Commentary on Political Economy

Tuesday, 1 December 2020

 

Biden Says He Won’t Quickly Remove China Phase-One Tariffs: NYT

Bloomberg News
Updated on 
  • President-elect to consult with allies and conduct full review
  • Says will “fight like hell” by investing in America first
Joe Biden in Wilmington, Delaware, on Dec. 1. 
Joe Biden in Wilmington, Delaware, on Dec. 1.  Photographer: Chandan Khanna/AFP/Getty Images

President-elect Joe Biden told the New York Times he’d leave the phase-one trade deal with China in place while he conducts a full review of U.S. policy toward China in consultation with key allies.

Speaking to columnist Thomas Friedman, Biden said he wouldn’t immediately scupper the trade agreement that President Donald Trump reached with China earlier this year.

“I’m not going to make any immediate moves, and the same applies to the tariffs,” Biden said, according to the report. “I’m not going to prejudice my options.”

Biden told Friedman he would first conduct a full review of the phase-one deal and consult with traditional allies in Asia and Europe “so we can develop a coherent strategy.”

“The best China strategy, I think, is one which gets every one of our -- or at least what used to be our -- allies on the same page,” Biden said. “It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.”

Pace of Purchases Slowed

China’s imports from the U.S. less than half of 2020's target by October

Source: Bloomberg calculations based on official Chinese data

The yuan weakened against the dollar immediately after the news, before regaining much of that loss.

As part of the trade deal signed in January, China agreed to increase its purchases of U.S. goods by $200 billion through 2021, but it’s nowhere close to meeting those targets. The latest data through the end of October shows China had only bought about 44% of the promised amount for this year. Both the U.S. and China left tariffs on billions of dollars worth of goods in place after the deal was signed.

Biden said he hoped to tackle China’s “abusive practices,” including “stealing intellectual property, dumping products, illegal subsidies to corporations,” as well as forcing “tech transfers” from American companies to their Chinese counterparts.

Biden also spoke about developing bipartisan consensus at home for government-led investments in American research and development, infrastructure and education to better compete with China.

“I want to make sure we’re going to fight like hell by investing in America first,” he said.

During his election campaign, Biden’s advisers alluded to him taking a gradual approach on China tariffs, saying he’d prioritize domestic issues like investing in research and development and U.S. manufacturing to compete with Beijing from a position of strength.

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