How President Biden Can Fix Trump’s ‘Failed’ China Policy - Bloomberg

How President Biden Can Fix Trump’s ‘Failed’ China Policy - Bloomberg

How President Biden Can Fix Trump’s ‘Failed’ China Policy

 One scholar’s alternative to “impatient unilateralism and decoupling.”

By

January 21, 2021, 8:20 AM EST

 

Former President Donald Trump doesn’t have much to show for his toughness toward China. He didn’t shrink the U.S. trade deficit with the country. Americans, not Chinese, have borne most of the cost of emergency tariffs on Chinese products. And China is focused more than ever on self-reliance, rapidly developing domestic technology to replace high-tech American products.

 

Trump’s “impatient unilateralism and decoupling” was “a largely failed approach,” writes Scott Kennedy, a senior adviser and trustee chair in business and economics at the Center for Strategic and International Studies, in an article titled “A Complex Inheritance: Transitioning to a New Approach on China.” It was published on the CSIS website on Jan. 19, a day before the presidential inauguration of Joe Biden.

 

The article was praised on Jan. 20 by Malcolm Riddell, author of the online China Macro Reporter, who wrote, “Of the many prescriptive China essays I have read, this is among the top.”

 

Kennedy isn’t soft on China. He says the strategy followed by Trump’s predecessors, which he calls “patient multilateralism,” would also not work with President Xi Jinping, who he says is “aiming to dominate the commanding heights of the global economy.”

 

What to do is more complex than just deciding where to settle on the scale of recoupling or decoupling the two economies, Kennedy writes. He breaks the problem down into four categories. One includes things that Biden can and should do unilaterally because they’re good for the U.S. and don’t hurt anyone else, such as supporting the World Health Organization, the World Trade Organization, and the Paris climate accord—all of which Biden is already doing. “Taking these steps early will help clarify that the world’s most serious challenge is China, not U.S. allies and the international institutions they helped build,” he writes. He says the U.S. should roll back the Section 232 tariffs on steel and aluminum imported from America’s allies while keeping them in place against China and Russia, which have been accused of dumping steel at below cost.

 

At the other extreme are U.S. actions that would very much hurt China but that Kennedy argues the U.S. should take unilaterally anyway, such as toughening sanctions for abuses of human rights, delisting Chinese companies operating in the U.S. that don’t comply with U.S. financial reporting requirements, and keeping in place bans on Chinese telecommunications companies that are suspected of being threats to national security.

 

“Far more complicated,” Kennedy writes, are Trump polices that the U.S. shouldn’t reverse unilaterally. One category is Trump initiatives that “have hurt the U.S. economy, eroded U.S. soft power, done little to advance U.S. national security, and damaged the United States’ relationships with allies, all without imposing substantial costs on China.” This, he says, includes Section 301 tariffs on Chinese goods, closing of consulates, and tit-for-tat expulsion of journalists. Rather than simply rolling these back, Kennedy says, the U.S. should engage in “bilateral negotiations in which China either reciprocates or addresses the U.S. concerns that prompted the restrictions to begin with.”

 

Last come the Trump administration’s crackdowns on companies such as Huawei Technologies Co. that may help protect national security but at a cost. “The Trump administration dramatically broadened the basis for being targeted, from asking whether a U.S. exported product could harm U.S. national security if it got into the wrong hands to whether companies could not be trusted because they were Chinese and subject to Beijing’s control,” he writes. Treating foreign companies differently from domestic ones—known as extraterritoriality—sets a precedent that other countries, including China, could exploit, he writes. Kennedy says the U.S., working with allies, should develop standards that protect national security and that “if adopted by China, would at least in principle not be objectionable.”

 

People can reasonably disagree with the fairly hawkish Kennedy about where to set the dial on U.S. relations with China, but he provides a service by breaking the relationship down into four distinct categories, each with its own challenges. As he writes, “To successfully transition to a new and more effective China strategy, the various existing measures should not be treated in the same way.”