The US Takes the Easy Road on China

The Wall Street Journal this month  caught up with President Trump’s softness on China, only six years late . The President’s long-standing chase for China deals has pushed the US to avoid hard choices, only to get burned later. The Trump administration hiked tariffs right away, then caved because they didn’t even see vulnerability on rare-earth magnets. There are other glaring blind spots now, starting with land versus pharma.   Somehow Chinese land ownership here may have become the Sino-American issue most discussed  outside the beltway. The PRC shouldn’t be allowed to own land near military sites or large amounts of farmland. But it hasn’t, doesn’t, and won’t . Many politicians around the country loudly trumpet solutions to what is currently a minor problem. No harm, no foul? When we simultaneously shy away from much tougher issues, there’s harm. A mainstay issue being suspiciously soft-played is pharmaceuticals. Our industry is dangerously dependent on China and companies are actively trying to make it worse. Dependence on some Chinese drugs and ingredients for drugs has been recognized since at least 2017 . Less recognized is that the leading source of our imports is European nations, now topped by Ireland , which are themselves facing China dependence . The top pharmaceutical companies are bent on slow suicide. They are pouring billions into drug development in China , for American and global use, increasing our reliance further. They’re feeding future competitors for the sake of near-term profit, sacrificing the long-term viability of their companies, not to mention the national interest. The outcome of such commercial engagement with the PRC is obvious ; they’re ignoring it. A year ago, the Trump administration wisely opened what was supposed to be a national security investigation  (Section 232) into pharmaceuticals. The result announced earlier this month  is comically bad. It excludes generics for a year, leaving China untouched. It’s essentially aimed at Western firms not cooperating with the President’s  effort to lower drug prices. We’re staring at land while Chinese tightens its grip on drugs. We’re doing something similar within technology. The first round of findings associated with a Section 232 inquiry into semiconductor imports  will have very little impact. Exports are the priority, with the Trump administration encouraging global sales of the “ American AI Technology Stack ,” featuring chips. This promises a payoff for two years or so but will then badly fail, in part due to Trump administration policies. It will fail primarily because Chinese firms will underprice US technology exports in China and elsewhere, as they do with so many products . The US “contribution” is to boost Chinese competitiveness by offering access to US servers and semiconductors they can’t yet make. Our export controls are so weak China gets chips anyway . We’re enabling a coming wave of cheap, higher end Chinese semiconductors and firms pushing sales to China are headed for a cliff. In autos, we’re right to block Chinese access. An advertising blitz hawking Chinese electric cars  may well be ultimately funded by Chinese firms, because foreign markets are the only place they make money. In March, domestic car sales fell 15 percent on year . They peaked in late 2024. March exports soared 74 percent on top of explosive 2025 growth. The share of China’s dealers making money never reaches 60 percent —China’s producing and dumping. Despite the magnet lesson, however, we still overlook supply chains behind final products. For example, machine tools play a role in autos and many industries. Chinese prominence in the US machine tool market would create a degree of dependence in all of them. This is certainly a goal for Beijing and it’s making progress—the PRC just passed long-time leader Germany  as the top machine tool exporter. No American action to date.   It’s a mistake to support a sector, only to risk Beijing strangling it by denying equipment or materials. It’s a serious mistake to say we want to lead in semiconductors while helping our main competitor improve. It’s a critical mistake to watch as China tightens its grip on pharmaceuticals. We’re patting ourselves on the back , while turning our back on what we need to do. The post The US Takes the Easy Road on China appeared first on American Enterprise Institute - AEI .