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How Biden Adopted Trump’s Trade War With China

By The New York Times

In this episode's examination of U.S.-China trade relations, The Daily explores the evolution of American trade policy towards China. Prior to Trump, free trade and avoiding tariffs on China were favored by economists and policymakers. Trump upended this consensus with confrontational tariffs and rhetoric portraying China as taking advantage of the U.S. While Trump's tariffs failed to significantly boost U.S. manufacturing jobs, they altered trade dynamics.

The episode outlines how Biden has built upon some of Trump's China policies while pursuing different goals. Biden has maintained Trump's tariffs and implemented new ones, aiming to boost U.S. competitiveness through a departure from traditional Democratic free trade policies. However, Biden is seeking an international coalition to challenge China's emerging industry dominance, rather than confronting China alone.

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How Biden Adopted Trump’s Trade War With China

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How Biden Adopted Trump’s Trade War With China

1-Page Summary

The evolution of U.S. trade policy towards China

The pre-Trump consensus favored free trade and avoided tariffs

Prior to Trump's presidency, there was broad agreement among U.S. economists and politicians that free trade and avoiding tariffs on China was the best policy, Tankersley and Tavernise explain.

Trump upended decades of U.S. trade policy

Trump campaigned on renegotiating trade deals and implementing tariffs on China, which he criticized for "ripping off" the U.S. He followed through by imposing a series of tariffs on Chinese imports, prompting retaliatory tariffs and a trade war.

Trump's trade war failed to significantly boost U.S. manufacturing jobs

While politically popular, studies found Trump's tariffs had a minimal effect on boosting U.S. manufacturing employment, Tankersley notes. The tariffs instead led to higher consumer prices.

Trump's rhetoric portrayed China as taking advantage of the U.S.

Trump argued China was responsible for millions of lost U.S. manufacturing jobs through unfair trade practices. He contended tariffs could force China to accept a "better deal," rectifying the "China shock" job losses, particularly in the industrial Midwest.

How Biden has built on some of Trump's policies while pursuing different goals

Biden has maintained and built upon some of Trump's confrontational policies

Biden has kept Trump's tariffs intact and even increased some, aiming to boost U.S. competitiveness in industries like clean energy through tariffs and subsidies.

Biden's approach differs from past Democratic policies favoring free trade

Biden has embraced a more protectionist approach, contrasting previous Democratic presidents' free trade policies. He is pursuing an international coalition to challenge China's dominance in emerging industries, rather than confronting China alone.

1-Page Summary

Additional Materials

Clarifications

  • Trump imposed tariffs on billions of dollars worth of Chinese imports, ranging from steel and aluminum to consumer goods. These tariffs aimed to protect American industries but led to higher prices for consumers and retaliatory tariffs from China. Studies found that while the tariffs were politically popular, they had limited impact on boosting U.S. manufacturing jobs as intended.
  • The "China shock" refers to the significant impact that increased trade with China had on the U.S. economy, particularly on manufacturing jobs. The surge in Chinese imports led to job losses in industries that faced competition from cheaper Chinese goods. This phenomenon is often associated with the period when China joined the World Trade Organization in 2001, leading to a rapid increase in trade between the two countries. The "China shock" has been a focal point in discussions about the effects of globalization and trade policies on domestic industries.
  • Biden's confrontational policies towards China aim to address concerns about unfair trade practices and boost U.S. competitiveness in key industries like clean energy. By maintaining and increasing tariffs, Biden seeks to create leverage for negotiations and protect American jobs. His approach also involves building international alliances to collectively address China's growing influence in global markets. The effectiveness of these policies will depend on their ability to balance economic interests with diplomatic relations and strategic goals.
  • Biden's approach differs from past Democratic policies by embracing a more protectionist stance, which contrasts with previous Democratic presidents' emphasis on free trade. He aims to challenge China's dominance in emerging industries by working with an international coalition rather than confronting China alone.

