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U.S.-China Trade Relations in the Biden Era: Trade War, Industrial Policy, and Rule-Based International Order
Published online by Cambridge University Press: 03 March 2022
Extract
Presidential candidate Joe Biden's team declared President Trump's trade war with China a failure when Democratic nominee Senator Kamala Harris told Vice President Mike Pence at the U.S. vice presidential debate that “You lost that trade war.” Half a year has passed since Biden took over the White House, the U.S.-China trade war is still going on, though in a much less pompous manner than what President Donald Trump once liked it to be. President Biden refused to make significant change to Trump's tough stance on U.S.-China trade relations on the ground of the accusations of China's “stealing” intellectual property (IP), state subsidies to enterprises, forced technology transfer from foreign companies, among others. On the other hand, China has not backed off from the trade war, though it arguably made many concessions in the so-called “Phase 1 trade deal” signed by the United States and China on January 15, 2020, in which China pledged to buy US$ 200 billion more of American goods and services in 2020 and 2021, in addition to the commitments to strengthen protection and remove forced technology transfer. Evidence suggested that China was still far behind prorated targets of a full year when Biden assumed presidency in January 2021. More significantly, Chinese President Xi Jinping has been taking the opportunities offered by the trade war to remake the Chinese economy toward state capitalism. Additionally, as the trade war was happening, the Trump administration intensified its assault on the multilateral trading system under the World Trade Organization (WTO) and effectively paralyzed the Appellate Body, a crucial part of the WTO's Dispute Settlement System.
- Type
- Global Engagement Series – Reconceiving America's Global Role in the Biden Era: International Perspectives in Asia
- Information
- Copyright
- Copyright © The Author(s), 2022. Published by Cambridge University Press on behalf of The American Society of International Law.
Footnotes
Before the 115th Annual Meeting, ASIL convened audience members from around the globe to listen to panelists, who discussed critical areas of engagement between the United States and Asia on their various interests and how the incoming Biden administration's policies and interpretations of international law will affect U.S. relations with countries in Asia. First, Dawn Yamane Hewett, partner in the international arbitration group of Quinn Emanuel Urquhart & Sullivan LLP and former Deputy General Counsel for Strategic Initiatives in the U.S. Commerce Department, gave an overview of U.S. policy concerning Asia in recent history, including differences and similarities in the approaches being taken by the Biden administration and the importance of the Asia region to U.S. foreign policy. Next Professor Wang Jiangyu discussed the potential impact of the Biden administration's engagement with the World Trade Organization and the Human Rights Council on countries in Asia, Professor Pouria Askary discussed the nuclear deal with Iran, and Yasmin Ullah, a Rohingyan activist, discussed challenges for trade and economic growth, human rights issues in China and Myanmar, and technology and security issues, as well as the links between these areas.
Here, Professors Jiangyu and Askary provide some background and delve deeper into both of their respective topics.
References
1 Ken Morira Su, Wajahat Khan, Alex Fang & Marrian Zhou, US Vice Presidential Debate: Harris Says Trump Lost China Trade War, Nikkei Asia (Oct. 20, 2020), at https://asia.nikkei.com/Politics/US-elections-2020/US-vice-presidential-debate-Harris-says-Trump-lost-China-trade-war.
2 Aime Williams, Biden Administration Says Trump's China Trade Deal “Under Review,” Fin. Times (Jan. 30, 2021), at https://www.ft.com/content/166e648e-c382-40ab-9a29-a1fa75fbf35d.
3 Office of the U.S. Trade Rep. Press Release, Economic and Trade Agreement between the United States of America and the People's Republic of China: Fact Sheet (Jan. 15, 2020).
4 Chad P. Bown, US-China Phase One Tracker: China's Purchases of US Goods, Peterson Inst. Int'l Econ. (May 25, 2021), at https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods.
5 Xi Jinping Is Trying to Remake the Chinese Economy, Economist (Aug. 15, 2020), at https://www.economist.com/briefing/2020/08/15/xi-jinping-is-trying-to-remake-the-chinese-economy.
6 Chad P. Bown & Soumaya Keynes, Why Did Trump End the WTO's Appellate Body Tariffs?, Peterson Inst. Int'l Econ. (Mar. 4, 2020), at https://www.piie.com/blogs/trade-and-investment-policy-watch/why-did-trump-end-wtos-appellate-body-tariffs.
