President Biden has broken with the policies of his predecessor in many areas. But not when it comes to doing business with China.
The Biden administration is not rescinding a trade deal brokered by former President Donald Trump in the last year of his presidency. Instead, he plans to pressure China not to honor its promises made under this deal.
The Biden administration also plans to globally maintain Trump’s tariffs on U.S. imports of Chinese goods, although it will reopen an exclusion process to grant exemptions for certain products.
In other words, key elements of Trump China’s trade policy will remain intact. In a major speech on the matter on Monday, U.S. Trade Representative Katherine Tai said the administration would not take any tools off the table, including the possibility of additional tariffs in the future.
“First and foremost, we must defend – to the end – our economic interests,” Tai said in the speech, which came after a months-long internal review of US-China trade policy.
“It means taking whatever steps are necessary to protect ourselves from the waves of damage inflicted over the years by unfair competition,” she said.
Administration tries to thread a fine needle
Team Biden’s approach is the result of a growing bipartisan belief that previous tactics with China under Republican and Democratic presidents have not worked. Tai admitted that years of trying to talk to China about its unfair trade practices had not led to substantive reforms, whether that dialogue took place through the World Trade Organization or through the World Trade Organization. unilateral pressures, such as those exerted by Trump.
Biden is trying to thread a fine needle – simultaneously pressuring China on a key Trump priority while trying to avoid the appearance of approving anything Trump does.
White House officials insist their business vision is a marked departure from the Trump era. Before Tai’s speech, they told reporters that Trump acted chaotically and one-sidedly, isolating friends around the world. Biden’s team, meanwhile, are trying to work methodically, investing in their homes to help American workers while also working collaboratively with allies.
While it is not clear whether the traditional allies of the United States wish to pressure China as hard in public as the United States wishes, Biden officials stress. recent commitments between the United States and the European Union to strengthen the semiconductor supply chain and work together to collectively pressure China on its trade practices, demonstrating that multilateral action is possible and prudent.
“Our goal is not to fuel trade tensions with China”
The Biden administration has said that Trump’s current trade deal with China does not sufficiently address some of the relationship’s most important systemic issues. US trade experts claim that the Chinese government has given large-scale subsidies to Chinese companies, giving them an unfair advantage in the global market that hurts American companies and American workers.
Tai said she plans to have “frank” conversations with her Chinese counterpart in the coming days. And while there doesn’t appear to be a noticeable thaw in tensions between the two countries, the White House is keen to avoid a trade war.
“Our goal is not to stir up trade tensions with China,” Tai said. “Sustainable coexistence requires responsibility and respect for the enormous consequences of our actions. ”
White House officials say they would welcome China’s change, but they recognize that China may not change – and they need to craft a strategy that deals with China as it is, rather than as they wish it to be.
The Biden administration therefore says it must prioritize investments in key domestic sectors to ensure the United States remains competitive.
“China and other countries have been investing in their infrastructure for decades,” Tai said. “If we are to be competitive in the global market, we have to make equal or greater investments here at home. ”