Counterarguments

  • The pre-Trump consensus on free trade may have overlooked the negative impacts of globalization on certain sectors and communities within the U.S.
  • Tariffs can sometimes be a legitimate tool to address unfair trade practices and protect national interests.
  • The effectiveness of Trump's trade war in achieving its goals could be debated; some industries may have benefited from protective measures.
  • Portraying China as solely responsible for U.S. manufacturing job losses ignores other factors such as automation and domestic economic policies.
  • Maintaining Trump's tariffs could be seen as inconsistent with traditional free-market principles typically supported by Democrats.
  • Protectionist policies might lead to trade inefficiencies and could harm international relations and global economic integration.
  • While aiming to boost competitiveness, tariffs and subsidies could distort markets and potentially provoke trade disputes with other countries.
  • Forming an international coalition to challenge China's dominance might be more complex in practice and could lead to geopolitical tensions.

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How Biden Adopted Trump’s Trade War With China

The evolution of U.S. trade policy towards China, from the pre-Trump consensus to the current approach

U.S. trade policy towards China has undergone a transformation from a pre-Trump era consensus that favored free trade to a more confrontational “America First” approach that utilized tariffs and renegotiated terms.

The pre-Trump consensus favored free trade and avoided tariffs on China

Before Trump's presidency, there was a broad agreement among economists and politicians across the political spectrum in the United States that free trade was the best policy. This consensus prioritized the avoidance of tariffs on China and other trading partners, as tariffs were generally seen as harmful to economic growth and consumer prices.

Trump upended decades of U.S. trade policy with a more confrontational approach

With the commencement of Donald Trump’s presidency, the U.S. trade policy experienced a drastic shift. Trump had campaigned on the notion that China was, in his words, "ripping off" the U.S., and he pledged to renegotiate trade deals to favor American interests more strongly.

Trump criticized China for "ripping off" the U.S. and pledged to renegotiate trade deals and impose tariffs

Upon taking office, Trump followed through on his promises by criticizing China’s trade practices and implementing tariffs on a variety of Chinese goods. This marked a departure from previous policies, representing a more protectionist and confrontational stance.

Trump implemented a series of tariffs on imports from China, prompting retaliatory tariffs and a trade war

The imposition of tariffs on Chinese goods prompted China to respond in kind, resulting in a series of retaliatory tariffs. This tit-for-tat ...

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The evolution of U.S. trade policy towards China, from the pre-Trump consensus to the current approach

Additional Materials

Clarifications

  • Trump's trade policies towards China involved implementing tariffs on a wide range of Chinese goods, aiming to address what he perceived as unfair trade practices. These tariffs led to retaliatory measures from China, sparking a trade war between the two countries. Despite the political popularity of these policies, there were doubts about their effectiveness in significantly boosting U.S. manufacturing jobs.
  • The trade war between the U.S. and China involved the imposition of tariffs by both countries on each other's goods, leading to increased costs for businesses and consumers. This escalation of tariffs was part of a strategy to address trade imbalances and protect domestic industries. The trade war impacted global trade flows and economic growth, with both countries experiencing consequences from the ongoing tensions. Despite the political popularity of the trade war in certain circles, its effectiveness in achieving long-term economic goals remains a subject of debate among experts.
  • Tariffs on imports can disrupt global trade flows by making imported goods more expensive, leading to shifts in supply chains and trade patterns. This can impact consumer prices as higher costs for imported goods may be passed on to consumers, potentially leading to inflation or increased prices for certain products. The imposition of tariffs between countries like the U.S. and China can create a ripple effect on the global economy, influencing trade dynamics and consumer purchas ...

Counterarguments

  • The pre-Trump consensus on free trade did not adequately address the negative impacts of globalization on certain sectors of the U.S. economy, particularly manufacturing.
  • Economists are not unanimous in their support for free trade; some argue that strategic tariffs can protect nascent industries or counteract unfair trade practices.
  • The view that tariffs are universally harmful to economic growth does not consider the potential long-term strategic benefits of protecting certain industries.
  • The confrontational approach of the Trump administration could be seen as a necessary recalibration of trade relations to address issues such as intellectual property theft and forced technology transfers.
  • The argument that Trump's policies were purely protectionist overlooks the potential for renegotiated trade deals to lead to fairer trade rather than simply restricting trade.
  • The trade war did not only have negative impacts; it also led to increased awareness of the complexities of global supply chains and the importance of trade balance.
  • While Trump's trade policies may not have significantly boosted U.S. manufacturing jobs, they may have prevented further erosion of the manufacturing se ...

