Tariff debate reveals Biden’s difficulties with China trade

WASHINGTON — President Biden’s decision on Monday to work with his Asian partners to form an anti-China economic bloc comes at a time when his administration is frustrated over its economic approach to Beijing. Some White House advisers have told the president that Trump—the policies of the times he criticized—and others who risk seeing Biden as a weak person to China if he repents.

Some officials say the U.S.-China trade relationship is still being defined by policies set by President Donald J. Trump, including tariffs and trade commitments on more than $360 billion of goods signed by the U.S. and China in early 2020. I am frustrated by the fact. .

Concerns about America’s economic approach to China take on renewed urgency amid rapid inflation. Treasury Secretary Janet L. Yellen and other officials argued that full tariffs served little strategic purpose and could be lifted at least partially to ease the financial burden on businesses and consumers.

However, the idea met resistance from some senior White House aides, US trade representatives and other senior administration officials, such as labor groups. They argue that lifting tariffs implemented to punish China for its economic practices would constitute a unilateral disarmament given that China has not yet addressed many of the policies that triggered the tariffs in the first place. As the midterm elections approach, some administration officials are concerned that tariff cuts will leave Democrats vulnerable to political attack, according to interviews with more than a dozen former and current officials.

business community lose patience That’s because Biden hasn’t had a clear trade strategy for nearly a year and a half. Management complained that the lack of clarity made it difficult to decide whether to continue investing in its key market, China.

The Russian invasion of Ukraine made it more difficult to find a way to counter China’s trade practices. A senior administration official said the U.S. was originally moving toward changing its trade relationship with China in early 2022, but felt it was prudent to see how the situation in Ukraine played out in relation to the situation in Ukraine as China formed an alliance with Moscow. The global economy and the US alliance.

Some elements of the administration’s trade strategy are getting clearer this week. Former Vice President Biden announced Monday in Japan that the United States will begin talks with a dozen countries to develop a new economic system for the Indo-Pacific region. Countries aim to form a bloc that provides early warning systems for supply chain problems, encourages industry to decarbonize, and provides US companies with trusted Asian partners outside of China.

The framework included market access common to most trade deals that proved difficult for many Democrats after the United States withdrew from the Trans-Pacific Partnership, a trade agreement signed by President Barack Obama. does not include any binding commitments to

US officials say goals for the framework are ambitious and include raising labor and environmental standards and creating new guidelines for cross-border data flows. However, some analysts have questioned whether the framework could facilitate these changes without giving Asian countries access to US markets, which is usually an incentive for trade agreements. And US labor groups are already vigilant that some promises could lead to further outsourcing to US industries.

The framework also does not seek to directly shape trade with China. Many Biden administration officials have concluded that talks with China, like negotiations at the World Trade Organization (WTO), are largely pointless. Instead, they say they are trying to change the environment to fight China by rebuilding alliances and investing more in the US through a trillion-dollar infrastructure spending bill.

Senior US officials share a view similar to that of senior Trump administration officials that the world’s dependence on China’s economy has given China enormous strategic leverage. A classified China strategy, mostly completed last fall, argues that it is important for US security to segregate some industries and diversify supply chains, say those versed in the strategy.

The administration was due to get a sneak peek at its secret strategy in a key speech last fall, setting out China’s economic and security goals anticipated by US officials and Chinese experts. The White House initially considered Biden’s speech, but chose Anthony J. Blinken as Secretary of State.

However, the speech, which revolves around the slogan of “invest, sort and compete,” according to those familiar with it, has been delayed for a number of reasons, including the Ukraine war and Blinken’s contracting Covid-19 this month. Some Chinese experts in Washington have interpreted the delay as another sign of uncertainty over Chinese policy, but US officials argue that this is not the case.

Prime Minister Blinken is due to speak in China shortly after returning from Japan with former Vice President Biden, according to sources familiar with the plan.

They say in their speeches they are avoiding talking explicitly about how the administration will deal with Trump’s tariffs. Businesses have long complained that they are hurt. American company their consumers rather than China. Given that prices are rising at the fastest rate in 40 years, these concerns have become a new urgency. The White House is struggling to explain how it can mitigate skyrocketing costs other than relying on the Fed.

But Republicans and Democrats who want a more aggressive policy towards China, and some US companies doing business in China, will be bleed if Biden eases tariffs.

Florida Republican Senator Marco Rubio said, “We need to rebuild American industry, not just reward companies that keep their supply chains in China.” negative vote Amendments to the law to allow for the imposition of customs duties.

At a press conference in Japan on Monday, former Vice President Joe Biden said he would meet when Prime Minister Yellen returns from a visit to discuss her request to remove some of the Chinese tariffs.

“We are considering it,” the president said. “We did not impose any such tariffs. It is being considered as it was imposed by the previous administration,” he said.

Public divisions among Biden officials have been rare, but the debate over tariffs has been open to the public.

Wendy Cutler, vice president of the Asia Society Policy Institute and former US trade negotiator, said, “There are clearly different views in the administration and they are coming to the surface. “There are people who think the tariffs didn’t work and contributed to inflation. Then the trade negotiators say, ‘Why are we giving up on them now? They are good leverage.’”

The debate over when and how these tariffs should be adjusted reflects a larger debate over whether globalized trade has done more to help or harm Americans, and whether Democrats should approach trade.

US Trade Representative Katherine Tai; Tom Vilsack, Minister of Agriculture; Mr. Sullivan and others have been opposed to the elimination of tariffs. Yellen, Commerce Secretary Gina Raimondo and other officials pointed to the benefits of the adjustment for businesses and consumers, said those familiar with the discussion.

According to sources familiar with her ideas, Yellen has long been skeptical of tariffs and has become more frustrated with the pace of progress in trade development. She argued last week that some tariffs should be lifted as a way to offset price increases.

“You can get some relief by cutting some items,” Yellen said, explaining that tariffs are hurting consumers and businesses. “There are many opinions, but we have not yet settled or agreed on where to put the tariffs.”

Dali Singh, Assistant Secretary of State for National Security, said more bluntly in a webinar on April 21. “We’ve inherited these tariffs, and we may have created some bargaining leverage, but that doesn’t serve our strategic purpose,” he said.

“Those tariffs don’t apply very often,” Singh said, for products that don’t strengthen critical supply chains or support national security. “Why impose tariffs on bicycles, clothing and underwear?”

However, the labor leaders progressive Democrats Some industry representatives have made various arguments to maintain strict tariffs. pointing to data It shows that imports from China are not the main driver of inflation.

Congressman Scott N. Paul said, “It is not politically wise in any way for a Democrat president to eliminate Republican tariffs and basically provide free handouts to the Chinese Communist Party.” Chairman of the Alliance for American Manufacturing, representing steel companies and workers.

Economists also believe the impact of a tariff cut will be modest. Jason Furman, an economist at Harvard University and former chairman of the Obama Economic Advisory Board, estimates that removing all Chinese tariffs could cut the CPI by 0.5 percentage points, which had risen 8.3% in April.

But when it comes to lowering inflation, Furman said, “tariff cuts are the single biggest tool the administration has.”

The U.S. Trade Representative Office will be launched from this month Legal review of customs And the approach to analyzing it, he says, is going well. “We need to make sure that everything we do now works first of all and does not undermine the medium-term design and strategy we know we should pursue.” Ms. Tai said in an interview. May 2nd.

Some Biden administration officials seem to favor the outcome of lifting certain tariffs while increasing other trade sanctions against China, a process that could take at least several months. This could happen through a separate investigation under the so-called Section 301 procedure of China’s use of industrial subsidies.

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