China US photo: GT
While the Biden administration insists on levying tariffs on Chinese goods as leverage to contain China’s rise, Washington is unlikely to abandon that effect any time soon.
As tariffs imposed by the former Trump administration on more than $300 billion in Chinese imports are set to expire, the Biden administration will soon begin a review, necessary to prevent them from expiring, Bloomberg reported Sunday.
There have been growing calls for the United States to end its unprecedented tariff war with China, but the Biden administration’s past attitude toward trade with China suggests that Washington officials are unlikely to choose the path that will facilitate bilateral trade, even as the U.S. economy suffers from soaring inflation and mounting public complaints.
The US consumer price index for January rose 7.5% year-on-year, the highest rate in 40 years and the ninth consecutive month of inflation above 5%. Rather, it is the latest example of how tariffs imposed on Chinese goods have made American businesses and consumers bear the cost of tariffs in the form of higher prices for imported Chinese goods.
None of the results the US government originally hoped to achieve through punitive tariffs have materialized. China’s merchandise trade hit $6.05 trillion in 2021, up 30 percent year-on-year and marking a record high. Data from the U.S. Commerce Department showed the U.S. trade deficit with China widened 14.5% to $355.3 billion in 2021.
Unfortunately, however, the US reliance on Chinese supply chains has not changed the Biden administration’s outdated thinking that eliminating tariffs and ending the reckless trade war will favor and help China. And, a Bloomberg report said late last year that the Biden administration was considering a so-called Section 301 investigation into China’s industrial policies that could result in additional tariffs and restrictions on goods. Chinese investments.
The stubbornness of the United States stems from its political environment which prioritizes the ideological zero-sum game over economic fallout. Even though the US government clearly knows that the US economy will continue to suffer from additional tariffs, it is more inclined to avoid criticism of being seen as soft on China.
From China’s perspective, regardless of the trade policy adopted by the United States, China has its economic policy agenda to stabilize economic growth amid economic transformation and global uncertainties. And maintaining stable trade will help stabilize economic growth. In 2021, China’s net exports contributed 1.69% to its GDP, which grew 8.1% from 2020.
While delivering his annual work report to lawmakers on Saturday, Premier Li Keqiang said China will adopt a set of measures to stabilize foreign trade, while deepening multilateral and bilateral economic and trade cooperation with its partners. .
This year, the central government work report made no mention of trade with the United States, which does not mean that China-US trade is no longer important, but reflects the belief that bilateral trade that has withstood years of trade war should not get worse. . China will pay more attention to exploring trade with Regional Comprehensive Economic Partnership (RCEP) partners.
To some extent, what the United States decides on its trade policy with China will not have much impact on China’s trade prospects and the Chinese economy. And, the problems that are hampering the US economy now are largely on their own. Washington cannot solve its economic problems by continuing to blame China.