Economy & Budget

Trump should reject lectures on jobs from Chinese pets like IBM

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Last month, shortly after Donald Trump’s surprise victory, IBM CEO Ginni Rometty sent the president-elect a letter. Writing with the kind of smarmy, corporate-tested spin that so many Americans (particularly Trump voters) have grown sick of, Rometty made an attempt to cozy up to the president-elect, urging him to (among other things) invest in retraining for “new collar jobs” in tech. Further, Rometty wrote, Trump should try to “bring money home to invest in America.”

Any number of reactions to this would be appropriate: one could say that Rometty is in no position to demand anything of Trump, given her company’s well-recorded coziness with Clinton this election cycle. One could also say someone should send the memo to Rometty that Trump was elected on promises to increase wages, not grow the labor supply in tech so her rich friends can cut them.

{mosads}But the most appropriate reaction would be laughter at the idea of IBM asking Trump to “bring money home,” as if they’re some sort of tribune of economic patriotism. Nothing could be further from the truth about Rometty’s company.

 

Why? Because IBM’s business strategy stretches about as far from the spirit of Trump’s administration as you can get in one very troubling area. Trump has already made waves in official Washington with his willingness to take a call from Taiwan’s president, and has publicly questioned the US’s “One China” policy, suggesting a far more hawkish line with Beijing. On the other hand, since Rometty was brought on to head IBM in 2012, it would be sadly accurate to describe her business strategy for the company as “Make China Great Again.”

But don’t take my word for it. Take the word of Shen Changxiang, a former Chinese leader on cybersecurity and recent coworker of Rometty’s. As reported by the New York Times last April, Changxiang began recently working with IBM to build, as the Times put it, a “a domestic tech industry that in the long run will no longer need to buy American products.” 

The foundation for this new Chinese tech industry would be IBM’s own technology, which the company has already sold to China in lavish quantities. According to filings from Beijing company Teamsun, IBM has already given China blueprints both for its own high end servers, and for the software that makes them operable. 

Now, you might say, so what, China has an unfortunate history of forcing companies to hand over their intellectual property in order to sell in their market — one of many trade imbalances that Trump will likely attempt to correct. And you would be correct. Except that according to the Times, IBM has gone above and beyond the call of duty in this respect. Indeed, so extravagant is IBM’s willingness to suck up to the Chinese that even the Obama administration itself might have worried about them, and voiced security concerns about their activities. Thus, IBM was forced to argue with a straight face that the Obama administration’s otherwise pitiful gestures toward national security amounted to a form of economic “protectionism” that was trying to stop poor old IBM from engaging in “free trade” with the poor, misunderstood Chinese.

The problem? Well, in a rare moment of backbone, the Obama administration had actually objected to the Chinese demanding the hand-over of American tech on the grounds of protecting our own national and economic security. Many companies avoided undermining the administration in this admitted feeble but welcome attempt to do its job, but not IBM. They sold their secrets to China with so little complaint that industry analysts worried it would create precedent for all sorts of other companies to surrender the secrets of their technology. Even the Times was forced to admit that there was a plausible case that IBM was “caving into Chinese demands, placing short-term business gains ahead of longer-term political and trade issues.”

And indeed they were. IBM’s representatives told China in March of 2015 that they would not only share technology with the Chinese, but would actively help build the country’s tech industry up! The person making this extraordinary proclamation? None other than Ginny Rometti herself. 

And this is the woman who wants Trump to tell people to bring money home to invest in America. Her hubris would be almost admirable if it were not so disgusting. Fortunately, an immediate, obvious, and concise response exists for Trump himself to offer:

“You first.”

Mytheos Holt (@MytheosHolt) is a Senior Fellow at the Institute for Liberty. He has worked as a speechwriter for Sen. John Barrasso (R-Wyo.), and as a writer for numerous conservative publications. Yes, Mytheos is his real name.


The views expressed by contributors are their own and not the views of The Hill.

Tags China Donald Trump Donald Trump IBM John Barrasso Mytheos Holt
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