A leak from the White House is that President Biden may finally ease tariffs on some Chinese goods – after just 18 months in his administration. The lingering hesitation underscores that Mr Biden has essentially no trade policy while the rest of the world moves forward with new trade deals.
Mr. Biden’s China policy demonstrates his trade paralysis with political analysis. Asked during the 2020 campaign if he would keep Donald Trump’s tariffs on hold, Mr Biden said: “No. Hey, who said Trump’s idea was a good idea? ‘ He said they had hurt US manufacturing and agriculture, but when in office, he didn’t act.
Tariffs are supposed to be a strategic lever to change China’s policies, but they have mostly hurt US farmers, consumers and businesses. According to the Institute of International Finance, U.S. tariffs and China’s reciprocal tariffs cost Americans about $40 billion in 2018. Beijing also missed its promised target of buying an additional $86 billion in goods. of the United States by 2021.
Cutting the consumer import tax would help reduce inflation by 1.3 percentage points in one estimate. It would also open up China to more American exports, such as Boeing planes. About 150 Boeing-made planes worth about $10 billion are sitting on the tarmac waiting for approval from the Chinese government. Europe’s Airbus has filled the void by delivering 197 aircraft to China as of 2021.
US tariffs are a blunt instrument that harms Americans more than harms the Chinese Communist Party. A smarter policy would form alliances with other countries to focus on specific predatory behavior — such as cyber and telecommunications theft. The smart game now would be to lower tariffs on consumer goods – the kind sold at Walmart – to return to China, removing obstacles to US planes and other exports.
While Mr. Biden mused, the Pacific nations continued to increase trade with each other. The president in November refused to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the successor to the agreement Mr. Trump abandoned in 2017 that promoted independent trade with China. Country.
Now, Beijing is entering the void left by Washington’s absence. In January, China, Australia, Japan and nine other countries initiated the Regional Comprehensive Economic Partnership. According to the Brookings Institution, the deal will gradually reduce tariffs and could add $186 billion a year to the world economy.
The administration has also slowed down trade talks with Britain, despite Britain’s eagerness to leave the European Union in 2020. The President’s biggest trade move with Canada comes in Last year was the doubling of tariffs on imports of softwood lumber. The Commerce Department reversed course in February as housing costs rose. But it still wants a tax rate 11.64% —30% higher than when Biden took office.
All of this is a failure for the terms of the President. “America is back” was his original mantra, which included a pledge to help American businesses “win on the world stage.” Mr. Biden said he would improve Mr. Trump’s policy by increasing trade with European and Asian allies, then pressuring China with a united front.
But the administration has reverted to protectionism. Several industries that benefited from Trump’s tariffs have lobbied President Biden to delay or block new trade deals. Mr. Biden and US Trade Representative Katherine Tai were more eager to show their pro-union bravery than to strike deals to grow the economy. Agreements to lift tariffs on European and Japanese metals include limits on the volume that can be imported duty-free. The limits are based on previous imports, meaning that US businesses will pay when they need to expand their purchases.
Instead of joining the CPTPP, the Government in May launched its own Pacific trade framework. It proposes common standards in areas such as taxation and green energy but lacks binding commitments such as tariff reductions. The Biden framework includes the promise of a digital trade deal but doesn’t have any details. U.S. allies in Asia are seeking up-to-date standards on cybersecurity, international data storage, and other items of 21st-century commerce. The new agreement considers these issues a priority. but take several steps to reach an actual agreement.
Free trade agreements and better digital trade rules are in the economic and strategic interests of the United States. Joining the CPTPP and reaching an agreement with the UK will grow the world economy and strengthen alliances. A US-led pact on data exchange would strengthen digital trade and security before China sets forth its terms.
Biden’s abandonment of trade becomes all the more confusing amid inflation and recession risks as interest rates rise. It’s another example of the White House putting politics above policies that promote economic growth.
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https://www.wsj.com/articles/bidens-missing-trade-agenda-china-tariffs-katherine-tai-11657057742 Biden’s Lack of Trade Policy – WSJ