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How Biden Adopted Trump’s Trade War With China

Trump's rhetoric and policies towards China, including his use of tariffs

Donald Trump's approach to China incorporated a mix of aggressive rhetoric and the application of tariffs, which he presented as a means to rectify what he considered to be unfair trade practices.

Trump portrayed China as taking advantage of the U.S. through unfair trade practices

Jim Tankersley and Sabrina Tavernise recall that during his campaign, Donald Trump was very specific in his rhetoric about China, asserting that the country was "ripping us off" and was responsible for "stealing our jobs." Trump tapped into economic fears related to the United States losing millions of jobs, a phenomenon often referred to as the "China shock" of the early 2000s. Tavernise further mentions that Trump claimed China had been "eating our lunch" for decades, which he blamed for the loss of factory jobs in places like rural North Carolina.

Trump blamed China for the loss of millions of U.S. manufacturing jobs

Trump argued he could force China to accept a "better deal" through the use of tariffs

Trump contended that China was at fault for the loss of millions of U.S. manufacturing jobs. He believed previous U.S. leadership failed to negotiate favorable deals with China and promised that he would force China to accept a "better deal" through the use of tariffs. The economic context was that the "China shock" purportedly caused the loss of a couple million jobs, particularly in the industrial Midwest.

The economic impact of Trump's tariffs on China was limited

Despite Trump’s assertive policy stance, the effectiveness of the tariffs was questioned.

Studies found the tariffs had a minimal effect on U.S. manufacturing employment

Tankersley brings attention to discussions with economists, including those with Republican leanings favoring low taxes and free trade, wh ...

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Trump's rhetoric and policies towards China, including his use of tariffs

Additional Materials

Clarifications

  • The "China shock" of the early 2000s refers to the significant impact of China's rapid economic rise on global trade dynamics, particularly affecting industries in the United States. This period saw a surge in Chinese exports, leading to increased competition for American manufacturers and contributing to job losses in certain sectors. The term highlights the disruptive effect China's emergence as a manufacturing powerhouse had on economies worldwide, including the U.S.
  • The "China shock" refers to the period when China's rapid economic growth and increased global trade caused disruptions in the U.S. economy, leading to job losses in industries like manufacturing. The industrial Midwest, known for its manufacturing hubs, was particularly affected by these job losses as competition from cheaper Chinese imports intensified. This phenomenon highlighted the challenges faced by American workers and industries in adapting to a more globalized and competitive economic landscape. The "China shock" underscored the need for policymakers to address issues related to trade imbalances and job displacement in affected regions.
  • Economists with Republican leanings who favor low taxes and free trade criticized Trump's tariff policy because it contradicted traditional Republican principles of free trade and could lead to higher consumer prices and economic inefficiencies. They believed that tariffs could harm the economy by disrupting global supply chains and potentially sparking retaliatory measures from trading partners. This criticism reflects a broader ideological divide within the Republican Party on trade policy, with some members supporting protectionist measures like tariffs and others advocating for free trade agreements.
  • The limited impact of tariffs on achieving desired outcomes means that the tariffs imposed by Trump did not lead to significant changes in the intended goals, such as bringing back manufacturing jobs ...

Counterarguments

  • While Trump accused China of unfair trade practices, some argue that globalization and trade are complex, and job losses can also be attributed to technological advancements and automation, not solely to China's trade practices.
  • The claim that China is solely responsible for the loss of U.S. manufacturing jobs overlooks other factors such as increased productivity, domestic policy decisions, and shifts in consumer demand.
  • The effectiveness of tariffs as a tool to force China into a "better deal" is debatable; some economists argue that tariffs can be counterproductive, leading to trade wars that harm both economies.
  • Some analyses suggest that tariffs may have had some positive impacts on specific sectors of U.S. manufacturing or have prompted some companies to reconsider offshoring.
  • While tariffs may have led to higher consumer prices, some argue ...

