On China, 4 Steps (Including A Gift From Trump), For A President Biden

Biden might not be soft on China, as Trump alleges.

President Trump’s tariffs against China could benefit a President Biden, should he win the … [+] No matter who wins the U.S. presidential race, former Vice President Joe Biden or current President Donald Trump, China loses. The only question is this: Under which man would the United States suffer less? If President Trump wins reelection, expect him to keep in place his unilateral or “go it alone” approach to bringing about change in trade policy, and his predilection for bilateral rather than multilateral trade agreements. Not since the passage of the North America Free Trade Agreement, largely negotiated by the first President George Bush and pushed through Congress by President Bill Clinton more than a quarter century ago, has a president had such a consequential impact on U.S. trade policy. That includes the trade war with China, which has now consumed more than half Trump’s presidency (with no end in sight), but also tariffs targeting allies like Canada, Mexico, Brazil, the United Kingdom, Italy, France and South Korea, among others. The president’s critics can’t quibble with the moniker he gave himself: Tariff man. Four steps for Biden But if we find ourselves looking at a President Biden, it it my hope that he understands what a gift President Trump will have left for him. While certainly either man will largely be consumed by the coronavirus pandemic and resultant economic collapse, a President Biden would be wise to do four things in rapid fire: Don’t move to reverse Trump’s tariffs on the majority of Chinese imports into the United States. Not immediately. First, he should use his decades of experience on Capitol Hill to let the House and Senate know that he understands that in the new Cold War, it’s the United States and China. Russia is largely inconsequential as a world power, particularly given the United States’ rise as an energy power, which is about all the Russians have of consequence. Let the House and Senate know he will be needing their support on his plan to work to isolate China. Having a Senate majority would make that easier but Biden’s decades in the Senate should help even with a GOP-led Senate. Next, announce plans to reconstitute the Trans-Pacific Partnership. That was a gift, nicely wrapped with a bow, that President Barack Obama had left for President Trump. The TPP was an agreement among 12 Asian, North American and South American countries that all understood the threat, or at least the challenge, China posed to the global order, specifically as it related to trade policy. TPP was a thinly disguised attempt to hem in China. One of Trump’s first initiatives as president was to walk away from it. The other 11 nations subsequently passed their version. A President Biden would be wise to re-engage on the issue. There’s even a slam-dunk opportunity to bring India into the fold, since it is now negotiating with Japan and Australia on a trade agreement that serves to also put the squeeze on China. Japan and Australia were part of the original TPP . Third, reopen the Transatlantic Trade and Investment Partnership , better known as “T-TIP,” presumably so you could pronounce the acronym. Obama, after reading the tea leaves, abandoned this one during his second term. Of course, Trump not only didn’t resume the talks but instead slapped tariffs on a host of European goods, part of a lengthy and complicated Airbus-Boeing BA +0.9% World Trade Organization spat, while opening negotiations with the United Kingdom, which had left the European Union. During these T-TIP negotiations, on the side, a President Biden would be able to enlist E.U. support for efforts to further isolate China, whether the negotiations are fruitful or not. But would a President Biden continue to apply the heat that President Trump has applied on China? Trump will be trying to paint Biden as a stooge for the Chinese, that he will be in the pocket of Xi Jinping. I’m betting not. Generally speaking, Democrats have for the last several decades been the brakes and Republicans the gas pedal on globalization and free-trade deals. I don’t see Biden stepping too far out of that orthodoxy. Biden comes from steel territory in Pennsylvania. He’s folksy. Uncle Joe. Whether it’s an act, or at least partly one, or not, he is the first Democratic Party candidate for president in 36 years without an Ivy League degree . Think about that. Even President Trump has an Ivy League degree. (Republicans have to go back further than Democrats, to Reagan.) What China should fear More fearful to China than a reelected Trump coming head-on would be most of the world’s nations standing shoulder to shoulder and demanding that China meet its obligations to the WTO, led by Biden. To be fair, if President Trump is reelected and continues his policies, the Chinese will continue to suffer the impact of those tariffs. Its economy was in tough shape before the coronavirus, and Trump’s tariffs had a hand in that. We have been a big and growing customer for years. But, under a second term of President Trump, U.S. exporters will continue to lose as well. They are the collateral damage. The Chinese have historically been leading buyers of everything from U.S. aircraft to soybeans, pork to oil, motor vehicles to cotton. If Biden should win, and take advantage of the gift left him by President Trump, he would enlist the leverage of having most of the world’s largest economies working to bring China into the 21st Century global order. No matter which candidate wins the presidential race, China is in for a tough ride. Brining them around is better than taking them down. Because if the world’s second largest economy continues to falter, that creates pain elsewhere. One thing’s for sure: “Tariff man” has handed Biden an opportunity to use muscle he might not have realized he had, those tariffs.

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