The United States has spent the last four decades – “free trading” away millions of domestic jobs to everywhere else on the planet. Whether accidental or intentional on our part – the gigs left.
It was intentional on the part of all the world’s other governments. They aren’t nearly as free trade-y as we are – they rigged their laws to favor companies that came and stayed within their confines. And they would break the law – and our trade agreements – when that wasn’t crony enough.
This isn’t very nice of them – but you really can’t blame them. They’re only doing what’s best for them and theirs.
Put the blame on us – we have long been titanically stupid about of all of it.
Year after year, decade after decade, trade deal after trade deal – we allowed them to screw us to an ever increasing degree.
And now, after nearly a half century of allowing these not nice governments to build massive trade clout against us – we shouldn’t act surprised when they begin to press things further. By hook or by crook – by any means necessary.
And when they do, they can threaten…basically our entire $18+ trillion economy.
Like technology? Like this nice little tech sector thing we have going? South Korea doesn’t.
South Korea Fines Qualcomm $854 Million for Violating Competition Laws: “South Korea’s antitrust regulator fined Qualcomm Inc (QCOM.O) 1.03 trillion won ($854 million) for what it called unfair business practices in patent licensing and modem chip sales, a decision the U.S. chipmaker said it will challenge in court.”
Wait a minute, you’re thinking – South Korea’s an ally. Sure – up to a point.
But no one outside Korea is an ally – if they are at loggerheads with someone inside their country.
We have Qualcomm – they have Samsung. And they aren’t stupid – they don’t find patriotism nearly as distasteful as many here do. So they are screwing Qualcomm – to benefit Samsung.
And make no mistake – South Korea is screwing Qualcomm.
Qualcomm owns a bunch of patents which make an iPhone – more than just a rotary phone landline. Nigh all the cool things your iPhone does – it can do thanks to Qualcomm.
(For all of this technological prowess, Qualcomm charges Apple less than $20 per phone. A phone for which Apple charges you $800 minimum.)
South Korea’s Samsung – is jealous of Qualcomm’s tech and market prowess. But rather than try to beat them – they’ve enjoined them. In a massive example of Korean cronyism, Samsung’s government buddy is ridiculously pounding Qualcomm.
Basic Korean court procedures – as set up by their laws – were ignored or outright steamrolled. All to better steamroll Qualcomm. As we said, Qualcomm got screwed.
And that’s by relatively nice government South Korea. China, as we know, is a little less nice.
Remember how we described the evolution of the global fake-free-trade market? Where foreign nations were building up – to sandbag us? Yeah – China’s really good at it.
China Hits Qualcomm With $975 Million Fine: “(F)oreign technology companies have plowed billions into China in the hopes of tapping into a fast-growing market. Now that the country has the world’s most Internet users and its largest smartphone market, multinationals are bumping into a regulatory ceiling.
“The starkest sign of that came on Monday, when the American chip maker Qualcomm said it would pay $975 million for violating China’s antimonopoly law. As part of the deal, Qualcomm will also offer its licenses for third- and fourth-generation communications systems for high-speed wireless data to smartphones, at a sharp discount to what it charges companies elsewhere.
“For foreign companies in China, which have faced heightened scrutiny for corruption, monopolistic practices and tax evasion, it is a sign of the times.”
Get all that? China used foreign companies to build up their domestic market – and are now leveraging their domestic market to screw the foreign companies that made it possible.
And China’s fine-imposing entity – doesn’t really have any of the Korean courtroom niceties to ignore. Because they aren’t nearly as nice – being a Communist dictatorship and all. They simply decide to fine – and that’s it.
And they too are fans of patriotism – and cronyism. Korea has Samsung – China has Huawei.
Having the government cram competitors with absurd, unfounded billion dollar fines – certainly helps with Huawei’s “growing up.”
This is where President Donald Trump and his America First approach – really needs to come to the fore. China and South Korea are standing up for their companies – and screwing ours. We need to stand up for ours.
As bad as the international marketplace has gotten – we still far and away hold the leverage advantage. Candidate Trump campaigned acknowledging that – President Trump needs to implement that acknowledgement.
We need to address these not-so-nice foreign government abuses. Like…yesterday.
Because if China and South Korea are allowed to get away with this – they won’t stop with just this. And other countries will join the pig-pile – right on top of us.
For our tech sector – for our entire economy – acting now is a matter of life and death.
This is a guest post by Seton Motley Founder and President of Less Government