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How Biden Adopted Trump’s Trade War With China

How Biden has approached China, including building on some of Trump's policies while pursuing different goals

Under President Biden, the United States continues to handle its economic relationship with China with a notable edge, building upon Trump's confrontational strategies while also diversifying the goals and approaches.

Biden has maintained and built upon some of Trump's confrontational policies towards China

Jim Tankersley notes Biden has kept many of Trump's tough policies towards China intact. While Biden and Trump have different end goals, the shared concern over American competitiveness has led to surprising continuity between the administrations.

Biden has not reversed Trump's tariffs, and has even increased some of them

President Biden has retained Trump's tariffs and, in some cases, has enforced stricter ones, especially in strategic sectors like clean energy. This maintenance of tariffs reveals a strategy to fortify U.S. industries against cheap Chinese imports, addressing economic and environmental goals simultaneously.

Biden aims to use tariffs and subsidies to boost U.S. competitiveness in clean energy industries

With a strong focus on clean energy industries, Biden has directed subsidies, tax incentives, and direct grants towards American manufacturers of electric vehicles, wind power, solar power, and semiconductors to expedite domestic industrial growth. These industries, currently under threat from cheaper Chinese technologies, are being protected by increased tariffs on imports to encourage American consumer support and sustain U.S. manufacturing jobs.

Biden's approach differs from past Democratic policies favoring free trade

President Biden's shift towards a more nationalist, protectionist agenda, signifies a departure from past Democratic policies that largely embraced free trade.

Biden has embraced a more protectionist, industrial policy-oriented approach to counter China

Tankersley po ...

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How Biden has approached China, including building on some of Trump's policies while pursuing different goals

Additional Materials

Clarifications

  • Biden has upheld Trump's tariffs on Chinese imports, and in some cases, has even increased them, particularly in sectors like clean energy. These tariffs are aimed at protecting U.S. industries from competition with cheaper Chinese goods. Biden's strategy involves using tariffs and subsidies to enhance American competitiveness in industries like electric vehicles, wind power, solar power, and semiconductors.
  • The rationale behind maintaining and increasing tariffs on Chinese imports, especially in clean energy sectors, is to protect and support domestic industries that are crucial for national security and economic growth. By imposing tariffs, the U.S. aims to level the playing field for American companies, prevent unfair competition from Chinese firms benefiting from government subsidies, and encourage the growth of key industries like electric vehicles and renewable energy within the country. This strategy also aligns with broader environmental goals by promoting the development of sustainable technologies domestically.
  • Biden's shift from past Democratic policies favoring free trade involves a move towards a more protectionist and industrial policy-oriented approach. This departure signifies a change from the traditional Democratic stance that leaned towards promoting free trade agreements. Biden's strategy focuses on bolstering specific industrial capabilities domestically to enhance competitiveness, diverging from the more open-market approach of previous Democratic administrations.
  • Biden's protectionist, industrial policy-oriented approach involves implementing measures like tariffs, subsidies, and grants to support American industries, particularly in sectors like clean energy and technology. This strategy aims to boost domestic manufacturing, enhance competitiveness, and safeguard critical industries from foreign competition, primarily from China. By focusing on protecting and promoting key sectors, Bid ...

Counterarguments

  • Maintaining and increasing tariffs could be criticized for potentially harming domestic consumers and businesses that rely on affordable imported goods, leading to higher prices and potential trade retaliation.
  • The use of tariffs and subsidies to boost competitiveness in clean energy industries might be seen as government overreach into the market, potentially leading to inefficiencies or favoritism towards certain companies or industries.
  • Some may argue that a protectionist approach could isolate the U.S. from the global economy and hinder the potential benefits of international trade, such as access to a broader range of products and services.
  • Pursuing an international coalition to challenge China could be criticized if it leads to increased global tensions or if it fails to include a strategy for engaging with China on common challenges like climate change or global health issues.
  • Critics might argue that a protectionist, industrial policy-oriented approach ma ...

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