to help gain their competitiveness In a global market. They conduct unfair trade practices by stealing intellectual property, price dumping in the steel and solar industry, and violate child labor laws...all in the goal of dominance. Their new affluence due to trade imbalance, allow them to buy up foreign assets. They own much of our treasury notes. This was partly our own fault. Our country went on a deficit spending spree under multiple administrations. Now we are in debt to the world to the tune of over 22 trillion dollars.

This gives China tremendous power and leverage over all trade related issues. From a political point of view, this was not a bad scenario. After the cold war and the strategy of mutual assured destruction MAD, as a deterrent to global conflict, this new trade codependence between China and the US seem like a better alternative. Either side would want to avoid arm confrontation due to shared economic interests.

On the immigration front, the huge numbers of illegals are creating tension in many of our large cities. The economic impact is in terms of jobs and wage suppression at the lower end. Many service jobs like in fast food, restaurants and hotel and landscaping were taken over by undocumented immigrants. This influx kept the wages low which were beneficial to these businesses that wanted workers. They also add to the burden of the schools and hospitals. These workers are exploited by their employers for fear of deportation.

1. Economic

2. Rule of law

3. Fairness

The parallels between the China trade issue and the illegal immigrants are many but here are the top three. In economics, both lead to a loss of job and wages by American workers and farmers.

In the rule of law, both have elements of illegal activities, from drug smuggling and human trafficking, identity theft...to stealing intellectual property, currency manipulation and illegal dumping.

In the area of fairness, illegal immigrants are jumping the line of the legal immigration process. China in the area of international trade are creating an unfair playing field.

In 2016, the shocking election result of Trump changed the whole landscape. He won on his primary promise to change Washington DC and how business is conducted. He targeted two issues, illegal immigration and foreign trade. As I described, these two issues are both in the making for decades. They have many shares attributes. The bottom line is they are both issues that hurt Americans. Our businesses and our people are hurt by these illegal activities that were allowed to go unchecked.

It was the fault of Congress that allowed this to fester. For various reasons, both party when in power, failed to address them. It took a new President, who is an outsider and a businessman to recognize the threat and willing to deal with them head on.

Trump, like him or hate him, is a consequential president. He is taking on the big issues head on. No more kicking the can down the road.