Marco Rubio Advocates Pacific Trade Deal As A Tool To Force China To Stop Economic Manipulation

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Marco Rubio appeared on CNBC's Squawk Box to discuss his plan for competing econmically with China in the 21st century, which he will outline in a major speech later today. "Our relationship with China," says Rubio, "will define what the 21st Century is going to look like."

"We shouldn't be doing anything that is counterproductive, starting a currency war, which would harm Americans," he explains. "But we also can't fall into this trap of believing that engagement alone and more trade will lead to a change in their behavior."

"China is governed by an autocratic communist regime. Very closed off, and they are strategic competitors, without a doubt," he continues. "I believe we need to not just increase defense spending but our posture in that region, and strengthen our ties."

"On the economic front, this week is a case of why we need to finally conclude this trade agreement with our allies in the Asia-pacific region,"

MARCO RUBIO: This is important, we were going to give this speech anyway. Our relationship with China will, in many ways, define what the 21st Century is going to look like.

CNBC HOST: If there was ever -- If you look up "frenemy," they could probably put it in the dictionary it has bee used so much, but that, it really exactly describes what we are with China. It is so essential that we retain good relationships in terms of trade. It is a market we need to sell into, and yet they steal our technology, they own us, they need to keep buying our Treasury [bonds], or yields could spike here to where we could barely sustain our debt, to just make hyperbolic statements about cutting off ties or protectionist statements. That doesn't work better than rolling over for the Chinese.

MARCO RUBIO: We shouldn't be doing anything that is counterproductive, starting a currency war, which would harm Americans, like increasing taxes on Americans.

But we also can't fall into this trap of believing that engagement alone and more trade will lead to a change in their behavior.

China is governed by an autocratic communist regime. Very closed off, and they are strategic competitors, without a doubt. And in the case of their military posture in the Asia-Pacific region, they are increasingly a strategic competitor and potential adversary.

They have taken a very aggressive position on the South China Sea, and it is one we should not accept. That is why I believe we need to not just increase defense spending but our posture in that region, and strengthen our ties.

And on the economic front, this week is a case of why we need to finally conclude this trade agreement with our allies in the Asia-Pacific region. These are developed economies, and if we could foster free trade, it won't be an exclusionary deal, but in order for China to join it, they will have to change their policies on imports, the way they manipulate exports, the currency manipulation, how they steal intellectual property and secrets from our companies.

They won't be able to join... the most powerful trading bloc in the world, unless they change behaviors.

It will be beneficial for them to do so, although it is hard because of the nature of that regime.

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