Former President of the U.S. Paulson Monday said that the trade dispute between the U.S. and China isn’t the end of the world, but rather the first small step in a much larger process of resolving differences.
Paulson, who was appointed by former President George W. Bush to rescue the U.S. financial system, now sits on the board of PNC Financial.
Paulson said on “America’s Newsroom” that he supports President Trump’s latest move to impose tariffs on steel and aluminum imports.
“The Chinese believe that they’ve got real capital here in America in the form of China’s debt. And if they start tightening up their capital controls and they start asking the Americans to pay for some of that debt, this will certainly raise tension,” he said.
Paulson said that the tariffs would only be implemented at a federal level, so it won’t have to interfere with work or school.
“What’s critical here is to sort of look past this fight for a moment. We’ve got this much more fundamental problem where China doesn’t play by the rules in a whole host of ways. They’re a bad actor on the global economy,” he said.
Paulson said the primary way for Washington and Beijing to defuse tensions is through discussions on disagreements on intellectual property and tech transfer, as well as on putting an end to forced technology transfers and copyright infringement.
He said he thinks that China’s President Xi Jinping, who visited the U.S. in December, is also looking for a solution.
Paulson noted that China has an ongoing appreciation against the dollar.
“They want to close the gap and basically make us pay for their debt,” he said.
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