President Biden has made a clean break with the policies of his predecessor in many areas. But not when it comes to trade with China.
The Biden administration isn’t scrapping a trade deal brokered by former President Donald Trump in the final year of his presidency. Instead, it plans to pressure China for not meeting its promises made under that deal.
The Biden administration also plans to broadly maintain Trump’s tariffs on U.S. imports of Chinese goods, though it will reopen an exclusion process to provide exemptions for certain goods.
In other words, key elements of Trump China trade policy will remain intact. In a major speech on the issue Monday, U.S. Trade Representative Katherine Tai said the administration won’t take any tools off the table, including the possibility of additional tariffs in the future.
“Above all else, we must defend — to the hilt — our economic interests,” Tai said in the speech, which came after a months-long internal review of U.S.-China trade policy.
“That means taking all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition,” she said.
Administration tries to thread a fine needle
The Biden team’s approach is the result of a growing bipartisan belief that previous tactics with China under Republican and Democratic presidents have not worked. Tai acknowledged that years of attempts to talk to China about its unfair trade practices had not led to substantive reforms, whether that dialogue happened through the World Trade Organization or through unilateral pressure, like the kind exerted by Trump.
Biden is trying to thread a fine needle — simultaneously pressure China over a key priority of Trump while at the same time, trying to avoid the appearance of endorsing anything done by Trump.
White House officials insist their trade vision is a marked departure from the Trump era. Ahead of Tai’s speech, they told reporters that Trump acted chaotically and unilaterally, isolating friends around the world. Biden’s team, on the other hand, is trying to work methodically, making investments at home to aid American workers while also working in conjunction with allies.
While it remains unclear if the United States’ traditional allies are keen to pressure China as loudly in public as the U.S. may want, Biden officials point to 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, as proof that multilateral action is possible and prudent.
‘Our object is not to inflame trade tensions with China’
The Biden administration has said the current Trump trade deal with China does not sufficiently address some of the larger systemic problems in the relationship. U.S. trade experts say the Chinese government has been providing large-scale subsidies to Chinese companies that gives them an unfair advantage in the global marketplace that hurts American companies and American workers.
Tai said she intends to have “frank” conversations with her Chinese counterpart in the coming days. And while it doesn’t appear that there’s a noticeable thaw in tensions between the two countries, the White House is keen to avoid a trade war.
“Our objective is not to inflame trade tensions with China,” Tai said. “Durable coexistence requires accountability and respect for the enormous consequences of our actions.”
White House officials say they would welcome change from China, but they recognize China may not change — and they need to craft a strategy that deals with China as it is, rather than as they wish it were.
So the Biden administration says it needs to 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 going to compete in the global market, we need to make equal or greater investments here at home.”