Donald Trump is not a protectionist. If he imposes tariffs on China or any other country that cheats, all he wants to do is defend America against unfair trade practices.

China are running trade deficits with the rest of the world. If you look at the U.S. trade deficit, it's close to $800 billion trade in goods. Half of that is with China, so it's a big part of the problem. And the problem with China, as opposed to, say, Canada, is that China cheats.

No one should be surprised just because somebody isn't successful 100 percent of the time.

The defining moment in American economic history is when Bill Clinton lobbied to get China into the World Trade Organization. It was the worst political and economic mistake in American history in the last 100 years.

The policy goal is to persuade China to stop cheating. But here's what's interesting - Donald Trump intuitively understands what things should be. I did a study in 2008 where I estimated the impact of China's unfair trade practices on their competitive advantage - the so-called China Price. You know what it came out to be? Forty-three percent. Forty-three percent - very close to what his intuition said we needed in order to equalize things.

We're going right down the toilet, and it's a made-in-China toilet. I teach MBAs. And I noticed, starting a few years after China joined the World Trade Organization, that a lot of my students were no longer employed. They were still coming to get their MBA, but they'd lost their jobs.

The really big problem with China is that there are the unfair trade practices, like currency manipulation, illegal export subsidies and the theft of intellectual property, but then there's also things that the WTO doesn't cover that it should, which is the use of sweat shops and pollution havens.