Did Joe Biden raise the stakes by adopting Trump’s China policy?

Did Joe Biden raise the stakes by adopting Trump's China policy?

Did Joe Biden raise the stakes by adopting Trump's China policy?

Donald Trump received both acclaim and criticism for his efforts to impede China’s progress. Instead of reversing course, the Joe Biden administration has intensified the pressure.

Donald Trump made a crucial pledge during the 2016 US presidential election to curb China’s growing influence, which posed a threat to the United States’ position as the world’s largest economy. Trump highlighted Beijing’s unfair trade practices, such as flooding the global market with cheap products, restricting access to China’s own market, and engaging in intellectual property theft. He promised to impose tariffs on Chinese imports and revitalize the manufacturing sector in the US.

In the early stages of Trump’s presidency, the implementation of tariffs began with Chinese solar panels and washing machines, eventually extending to a wide range of Chinese goods. This significant shift in policy caught Beijing off guard, prompting retaliatory actions targeting American products.

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Pressure on China intensifies during Biden’s presidency

Did Joe Biden raise the stakes by adopting Trump's China policy?

Looking ahead to 2021, it was widely anticipated that the Joe Biden administration would reverse many of the policy mistakes made by Trump. However, contrary to expectations, the Democratic president chose to maintain most of the tariffs in place.

Furthermore, he implemented export controls on US high-tech products, including advanced semiconductors or chips used in artificial intelligence (AI) platforms and military equipment.

Michele Geraci, a finance professor at New York University (NYU) Shanghai, stated that Biden has elevated the pressure on China to a new level. According to Geraci, while Trump primarily focused on addressing the trade deficit, Joe Biden has made containing China a more profound philosophical and political matter.

Despite various studies indicating that the tariffs have negatively impacted the US economy, Joe Biden has faced less criticism than Trump for his approach towards China. The US-China Business Council discovered that the policy resulted in the loss of nearly a quarter of a million American jobs.

Antonio Fatas, an economics professor at INSEAD Business School in Singapore, explained that once tariffs are imposed on China, it becomes politically challenging to remove them due to potential accusations of being too lenient. Fatas believes that Biden made a political calculation and decided it was better to maintain the tariffs.

In contrast to his Republican predecessor, Trump, who often acted unilaterally, Biden recognized that America’s allies may not perceive China’s threat as seriously as his administration did, or that some allies, such as the European Union, might be slow to respond.

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Joe Biden rallied allies to contain China

Biden enlisted the support of allies to counter China’s influence. Following his inauguration, various geopolitical events unfolded, including the Taiwan issue, which prompted the Democratic president to pledge that the US military would protect the island in the event of a Chinese invasion. Subsequently, Biden reached out to US allies for their support.

According to David Sacks, an Asia studies fellow at the Council on Foreign Relations (CFR) in Washington, there has been a noticeable shift towards a more collaborative approach with Biden at the helm. The US has been closely aligned with the European Union and its Asian allies, demonstrating a stronger multilateral stance.

Sacks further highlighted the enhanced position of the US in Asia under Biden’s leadership. This includes stronger trilateral cooperation between the US, Japan, and South Korea, as well as the establishment of the AUKUS security pact between the US, UK, and Australia. AUKUS involves assisting Canberra in acquiring nuclear-powered submarines.

Furthermore, there has been an unprecedented increase in security cooperation between the US and Taiwan. These developments create an unfavorable dynamic for Beijing, making it difficult for Chinese policymakers to feel at ease in the region under Biden’s administration.

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Chip embargo will slow down, not stop, China’s ambitions

Biden’s chip embargo, initially declared in October 2022 and later expanded to include top-notch AI chips, blocks the sale of US-designed semiconductors to China.

China has prioritized technological superiority for its future economic development, but it lags behind the US by 10 to 15 years in advanced chip design.

Despite US efforts to maintain this lead, the embargo has actually empowered Beijing. China has allocated $250 billion (€230 billion) for domestic chip production over the next decade.

According to Geraci, the embargo is counterproductive. China’s response is simply to produce the chips themselves if they are not sold to them.

Geraci, a professor at NYU Shanghai, explained to The Diplomat News that China’s investments will narrow the gap to 5-8 years. Additionally, the US will lose a significant market for its chip exports.

He emphasized that Washington’s approach of viewing the situation as a zero-sum game is flawed. If China succeeds, it doesn’t mean the US will automatically lose. It’s crucial not to hinder China’s growth, as it will be detrimental for both countries.

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Who does Beijing prefer to have in the White House?

According to Sacks, Beijing would prefer continuity with the current Democrat incumbent rather than the uncertainty that comes with Trump. While they may not like Biden’s policies towards China, they have a better understanding of what the next four years would look like.

Fatas suggests that a reelection of Biden could lead to increased trade restrictions by the US as Washington seeks to restrain China’s economic and military aspirations.

Geraci, however, believes that a Trump win would be better for US-China relations as they would have common ground to discuss, whereas a second Biden term would not allow China to change its political system to please the US.

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