U.S. to maintain Hawkish economic stance on China, regardless of administration
The trajectory of U.S. policy towards China has shifted from tit-for-tat tariffs and aggressive tactics to more targeted strategies under President Joe Biden, though the approach remains staunchly hardline. Despite ideological disparities between Democrats and Republicans, analysts foresee a continuation of tough measures regardless of the election outcome.
“I think the direction of pressure in Washington is absolutely in one direction, which is more hawkishness,” noted Joshua Meltzer, a senior fellow at the Brookings Institution. The Biden administration has upheld many of the tariffs initiated during Donald Trump’s presidency, imposed export control restrictions on high-end chip transactions, and introduced measures to limit outbound investments to China.
Moreover, there’s a growing emphasis on bolstering self-reliance in critical sectors such as clean energy supply chains, with further action on data flows anticipated. Meltzer highlighted ongoing congressional pressure for more assertive policies towards China, reflecting a consensus across party lines on the need for stringent measures.
**Policy, not partisan split**
Jamieson Greer, partner at King & Spalding and former chief of staff at the U.S. Trade Representative, delineated two prevailing viewpoints in Washington regarding China policy. One camp perceives China as an existential threat, advocating for robust protective measures, while the other exercises caution, wary of overstating the threat and its ramifications on trade and the economy.
The intensification of concerns about China began to crystallize nearly a decade ago, gaining significant traction during the 2016 presidential election cycle. Trump’s outspoken stance on trade resonated with a broad spectrum of voters, transcending traditional partisan boundaries.
**Different policies**
Experts anticipate disparate approaches under a second Biden or Trump administration. Meltzer underscored that the Biden administration aims to adapt to the realities of China without expecting transformative reforms, emphasizing the importance of rallying allies. Conversely, Trump favored leveraging U.S. influence to coerce China into behavioral changes, exemplified by the Phase One trade agreement.
A hypothetical reelection of Trump could entail escalating tariffs on Chinese goods, potentially triggering retaliatory measures and disrupting global trade. Biden, on the other hand, is inclined to maintain existing measures while pursuing a more targeted and collaborative approach.
**Domestic policies**
Irrespective of the election outcome, efforts to preserve U.S. technological leadership will likely persist. However, a Trump administration might exhibit less enthusiasm for initiatives like the CHIPS Act, aimed at reshoring semiconductor manufacturing. Similarly, there might be diminished support for onshoring critical supply chains such as those for electric vehicles and minerals.
Commerce Secretary Gina Raimondo recently cautioned against security risks associated with Chinese-made EVs, signaling a potential tightening of restrictions on data transfers to Chinese entities. Regardless of the election outcome, the expansion of technology controls, particularly in sectors like biotechnology and smart vehicles, appears inevitable.
About Author
