(photo source: World Wide Web)
On December 2, the New York Times published an exclusive interview with us president elect Biden by journalist Thomas L. Friedman. Biden said that after taking office, he will not immediately change the additional 25% tariff imposed by trump on Chinese goods, nor cancel the first phase of the Sino US economic and trade agreement. Instead, he will comprehensively review the existing trade agreements with China and negotiate with US allies to jointly formulate a strategy for China. According to the report, the implementation of the first phase of the Sino US economic and trade agreement is not optimistic. The agreement requires China to purchase about US $200 billion worth of US goods between 2020 and 2021, but the progress of procurement is far behind. Biden believed that Trump's original intention of launching a trade war with China was to solve the trade deficit between the United States and China, but it had little effect. Biden's trade policy toward China will mainly focus on dealing with China's "economic abuse", such as "stealing intellectual property rights", "dumping products", "illegally subsidizing enterprises", "forcing American companies to transfer technology to their Chinese counterparts", etc. Biden said that in order to restrict China, the two parties in the United States must reach a consensus on some industrial policies, with the government leading large-scale investment in industrial R & D, infrastructure construction, education, semiconductor industry, etc., so as to better compete with China. To ensure that the "war" will be fully dealt with through priority investment in the United States, energy, biotechnology, advanced materials and artificial intelligence are mature areas for large-scale investment by the U.S. government. Biden's government will not sign any new trade agreements until it makes significant investments in local workers and education. Biden also said that the best strategy for China is to unify the position of US allies. In the early days of his presidency, his first task is to repair the relationship between the United States and its traditional allies, so that both sides can hold the same position. Biden believes that as long as trump is on the stage, the United States will never be able to establish a "global Anti China Alliance", and once the alliance is established, it is definitely not good news for China.
Biden's economic team is taking shape and plans to reshape Trump's Global trade policy, the Wall Street Journal reported on December 1. Biden nominated Janet Yellen as finance minister to become the central figure in his new economic policy. Yellen has made some achievements in the study of the U.S. labor market. He once promoted the low interest rate policy at the Federal Reserve to reduce the unemployment rate. Yellen has spent decades building contacts and networks in major international financial organizations, focusing on cooperation with US allies. Yellen's future deputy is Adewale adeyemo, an economic adviser in the Obama administration and current president of the Obama foundation. With international thinking, he helped the Obama administration negotiate trade agreements with its Pacific allies. The chairman of Biden's Council of economic advisers will be Cecilia rouse, a labor economist at Princeton University. She mainly focuses on the rights and interests of American workers, including the impact of low-cost labor competition overseas on American workers.
According to the report, some of Trump's economic and trade policies may have a long-term impact on the United States. Biden's team agrees with Trump's view that "many Americans find it difficult to accept globalization", but there are differences in response measures. Compared to the trump administration, Biden's economic team needs to work with the rest of the world to address the failure of globalization. Biden said he wanted to promote allies to unite against China, and urged more active plans at home to help Americans hurt by trade. Nathan sheets, chief economist of pgim, a US fixed income investment consultancy, said the Biden team needed to open up a "third way" different from Obama and trump, and the Biden administration was expected to push its allies to work with the us to challenge China. Michael Pillsbury, Trump's China advisor and a scholar at the Hudson Institute, a conservative research institution, believes Biden will not be soft on China, but may not be as interested in China's trade issues as trump. Biden is about to face a series of thorny issues with China, and may not deviate from Trump's original policy on some issues. Mark Sobel, a former senior Treasury official, said the Biden administration would reduce external sanctions as much as possible, in addition to some of the most pressing national security issues.
Biden's economic team is skeptical of using tariffs as a weapon of trade confrontation. Yellen has publicly questioned Trump's use of tariffs, saying that part of the reason the tariff measures didn't work was due to pressure from the appreciation of the US dollar. A stronger US dollar reduces the cost of imports, but it makes us exports more expensive in the world market and damages the competitiveness of US exports. According to Hitz, Biden will not lift tariffs on China, but will lift tariffs on allies, such as steel and aluminum products. However, considering the support of American metal producers and their trade unions for tariffs, even such a degree of tariff reduction is not easy to implement. Some U.S. business groups have urged Biden to abandon existing tariffs on China in exchange for concessions in other areas. So far, China has not shown any interest in making concessions on its core economic policies.
Yellen once said that the Chinese government's support for state-owned enterprises, "forcing" U.S. companies to transfer high-tech technology to China, and the slow pace of China's opening up market deserve attention. Some Obama era officials say they have learned from the Obama administration's failure to put enough pressure on China on security and economic issues. Marc sumerlin, a senior economic adviser to President Bush, said the exchange rate could be one of the areas in the Biden administration's negotiations with China. Hitz believes that if China allows RMB appreciation, it may reduce part of the pressure on Sino US relations and lay the foundation for the abolition of some tariffs. It is expected that the Biden administration may tolerate a certain degree of depreciation of the US dollar, which will help us export and balance US imbalance in Global trade.
(image source: sputniknews)
Biden's latest statement on the issue of tariffs on China, that is, to continue the tariff policy of the trump period, rather than abolish the imposition of tariffs on China, is obviously different from his commitment made during the election campaign. The main reason is that Biden's team is entangled in its trade policy with China. After four years in power, the trump administration has profoundly changed the economic and trade policies of the United States, and some of its China policies are based on the deeply rooted interest groups in the United States. Therefore, Biden can't ignore the public opinion foundation behind Trump's economic and trade policies and rectify Trump's radical practices, and faces many obstacles.
Biden's team also showed a hesitant attitude towards the global economic route. At present, Biden's foreign economic and trade policies may include: giving priority to easing trade tensions with allies such as Europe and repairing the damaged alliance; reforming the severely damaged WTO and formulating new rules for subsidies and other non market behaviors; holding still to China and discussing with allies before issuing a "coherent strategy" and so on. This reflects the current embarrassing situation of the United States in the global economy. As the leader of the world economy, the "embracing globalization" implemented since the Obama era has brought negative effects to American society, and the Democratic Party has paid a huge political price for it. However, if Biden follows Trump's line and openly calls out anti globalization slogans, he will not be able to occupy the moral highland, but will also be resisted by some allies. As the economist Hitz said, Biden has not yet found a clear "third way" different from Obama and trump.