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China is waiting for Joe Biden to unfreeze Donald Trump’s trade tensions

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Democrats and Republicans share the belief that China is a contender for the economic, technological and geopolitical leadership of the Americas that must be contained. Both sides consider China’s treatment of Uyghurs and Hong Kong unpleasant. Both believe that China’s business practices and its subsidies to its state-owned enterprises are unfair and contrary to international agreements.

What trumps the trade war and its subsequent widening into an assault on most things related to China is to eliminate any complacency that American politicians and officials might have had about American superiority. and dramatically increase awareness that under Xi Jinping, China is much more openly assertive, and much more authoritarian, than it was under his former leadership.

The legacy of the trade war is tariffs on approximately $ 360 billion ($ 455 billion) in Chinese exports, a series of sanctions against Chinese businesses and individuals, restrictions on US exports, bans on Chinese students and university exchanges, some limited restrictions on capital flows. in China and ban certain Chinese technology companies from operating in the United States.

It is clear from their comments that Biden and members of his administration with responsibilities for certain aspects of the relationship want to create a more structured strategic framework for dealing with China to replace the publicity scandal of Trump’s policies; create a more civil relationship while developing more effective responses to Chinese ambitions.

Trump’s policies have generally not been effective; in fact, they have been counterproductive, and while costly for China, they have cost America even more in terms of lost economic output and jobs.

Its base tariffs broke its promise to reduce the United States’ trade deficit with China and its much-vaunted Phase 1 trade deal, under which China pledged to buy an additional $ 200 billion of American goods than in 2017, was a failure. . China has so far missed its commitments by about 40 percent.

The tariffs may have made Chinese exports less competitive, but were paid for by American businesses and consumers, they were in fact a tax of around $ 70 billion on American businesses and consumers and the administration has then had to distribute tens of billions of dollars to his farmers to compensate. for their lost export earnings.

It would appear that Biden is acknowledging that the tariffs are doing more harm to the US economy than to China, but the policy of removing them – especially since China has not honored the Phase 1 agreement – and the reality that they represent leverage in the larger relationship makes it unlikely that it will move unless China offers something very material and structural in return.

It is not at all clear what China has to offer. It is not going to change its treatment of Uyghurs, or loosen its ever-tighter control of Hong Kong, or remove subsidies for its state-owned enterprises, or suppress its technological and regional ambitions or stop trying to undermine the traditional alliances of the Americas ( although Trump was probably more effective than China on this front).

If he waits for Biden to take the first step, the wait could be long. He has focused more on building America’s economic and military capacity to counter China and on re-establishing the Americas’ traditional alliances and leading role in multilateral institutions despised by Trump than on early efforts to defeat them. Trump’s tangled legacy of trade and human rights.

The new administration has said it will conduct a full review of Trump’s policies before deciding on his strategies and tactics for dealing with China.

Earlier this week, Chinese Foreign Minister Wang Yi urged the United States to reopen a dialogue and distance itself from the policies of the Trump administration.

Earlier this week, Chinese Foreign Minister Wang Yi urged the United States to reopen a dialogue and distance itself from the policies of the Trump administration.Credit:UNTV

New US Secretary of State Antony Blinken has at least shown the administration to have a slightly more sophisticated understanding of the issues than his predecessor.

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There are contradictory aspects in the relationship, there are certainly competitive aspects and there are still cooperative aspects. But whether this is one of those aspects of the relationship, we need to be able to approach China from a position of strength, not a weakness, he said recently.

For now, the administration is more focused on filling gaps in his cabinet, dealing with the pandemic and other domestic issues, trying to mend relationships with his former allies whom Trump has despised and damaged. an outcome that China has attempted to exploit with some, but mixed, success and with the revival of the World Trade Organization and other multilateral institutions as any material reshuffle of the bilateral relationship.

At some point he will have to engage with China in further decoupling of economies and increased tensions would be very costly for both and add to global instability and threats.

Unless and until it can bring a much larger alliance front to the negotiating table, there is little chance that China will agree to change its trade practices, to make concessions on its treatment of Uyghurs and Hong Kong or to defuse tensions in southern China. Sea and therefore unlikely that the Biden administration is less suspicious of China or less combative than its predecessor.

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