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Biden’s Vague Muddle of a Trade Policy for China

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07.10.2021

What should the Biden administration be doing about the U.S. trade and economic relationship with China? On Monday, U.S. Trade Representative Katherine Tai finally laid out the administration’s long-awaited strategy, the outcome of what was said to be months of internal deliberations. If that is so, it’s hard to know what U.S. officials spent all that time talking about; the product is less a policy or a strategy than a shrug—they’re not really sure what to do about China, and they’ll let you know when they figure it out.

The confusion is understandable. Over the past two decades, the United States has pursued two different approaches that have utterly failed by their own measures. One was a multilateral strategy to entangle China in a web of trade rules and make it a “responsible stakeholder” in the global economic system. The other was a brute force bilateral effort to use import tariffs and other sanctions to force a recalcitrant China to reduce its subsidies and other trade distortions. Neither did the slightest to alter Chinese economic behavior, which continues to be driven primarily by the internal ambitions and fears of its Communist Party leadership.

U.S. President Joe Biden’s blueprint, if it can be called such a thing, tries to split the difference. Tai made it clear that former President Donald Trump’s tariffs on Chinese imports would stay in place but promised to restart an “exclusion” process that should give relief to some U.S. companies harmed by the tariffs. She said Washington would continue to hold Beijing to targets for purchasing U.S.-made products negotiated under Trump, even though China has fallen far short of those commitments. She suggested the administration would relaunch negotiations with China over its industrial policies—a tactic that has failed repeatedly—but went out of her way to emphasize that the goal was “not to inflame trade tensions with China.” And while she only briefly mentioned the World Trade Organization (WTO), which was once the global arbiter of trade rules, she did promise to “work closely with our allies and like-minded partners toward building truly fair international trade that enables healthy competition.”

What should the Biden administration be doing about the U.S. trade and economic relationship with China? On Monday, U.S. Trade Representative Katherine Tai finally laid out the administration’s long-awaited strategy, the outcome of what was said to be months of internal deliberations. If that is so, it’s hard to know what U.S. officials spent all that time talking about; the product is less a policy or a strategy than a shrug—they’re not really sure what to do about China, and they’ll let you know when they figure it out.

The confusion is understandable. Over the past two decades, the United States has pursued two different approaches that have utterly failed by their own measures. One was a multilateral strategy to entangle China in a web of trade rules and make it a “responsible stakeholder” in the global economic system. The other was a brute force bilateral effort to use import tariffs and other sanctions to force a recalcitrant China to reduce its subsidies and other trade distortions. Neither did the slightest to alter Chinese economic behavior, which continues to be driven primarily by the internal ambitions and fears of its Communist Party leadership.

U.S.........

© Foreign Policy


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