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A worker handles an aluminium product at a factory in south China’s Guangxi Zhuang Autonomous Region. China’s gross domestic product expanded 8.1 per cent year on year in 2021, the fastest in a decade. Photo: AP
Opinion
Editorial
by SCMP Editorial
Editorial
by SCMP Editorial

US should review its flawed trade policy

  • After a year in office, Joe Biden is yet to move away from the destructive tariffs of his predecessor and it is the Americans who are suffering, not the Chinese
SCMP Editorial
SCMP Editorial
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United States President Joe Biden took office a year ago promising a shift from the destructive policies of his predecessor, Donald Trump. Of them, trade tariffs against rivals and allies alike were perhaps the most in need of review.
But there has been little change, the moves on European steel and aluminium having been replaced by a quota system and the most far-reaching, against China that prompted tit-for-tat penalties, are still firmly in place. The failure of the strategy is apparent, despite the economic impact of the Covid-19 pandemic; the surplus between the countries is mounting and it is American consumers, not the Chinese economy, who are suffering.

Rather than formulating its own China policy, the Biden administration has instead toughened the approach it inherited from Trump. More Chinese companies and entities have been sanctioned and efforts made to coerce allies to join its bid to economically and politically isolate Beijing.

But the strategy has flopped, if growth rates and import and export data are proof; China’s gross domestic product expanded 8.1 per cent year on year in 2021, the fastest in a decade, and its global trade surplus grew to US$676 billion, likely the highest for any country. The amount that China’s exports to the US exceeded imports rose 25.1 per cent from a year earlier to US$396.6 billion.

US President Joe Biden says he has no intention of lifting tariffs against China as Beijing had not lived up to promises made in the phase one trade deal two years ago. Photo: Reuters

Although the surplus has long been an irritant in relations for Washington, there has been scant mention of it as the US struggles with the coronavirus. American inflation has hit 7 per cent, the highest since 1982, rising costs in part the result of supply chain disruptions and the passing on of tariffs by importers to consumers.

US imports and exports have fallen in volume, reducing options for shoppers and further increasing prices. It is a far cry from what Trump and anti-China lawmakers contended when imposing tariffs, their claims being that penalties would damage the Chinese economy and give Washington leverage over Beijing.

Biden said on Wednesday he had no intention of lifting tariffs against China as Beijing had not lived up to promises made in the phase one trade deal two years ago. Envoys have been talking, but are yet to announce a date to resume negotiations.

The anniversary is reason to accept reality and review policies to get ties back on track.

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