Biden’s Missing Trade Policy – WSJ

President Joe Biden


Photo:

Al Drago/Bloomberg News

The news leaking out of the White House is that President Biden may finally ease tariffs on some Chinese goods – just 18 months into his tenure. The continued indecisiveness underscores that Mr. Biden has essentially no trade policy while the rest of the world moves forward with new trade deals.

Mr. Biden’s China policy demonstrates his trade paralysis through political analysis. When asked during the 2020 campaign if he would comply with Donald Trump’s tariffs, Mr Biden said, “No. Hey look, who said Trump’s idea is a good one?” He said they hurt US manufacturing and agriculture, but in office he has failed to act.

The tariffs were supposed to be a strategic lever to change China’s policies, but they have mostly hurt US farmers, consumers and businesses. US tariffs and China’s mutual tariffs cost Americans around $40 billion in 2018 alone, according to the Institute of International Finance. Beijing also missed its promised target of buying $86 billion more US goods in 2021.

A cut in tariffs on consumer imports would help reduce inflation by up to 1.3 percentage points, according to one estimate. It would also open China to more US exports such as Boeing planes. About 150 Boeing-made planes, worth about $10 billion, sit on a tarmac awaiting approval from the Chinese government. Europe’s Airbus has filled the gap by delivering 197 aircraft to China since 2021.

US tariffs are blunt instruments that hurt Americans more than the Chinese Communist Party. Smarter policies would form alliances with other countries to focus on specific predatory behaviors – like cyber theft and telecoms. The smart game now would be to ease tariffs on consumer goods — sold at Walmart — in exchange for China lifting barriers to US planes and other exports.

As Mr. Biden hesitates, Pacific nations continue to strengthen trade with one another. The president in November declined to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the successor to the deal Mr Trump backed away from in 2017 and which has boosted trade independently of China.

Beijing is now filling the void left by Washington’s absence. In January, China, Australia, Japan and nine other countries started the regional comprehensive economic partnership. The deal gradually lowers tariffs and could boost the global economy by $186 billion a year, according to the Brookings Institution.

The government has also been sluggish on trade talks with the UK, despite Britain’s zeal since leaving the European Union in 2020. The president’s biggest trade move with Canada last year was doubling tariffs on softwood imports. The Commerce Department reversed course in February as construction costs rose. But it still wants a tariff of 11.64% – 30% higher than when Biden took office.

All of this is a failure on the President’s own terms. “America is back” was his early mantra, including a promise to help US companies “win on the world stage.” Mr Biden said he would improve Mr Trump’s policies by boosting trade with European and Asian allies and then pressuring China with a united front.

But the government has returned to protectionism. The few industries benefiting from Trump’s tariffs have lobbied President Biden to delay or block new trade deals. Mr. Biden and US Trade Representative Katherine Tai are more eager to show their pro-union good faith than doing business to stimulate the economy. Agreements to lift tariffs on European and Japanese metals included limits on the volume that can be imported duty-free. The limits were based on historical import volumes, meaning US companies will pay whenever they need to expand their purchases.

Instead of joining the CPTPP, the government launched its own Pacific Trade Framework in May. It proposes common standards in areas like taxes and green energy, but lacks binding commitments like tariff cuts. The Biden framework includes the promise of a digital trade deal, but no specifics. US allies in Asia seek updated standards for cybersecurity, international data storage and other 21st-century commerce facilities. The new agreement lists these issues as priorities but takes few steps towards an actual agreement.

***

Free trade agreements and better rules for digital trade are in the US economic and strategic interest. Joining the CPTPP and forging an agreement with Britain would grow the world economy and strengthen alliances. A US-led data-sharing pact would increase digital trade and security before China sets the terms of that trade.

Mr. Biden’s trade waiver is all the more puzzling amid inflation and recessionary risks as interest rates rise. It’s another example of this White House putting politics ahead of politics that fuels economic growth.

Wonderland: Like other world leaders who embarked on lockdowns, Joe Biden and the Democratic Party are now realizing how complicated private business really is and how easy it is to destroy. Images: AP/Shutterstock/Bloomberg/Zuma Press Composite: Mark Kelly

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

https://www.wsj.com/articles/bidens-missing-trade-agenda-china-tariffs-katherine-tai-11657057742 Biden’s Missing Trade Policy – WSJ

Alley Einstein

USTimesPost.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@ustimespost.com. The content will be deleted within 24 hours.

Related Articles

Back to top button