7 Trump's Trade War with China Will Be Left for Biden to Win, Wall St. J. (Jan. 4, 2021).
8 U.S.-China Trade Relations, Cong. Res. Serv. (Feb. 16, 2021).
9 Oxford Economics, The US-China Economic Relationship: A Crucial Partnership at a Critical Juncture, at 4 (Jan. 2021), available at https://www.uschina.org/sites/default/files/the_us-china_economic_relationship_-_a_crucial_partnership_at_a_critical_juncture.pdf.
10 How China Won Trump's Trade War and Got Americans to Foot the Bill, Bloomberg Businessweek (Jan. 12, 2021), at https://www.bloomberg.com/news/articles/2021-01-11/how-china-won-trump-s-good-and-easy-to-win-trade-war.
11 United States – Tariff Measures on Certain Goods from China, Report of the Panel, para. 7.98, WTO Doc. WT/DS543/R (Sept. 15, 2021).
12 Julia Ya Qin, WTO Reform: Multilateral Control over Unilateral Retaliation – Lessons from the US-China Trade War (Wayne State University Law School Legal Studies Research Paper Series No. 2020-73).
13 Opening Statement of Ambassador-designate Katherine Tai Before the Senate Finance Committee, Feb. 23, 2021, at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/february/opening-statement-ambassador-designate-katherine-tai-senate-finance-committee.
14 As Biden's U.S. Trade Representative Katherine Tai put it, “no negotiators walks away from leverage.” See Bod Davis & Yuka Hayashi, U.S. Sits Tight on China Tariffs, Wall St. J. (Mar. 29, 2021).
15 Executive Order on American Supply Chains (Feb. 23, 2021), at https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/24/executive-order-on-americas-supply-chains.
16 Biden Expands Trump's Investment Blacklist of Chinese Companies to 59 Firms, Fortune (June 4, 2021), at https://fortune.com/2021/06/04/biden-trump-china-us-investment-blacklist.
17 United States Innovation and Competition Act of 2021, S. 1260, 117th Cong., 1st Sess., passed Senate on June 8, 2021, available at https://www.congress.gov/bill/117th-congress/senate-bill/1260/text.
18 Stephen Bartholomeusz, Biden Unleashes $US250 Billion Plan to Frustrate China, Sydney Morning Herald (May 31, 2021), at https://www.smh.com.au/business/the-economy/biden-s-us250-billion-plan-to-frustrate-china-20210531-p57wo0.html.
19 David E. Sanger, et al., Senate Poised to Pass Huge Industrial Policy Bill to Counter China, N.Y. Times (June 8, 2021), at https://www.nytimes.com/2021/06/07/us/politics/senate-china-semiconductors.html (calling the Act the “most expansive industrial policy legislation in U.S. history”).
20 United Nations Conference on Trade and Development (UNCTAD), The Relationship Between Competition and Industrial Policies in Promoting Economic Development, para. 6, TD/B/C.I/CLP/3 (Apr. 27, 2009).
21 See generally Marcus Noland & Howard Pack, Industrial Policy in an Era of Globalization: Lessons from Asia, Inst. Int'l Econ. (2003).
22 Hong Zhao, Farewell Speech of Appellate Body Member Prof. Dr. Hong Zhao, World Trade Org. (Nov. 30, 2020), at https://www.wto.org/english/tratop_e/dispu_e/farwellspeechhzhao_e.htm.
23 Leigh Hartman, Blinken Presses Beijing on Violations of Rules-Based Order, Share America (Mar. 22, 2021), at https://share.america.gov/blinken-presses-beijing-violations-rules-based-order.
24 Secretary of State Antony Blinken on the Threat Posed by China, CBS News (May 2, 2021), at https://www.cbsnews.com/news/antony-blinken-60-minutes-2021-05-02.
25 Office of the U.S. Trade Rep. Press Release, Joint United States – European Union Statement on Addressing Steel and Aluminum Excess Capacity (May 17, 2021), at https://ustr.gov/index.php/about-us/policy-offices/press-office/press-releases/2021/may/joint-united-states-european-union-statement-addressing-global-steel-and-aluminum-excess-capacity.