President Trump’s tough approach to trade with China is a reminder that he’s an entrepreneur at heart. While Mr. Trump’s real-estate business is larger than the average independently held company, he has the instincts of a closely-held-business owner, which are quite different than those of a corporate chief executive.
Entrepreneurs—independent business owners—take calculated risks in pursuit of innovation, growth and job creation. That’s why their half of the economy is more dynamic than the half where risk-averse CEOs and boards prioritize share price and market share.
For decades, America’s approach to China’s bad behavior has been as cautious as a corporate CEO. Again and again, the U.S. has asked for concessions on currency manipulation and high tariffs, and called China out on its intellectual-property theft and flouting of World Trade Organization rules. Presidents from both parties have asked Beijing nicely to stop playing dirty. The Chinese always smile and say “yes,” and then continue doing what they’ve always done.
As a member of President George W. Bush’s Export Council, I traveled to China in 2004 to participate in talks that led nowhere. I watched the frustration of my colleagues as we tried the usual diplomatic approach and Chinese officials brushed us off. I recall thinking it was like Stockholm syndrome—we didn’t push harder because we didn’t want to upset the people who were clearly aspiring to dominate us.
Seeing Mr. Trump change the game and play hardball by imposing tariffs is unsettling to the cautious leaders of the corporate community, but small-business owners understand and appreciate it. The reasons are twofold: First, big businesses are the ones with something to lose since the Chinese government does business only with the biggest American companies. Second, big business is inherently risk-averse, and the president is taking risks by imposing tariffs.
The small-business community is watching President Trump’s gambit with admiration. They have little to lose and appreciate a man who knows that playing to win means embracing the risk of losing. Even farmers tend to cheer the president’s approach on principle—both because they relate to his style and because they know he is fighting for them, as Americans.
The political establishment is a lot like the big-business community—risk-averse and satisfied with a slow, safe pace. As long as the establishment (on the right or the left) was in charge of the U.S. relationship with China, nothing was going to change.
As a disrupter, Mr. Trump startles the political and corporate establishments. Their complaints about his approach to China are reminiscent of fears about President Nixon’s engagement in 1972.
Those of us in the small-business community recognize the president’s entrepreneurial grit, and his willingness to fight the bullies and the cheaters. That’s why we cheer his tough stance on China.
- Mr. Barreto is Chairman of The Latino Coalition. He served as administrator of the Small Business Administration, 2001-06.
Source: Wall Street Journal