Are the US and China coming to a settlement over their conflicts, and working to resolve other issues that are plaguing the world? That, really, would demonstrate the kind of leadership that the world needs from them at this moment.
The Western media is full of China’s fictional wrongs: a monetary crunch in the real estate market, an overall projection of debt, and other problems. However, much of the go-slow is the consequence of US methods that wish to sluggish China’s growth. Such US policies violate World Trade Organization (WTO) rules and are a danger to international fortune.
Close to 2015, US policymakers came to observe China as a threat rather than a trade partner. China’s economic upswing really began to distress US policymakers when China announced a Made in China 2025 policy to stimulate its progression to the cutting edge of robotics, information technology, renewable energy, and other advanced technologies.
At the same time, China announced its Belt and Road Initiative to help build modern infrastructure throughout Asia, Africa, and other regions, mainly using Chinese finance, companies, and technologies. The US took aim at China to sluggish China’s swelling growth.
The US President Barack Obama first proposed creating a new trading group with Asian countries that would exclude China, but presidential candidate Donald Trump went further, promising absolute protectionism against China. After winning the 2016 election on an anti-China platform, Trump imposed unilateral tariffs on China that openly violated WTO rules.
To confirm that WTO would not rule against the US methods, the US disabled the WTO appellate court by blocking new appointments. The Trump administration also obstructed products from leading Chinese technology companies such as ZTE and Huawei, and advised US allies to do the same.
When Joe Biden came to office, many anticipated Biden to inverse or ease Trump’s anti-China strategies. However, the opposite happened. Biden doubled down, not only upholding Trump’s tariffs on China but also signing new executive orders to limit China’s access to advanced semiconductor technologies and US investments.
In a process labeled friend shoring as opposed to offshoring, the US firms got advice informally to shift their supply chains from China to other countries. In executing these methods, the US absolutely overlooked WTO principles and procedures.
The US anti-China strategies come out of an acquainted playbook of policymaking. The purpose is to thwart economic and technological rivalry from a main enemy. The US politicians invoke aggressive oratory, calling China a rival.
The consequences are visible in a reversal of China’s exports to the US. In the month that Trump came into office, January 2017, China accounted for 22 percent of US merchandise imports. By the time Biden came into office in January 2021, China’s share of US imports had dropped to 19 percent.
As of June 2023, China’s share of US imports plummeted to 13 percent. Between June 2022 and June 2023, US imports from China fell by a whopping 29 percent.
Obviously, the dynamics of China’s economy are complex and hardly driven by China-US trade alone. However, Biden seems unlikely to ease trade barriers with China in the lead-up to the 2024 election.
China has more room for maneuver in the face of US protectionism. Most importantly, I believe China can substantially increase its exports to the rest of Asia, Africa, and Latin America, through policies such as expanding the Belt and Road Initiative.
The US endeavor to contain China is not only unwise but also ordained to miscarry. China will find partners throughout the world economy to support a continued expansion of trade and technological advances. The two countries should choose cooperation rather than confrontation. The world will benefit from that.
