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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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 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.
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 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.
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 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
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.
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.
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.
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.
The imposition of tariffs on Chinese goods prompted China to respond in kind, resulting in a series of retaliatory tariffs. This tit-for-tat ...
The evolution of U.S. trade policy towards China, from the pre-Trump consensus to the current approach
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.
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 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.
Despite Trump’s assertive policy stance, the effectiveness of the tariffs was questioned.
Tankersley brings attention to discussions with economists, including those with Republican leanings favoring low taxes and free trade, wh ...
Trump's rhetoric and policies towards China, including his use of tariffs
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.
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.
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.
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.
President Biden's shift towards a more nationalist, protectionist agenda, signifies a departure from past Democratic policies that largely embraced free trade.
Tankersley po ...
How Biden has approached China, including building on some of Trump's policies while pursuing different goals
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