Joe Biden and Xi Jinping. Biden on the right. (Photo by Chip Somodevilla/Getty Images)
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President Joe Biden has taken the dispute with China to a new level, far beyond anything his predecessor Donald Trump has done or even suggested. Before Trump, presidents tended to categorize America’s relationship with China as a partnership of sorts. There have been complaints about some Chinese practices, but no action. Trump changed that. He labeled China as an economic competitor and imposed high tariffs on Chinese goods entering that country. Not only has Biden maintained these tariffs, but he has also imposed export controls and visa restrictions, as well as restrictions on investment flows. The recently passed CHIPS for America Act adds subsidies for domestic semiconductor production.
When Trump began levying tariffs on Chinese goods in 2018, commentators and many academics reacted very critically. Some argued that the levy would hurt America’s economy more than China’s. This claim has always been dubious, since sales in America are much more important to China than sales in China to America. Others feared, needlessly as it turned out, that the tariffs would lead to crippling retaliation not only from China but from other nations as well. More telling around 2018 were the complaints that tariffs run counter to free trade and globalization, on which elite opinion seemed to believe political liberalization and global economic prosperity depended.
Trump defended his actions, albeit inarticulately. He claimed he has no desire to stop world trade, but has used tariffs to pressure Beijing, its unfair trade policies such as using domestic subsidies and stealing patents, and its insistence on foreigners doing business in China , abandon transfer of technology and trade secrets to a Chinese partner. That White House statement did little to stop criticism, while the tariffs did little to change Chinese policy.
Now, less than four years later, and without a word of criticism, the Biden administration has gone much further. This White House has maintained all Trump tariffs for the same reasons the Trump White House declared them. US Trade Representative (USTR) Katherine Tai has repeatedly stated that they offer “significant leverage” to get Beijing to change its unfair trade practices. In addition, the current administration, with the recently passed CHIPS for America Act, has introduced export controls and subsidies of the kind China uses to support its domestic industrial development, in this case supporting American domestic semiconductor production. Other legislation making its way through Congress and clearly supported by this White House would place limits on American investment in China.
The latest action uses the CHIPS for America Act to oblige the Bureau of Industry and Security (BIS) to limit China’s access to advanced semiconductors, chipmaking equipment and supercomputer components. Already in response, major semiconductor toolmaker ASML has told its American staff to stop servicing Chinese customers, although, as is typical in Washington, TSMC, Samsung and SK Hynix have received exceptions that allow them to allow to continue to supply similar devices to China.
It is interesting that while Biden continues to up the ante on China, he has received none of the criticism that the commentatorium and academic community have heaped upon Trump. Partisan politics might explain the difference. Much of the commentators and academic community identify with the party currently in power, as well as displaying personal and intense hostility toward Trump. But if partisan sentiment can explain some of this difference, it is more likely and interesting how this lack of criticism captures a sharp decline in elite support for globalization and free trade. It’s a remarkable turn and apparently a complete one in just 3-4 years.
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