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Why did Trump’s trade war on China fail? What should Biden do?

US President Joe Biden can avoid the mistakes of the past committed by his counterpart Donald Trump in dealing with China, and he must formulate an effective policy to ensure the proper functioning of relations and the achievement of common interests.

In this report – published by the American National Interest, writer Simon Lister said that Trump was following a bold commercial strategy, imposing tariffs, renegotiating trade agreements and accusing other countries of exploiting the United States.

Mainly, in the field of trade, Trump has targeted China, in word and deed. However, after 4 years in office, Chinese trade practices are almost unchanged, which raises the question of the current fate of US trade policy: Why did Trump’s trade strategy fail? And what should the Biden administration do instead? The writer wonders.

The Trump administration’s efforts to tackle Chinese trade practices began with an investigation, then turned into tariffs (met with retaliatory tariffs from China, then more tariffs by the Trump administration) and concluded with a trade deal.

However, the achievements are not clear. Most of the additional and retaliatory definitions still apply. Exports to Beijing were not up to expectations, as the Chinese market did not open fully, except for two sectors, the writer says.

Economies around the world have deteriorated and trade slowed due to the Coronavirus, but the failure of US trade practices was evident before this crisis. But why has the Trump administration achieved little in the way of its efforts, especially with regard to China?

What have I done?

The writer says that the Trump administration believed that it could solve the “China problem” on its own. Instead of coordinating efforts with other countries, reviewing the World Trade Organization or some other multilateral forum, the administration took unilateral decisions regarding China and imposed tariffs in accordance with domestic law.

But this approach is not important anymore if US governments take the objections of China (or the European Union, Canada or any other country) – to unfair trade practices – seriously and (and) question them in neutral forums.

Playing the role of attorney general and judge in a commercial case, as the Trump administration has done in this context, is unreliable. It would almost certainly appear that China (or the European Union or Canada) is violating trade obligations or behaving unfairly. However, this question cannot be resolved by looking only at the legal summaries of one party, according to what the writer believes.

The Trump administration believed it could solve the China problem on its own instead of coordinating efforts with other countries (Reuters)

Indeed, this type of unilateral decision may be counterproductive and make the desired reforms unlikely, making it politically difficult for the offending party to change its policies.

The Trump administration and its supporters may argue that past administrations have taken a multilateral approach that has failed, or they may claim that these administrations “took no effective action” on China. But history tells another, more nuanced story. China has been a member of the World Trade Organization since 2001, so there are only two administrations concerned with this point.

Deal the Bush administration

In the first place, the Bush administration was the first to deal with China as a member of the World Trade Organization. Beijing was enjoying a (transition) exemption period before it came under pressure to comply with the organization’s obligations.

But by the time the exemption period expired, the United States was engrossed in its war on “terrorism” and was unable to give China the attention it deserved. In fact, the Bush administration’s adventures in the Middle East needed Beijing’s approval, so the Bush business team was not in a position to tighten its pressure on China, the writer says.

On the other hand, the Bush administration filed some WTO cases against China (after the exemption period) but its efforts were relatively limited. Thus, it is not only related to the fact that this administration took the multilateral approach and failed.

In other words, when the Bush administration took a multilateral approach, the results were really good. However, management’s attention was distracted by other issues. Consequently, it has not been able to give Chinese trade practices the attention it deserves in the lawsuits brought by the World Trade Organization.

What did the Obama administration do?

The writer says: The Obama administration took the torch, as the foreign policy team was looking to escape from the quagmire of the Middle East, and the so-called Asian axis of focus was an essential part of the foreign policy it chose as a possible exit.

He mentioned that China was the focus of this effort, as the Obama administration proposed a trade deal between the countries of the Pacific Ocean known as the “Trans-Pacific Partnership”, which imposed economic pressure on China.

Ultimately, the Obama administration was able to complete negotiations with 11 other countries. Unfortunately, however, the deal fell victim to US domestic policy, as Republicans in Congress were hesitant to support the Obama administration at a time when the left rebelled against the entire process.

In general, all the Biden administration needs to do at the moment is learn from these mistakes and take more effective action this time.

What should the Biden administration do?

Initially, the Biden administration should consider China’s pledges to join the World Trade Organization given that these pledges are broad and continue to be beneficial for opening the Chinese market. However, these pledges became somewhat promising and could be used to supplement new undertakings.

This calls on the Biden administration to include pursuing Chinese business practices on its agenda by working with allies to sue Beijing and negotiate with it to ease restrictions. The new administration will have to take some specific steps:

The Biden administration should consider China’s pledges to join the World Trade Organization (Reuters)

FirstThe Biden administration should withdraw from the various trade wars the United States is fighting with the Allies, and focus on working with them on China issues instead.

Second, This administration should lead concerted efforts to file lawsuits against China under the current World Trade Organization provisions. This approach has reportedly been successful in the past. And if the administration refocused on it, more and more closely with like-minded governments, it might be more useful.

Third, The Biden administration should also seek to pressure China to sign new commitments. For example, pressuring it to join the World Trade Organization agreement on government procurement and passing more purchase contracts to foreign suppliers.

Through this concerted effort, the United States and the rest of the parties can send a clear signal of what China must do to play a fundamental role in the trading system. The Biden administration should also continue to pressure Beijing to restructure its economy to become more market-oriented, with private companies and market forces playing a greater role.

This would – the writer asserts – would bring about a radical change in China, but there would be internal obstacles that the Beijing government would face even if it wanted to do so. However, a clear and unified message from leading democratic market economies is the most effective way to pursue this agenda.

With regard to the goal of addressing Chinese protectionism and other wrong business practices, the causes of past failures are clear, but the Biden administration could pursue a potential strategy for success if it wanted to, so the writer concludes his report in the National Interest.

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