[바이든 시대] The US-China trade war started by Trump, is it an expansion or an end?

Input 2021.01.20 08:27

Robert Lightheiser, the head of the US Trade Representation (USTR), who oversaw US trade policy in the Donald Trump administration, left a call to the new Joe Biden administration: “Conversation with China is just a waste of time, so keep pressing China to keep the US-China phase 1 trade agreement.” As a key designer of the US-China trade war, his final advice was to “maintain the tariffs imposed on China.”

President Trump has beaten China throughout his four years in office. Security, technology, diplomacy, military, human rights, and ideology have driven China in all directions. It started with a customs bomb thrown at China. In March 2018, President Trump declared war on China by signing an executive order that imposes high tariffs on Chinese imported goods. In July of that year, it levied a 25% tariff on $250 billion worth of Chinese-made goods, and 15% tariff on $120 billion worth of Chinese-made goods in September 2019. On December 15, 2019, he made an ultimatum that he would impose a 15% tariff on Chinese-made products worth 156 billion dollars if he did not increase the purchase of US agricultural products. It will impose high tariffs on all products imported from China.

China’s Xi Jinping government raised a white flag just before imposing additional tariffs. China has pledged to import US-made products and services, including agricultural products, for two years from 2020 to 2021, worth more than $200 billion worth of 2017 levels. What China has achieved was to lower some of the import tariffs imposed by President Trump unilaterally. On January 15 last year, President Trump called the Chinese delegation led by Chinese Deputy Prime Minister Liu Hee to the White House to sign the US-China phase 1 trade agreement.

The first phase of the US-China trade agreement marks a year ahead of President-elect Biden’s inauguration (January 20). Both sides are talking differently. China insists that it has done enough to implement the agreement, even under circumstances unilaterally by President Trump. The US accuses China of not keeping its promises again.

Now they all look at only one place. Will Biden’s trade war begun by his predecessor end? Biden-elect is known as a public hardline as well as President Trump. Biden’s basic position is that we must respond strongly to China’s unfair behavior that ignores the rules of the international community. In China, there is a strong expectation that the trade relationship between the two countries, which collapsed during the days of President Trump, hit a turning point. Interest is focused on whether the two sides can find consensus and move on to a new page.

◇ There is no China in Biden’s priority

Biden criticized the failure of the Trump administration’s first-stage trade agreement with China in August of last year during the campaign. The promises received from China are vague, and they are only empty words that are not obviously kept. He thought that China would continue to subsidize state-owned companies and steal American ideas.

However, in an interview with the New York Times in December last year after the presidential election, he said that he would not take any action with respect to China right away. He said he would keep the tariffs imposed by President Trump for the time being. First of all, I will keep the status quo. He said he would create a coherent strategy in consultation with long-time allies in Asia and Europe. It was observed that the US would not make a decision on its own, but that it would establish an allied front and respond jointly to China. This is an unpleasant move because if his concept becomes a reality, the width of the luck becomes narrower in China.

Some in China and the United States are also predicting that the Chinese delegation will visit the White House immediately after Biden’s inauguration as president. It is expected that the Chinese side will initially attempt to improve relations through dialogue. However, China is not on the priority list that it will do within the first 10 days of the Biden’s launch. Chinese media responded that the new US administration is trying to avoid difficult things and do only what is easy.

In the U.S., complaints are everywhere that China did not meet the targets it should have implemented last year during the first phase of the trade agreement. Even taking into account the coronavirus pandemic that has swept the world, distrust that China has not already kept its promises is prevalent. In the meantime, China’s annual trade surplus against the United States last year grew more than before. In 2020, China’s exports to the United States amounted to 4518 billion dollars, up 7.9% from a year ago. Imports from the United States during this period were $134.9 billion, an increase of 9.8%. China’s trade surplus with the United States in 2020 was $316.9 billion, larger than the 2019 surplus ($295.7 billion).

Critics of the trade agreement with China say that the imposition of tariffs from China has made the price of imported goods from China high and the supply chain shaken. However, there is also a loud voice that the US is only losing money in dealings with China. Therefore, there is also a prospect that the Biden administration will not be able to revert the policy of its predecessor.

◇ Biden to work with China through alliance

The need to tackle China’s bad habits is something that Biden-elect and President Trump agree on. However, styles are different in terms of how to bring about change. President-elect Biden emphasizes the rules, while President Trump’s arbitrary push. President-elect Biden values ​​alliance coordination while President Trump puts US priority first. Observations are emerging that the Biden administration can cooperate with alliances, including South Korea, to counter China’s unfair trade practices.

During his second round of debate with President Trump in October last year, President-elect Biden criticized President Trump for hanging out with a thug like Chinese President Xi Jinping, distancing the US alliance. Together with his friends, he asked China to obey the rules, and said that if China doesn’t follow the rules, he will pay the price economically. However, this rule he refers to is the rule set by the United States in the existing international system.

With this in mind, Biden nominated Catherine Tai as USTR representative to lead the new trade negotiations with China. Tai, a Taiwanese-American, worked as a lawyer at USTR from 2007 to 2014. He said he was primarily responsible for filing complaints against China’s unfair trade practices with the World Trade Organization (WTO).

It is unwelcome news to the Biden administration that China recently signed an investment agreement with the European Union (EU) for seven years. Biden’s initiative to build a common pressure front with the EU may be stranded.

Earlier on the 30th of last month, China and the EU concluded a comprehensive investment agreement (CAI) negotiation. European companies and investors have a fairer opportunity in China, the EU leadership explains. From the perspective of China, it can be seen that the diplomatic achievements of attracting the EU, a key US alliance, toward China during the US regime change. “The investment agreement between China and the EU could be an obstacle to cooperation between the US and the EU,” said James McBride, a researcher at the American Foreign Relations Association (CFR).