Then US president Donald Trump, surrounded by business leaders and administration officials, prepares to sign a memorandum on intellectual property tariffs on hi-tech goods from China, at the White House in Washington on March 22, 2018. Photo: Reuters

Back in April, Yale University’s Stephen Roach questioned US President Joe Biden’s China policy – in particular his trade policy: “Why has he singled out the China-Trump policy as one that is worth sustaining, when he has literally tried to wipe the slate clean of every other potential Trump policy that he inherited? That’s an important question that needs to be answered.”

It is important not just for the United States and China, but for the world economy as leaders address the challenge of recovering from the Covid-19 recession and see trade restoration as crucial.

It is also important because Biden’s predecessor Donald Trump’s catastrophically misaligned trade policies – not just on China but in his abandonment of multilateral cooperation in favour of schoolyard-bully bilateralism – have inflicted colossal economic harm which needs to be remedied.

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Six months of silence later, US Trade Representative Katherine Tai last week set about the task of answering – only to offer more procrastination. As the Financial Times Trade Secrets newsletter recounted: “Katherine Tai is extremely good at speaking fluently while revealing nothing.”

Chad Bown at the Washington-based Peterson Institute for International Economics was more polite but equally clear: “Anyone looking for a dramatic policy change toward China from the last administration will not find any evidence of it.”

So the trade war with China is not about to end any time soon. And Trump’s tariffs remain firmly in place. Combing through Tai’s carefully veiled text, Bown nevertheless identified three developments.

First, some “tariff exclusions” agreed by Trump to provide relief to US companies most ruinously affected by the tariffs will be resurrected.

Second, China’s “state-centred and non-market trade practices” ignored in the phase one trade deal remain a “serious concern”, though Tai revealed no plan for “phase two” negotiations any time soon.

Third, the US plans to “work with allies to shape the rules for fair trade in the 21st century, and facilitate a race to the top for market economies and democracies” and sees the need to “chart a new course to change the trajectory of our bilateral trade dynamic”. Absent any specifics, this is perhaps a good example of speaking fluently while revealing nothing.

Why Biden is taking his time with America’s China policy

There are obvious – albeit cynical – reasons for Biden’s procrastination on trade. Most importantly, in the face of bipartisan antagonism towards China and traditional Democrat antipathy on trade, Biden cannot afford to waste political capital on an issue – China or trade – that could jeopardise midterm election votes in November next year.

Another significant factor is the US administration’s preoccupation with defence and security rather than trade and economics.

As Wang Huiyao at the Centre for China and Globalisation noted in the Post, the administration has its sights firmly set on “Security Asia” rather than “Economic Asia”. He noted: “This failure to engage on trade is a glaring hole in America’s Asia strategy.”

Wang’s thoughts were echoed in an Financial Times editorial last week: “Without an economic dimension alongside the defence and security efforts, Biden’s Indo-Pacific strategy is a two-legged stool.”

However preposterous Trump’s claim that “trade wars are good and easy to win“, Biden is clearly afraid of the political consequences of contradicting him.

This is in spite of clear evidence that the tariff war has had no significant impact on the US-China trade imbalance – US exports to China have oscillated around US$110 billion a year over the past decade – and only inflicted harm on the US economy. The admittedly partisan “Tariffs Hurt the Heartland” lobby group calculates that the trade war has cost US companies US$94 billion.

Biden must shun Trump’s tactic of using China as a bogeyman

With perhaps more even-handed credentials, the US Chamber of Commerce calculates that more than half of America’s 50 states have suffered “extremely significant damage” from the tariff war: “American businesses and consumers are bearing the brunt of the global trade war. By now, it’s plain to see that tariffs are inflicting harm on the American economy and will continue to do so unless the administration changes course.”

Biden’s procrastination is also in spite of the likelihood that Trump’s phase one trade deal with China will fall massively short of its targets to boost US exports when it expires in about three months.

Admittedly, this shortfall is partly due to the pandemic recession, to US restrictions on “sensitive” exports and China’s retaliations, but it has fallen particularly hard on Washington state and South Carolina (exporters of aircraft and aviation parts), and oil and gas exporters from Texas.

Nor have Trump’s efforts borne fruit in diluting US investment in China, decoupling from China or reshoring US companies in China.

As a survey by the American Chamber of Commerce in Shanghai revealed last month, nearly 60 per cent of 338 US companies operating in China had increased investment over the last year, and 82 per cent expected revenue growth this year. “Speculation that some US companies might move production or supply chains out of China in the aftermath of Covid proved unfounded,” the report said.

For clarity on US trade strategy, Tai is perhaps the wrong person to listen to. Maybe commerce secretary Gina Raimondo, speaking two weeks ago, is more firmly grounded: “We have no interest in a cold war with China. It’s too big of an economy – we want access to their economy, they want access to our economy.”

This strikes me as close to the truth, but for the sake of precious midterm votes, Biden is unlikely to say so any time soon. Meanwhile, procrastination and the ghost of Trump will prevail, and as Greta Thunberg has said of climate talks, we will just get “blah, blah, blah”.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view

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This article originally appeared on the South China Morning Post (, the leading news media reporting on China and Asia.

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