Defense CEOs back Trump's new tariffs on China

By Tony Bertuca  / March 22, 2018

Leaders from some of the nation's top defense companies flanked President Trump today as he signed off on new tariffs aimed at punishing China for years of "unfair" trade practices and intellectual property theft.

Marillyn Hewson, the president and CEO of Lockheed Martin, was present at Trump's White House signing ceremony. Also in attendance was Tom Kennedy, the president and CEO of Raytheon; David Alexander, the president of General Atomics; and Roger Krone, the CEO of Leidos.

"We have a tremendous intellectual property theft going on . . . hundreds of billions of dollars and that's on a yearly basis," Trump said.

Trump asked Hewson to speak, noting she was among the nation's leading businesswomen and CEO of a company which sells the government "billions and billions of dollars' worth" of F-35 Joint Strike Fighters.

Hewson said she supported Trump's new actions on China, specifically focusing on intellectual property theft.

"As has been expressed, that is a threat to us," she said. "We very much welcome this action."

Trump signed a memorandum this week that directs the U.S. trade representative within the next 15 days to compile a list of recommended tariffs on Chinese imports. After a period of public comment, the administration will publish a final list of products and tariff increases, according to the memorandum.

Further, Trump directs the U.S. trade representative to pursue a "dispute settlement" in the World Trade Organization to address China's "discriminatory licensing practices."

Lastly, Trump is ordering the Treasury secretary to explore "restrictions" to address concerns about Chinese investment in cutting-edge technologies produced in the United States.

Still, Trump said during the signing ceremony that he views China as a "friend" and thanked the Chinese government for assisting the United States in setting up new diplomatic talks with North Korea.

"The word is reciprocal, that's the word I want everyone to remember," he said. "If they charge us, we charge them the same thing."

Pentagon officials have also been talking tough on China lately.

Mike Griffin, the under secretary of defense for research and engineering, said Tuesday that he views strategic competition with China as a key part of his job.

"There is a recognition that superpower competition is again on the rise and if the United States wants to maintain its position of global preeminence, we must leverage ourselves," he said. "Technical superiority in the United States does not come with your passport. We need to work hard and run faster."

Additionally, Eric Chewning, deputy assistant secretary of defense for manufacturing and industrial base policy, said the powers of the Committee on Foreign Investment in the United States should be broadened to protect U.S. technologies from being stolen or acquired by foreign adversaries like China.

China, he told the House Financial Services monetary policy and trade subcommittee March 15, has "an industrial policy that is designed to extract technology from Western companies, put up walls to defend their own industry so they can get global scale and then eventually out-compete our domestic industry. Ultimately, it's about protecting U.S. industry and putting appropriate value on intellectual property so that it can't be stolen through technology transfers."

Separately, Trump earlier this month ordered broad tariffs in steel and aluminum, but has said U.S. allies could likely be exempt.

That policy was far less popular with defense contractors. The Aerospace Industries Association, which represents Lockheed and other major defense companies, has urged Trump to reconsider the metal tariffs.

"America's aerospace and defense industry is deeply concerned that the anticipated tariffs on aluminum and steel will raise costs and disrupt the supply chain, putting U.S. global competitiveness at risk," AIA said in a statement.