Thu. Sep 29th, 2022

ST HSIEH

May 23, 2022

President Biden’s news conference in Tokyo this morning made global headlines when he repeatedly announced that he is committed to take military actions if Taiwan and China go to war. His statements were short but clear so much so his White House staff, again, had to “walk back” means without directly rebuking Biden but politely saying that “please do not pay attention what he just said, the US policy has not changed.” There are many important statements by Biden at the news conference, unfortunately almost all got lost from the public news media. Biden’s public commitment to defend Taiwan clearly confirmed the major and only purpose, for his first visit to Asia as President of the US, is to “contest or contain China.” Clear it was Biden’s intention, but his foreign policy team has been very careful with a plan that he and Xi will have a virtual summit soon, hopefully stabilizing the contentious US-China relation. After Biden’s comment on Taiwan today, we expect the virtual summit is still possible but instead of stabilizing the bilateral relation, it could be another grand standing encounter by both leaders. Someone has termed this kind of summit as meeting of deaf people, means no one is listening to what the other party is saying. Practically, there is no result or consequence.

The core challenge for Biden’s team is lacking a focused theme on what Biden presidency is all about and/or priorities. Biden has to realize that he has maximum four years leading the US forward, he also has to realize his team has limited “bandwidth” to deal with world affairs. His team may be highly qualified in making policies, but policy announcement does not mean at all this policy will be implemented anytime soon. Even a policy is being implemented, the expected result/impact will not be instant. There are political factors as well as public opinion factors that take time to overcome.

Biden is a self-professed foreign policy expert with is years of services in the senate and as VP to President Obama. He does have the “record” but it is not obvious that Biden, as President of US, has achieved much or made the world better. The Ukraine war is still on going and no one knows when the war will end, hopefully it could be settled soon. Biden should focus on ending the war, but it is not clear what is Biden’s strategy!

China is the greatest strategic challenge to the US now and near future, Biden and his team acknowledged often. It is true, however there is no Biden’s “China strategy” yet. Even Secretary Blinken’s featured speech on May 26th is not expected to reveal much detail to the public. Biden is still “considering” lowering some tariffs against China imposed by President Trump who left the White House almost one-year and half already. There is no one is happy with this status quo, not the US business community, not the trade representative, no politicians from right or left are happy. Most importantly, the global economy is under attack by the Trump initiated tariff war, COVID-19 pandemic, the Ukraine war, Biden needs to show leadership and move forward quickly.

There is no time to waste, the US mid-term election is on November 8. 2022 and Democratic is projected to lose majority in the Senate or Congress or both.

Debate Over Tariffs Reveals Biden’s Difficulties on China Trade

NY Times Ana Swanson Mon, May 23, 2022, 11:25 AM·8 min read

WASHINGTON — President Joe Biden’s decision Monday to try to align with Asian partners to form an economic bloc against China comes at a moment of frustration over his administration’s economic approach to Beijing, with some White House advisers pushing the president to move away from the Trump-era policies he criticized and others arguing that Biden risks being seen as weak on China if he relents.

Some officials have grown frustrated that U.S. trade relations with China are still defined by policies set by President Donald Trump, including tariffs imposed on more than $360 billion of products and trade commitments made during a deal the United States and China signed in early 2020.

Concerns about the United States’ economic approach to China have taken on new urgency amid rapid inflation. Treasury Secretary Janet Yellen and other officials have argued that the full suite of tariffs served little strategic purpose and could be at least partly lifted to ease the financial burden on companies and consumers.

But those ideas have met pushback from other senior administration officials, such as some top White House aides, the U.S. trade representative and labor groups. They argue that removing the tariffs — which were put in place to punish China over its economic practices — would constitute unilateral disarmament given that Beijing has yet to address many of the policies that prompted the measures in the first place. With the midterm elections looming, some administration officials are worried that removing tariffs would make Democrats vulnerable to political attacks, according to interviews with more than a dozen current and former officials.

The business community is also losing patience with the absence of a clear trade strategy nearly a year and a half into Biden’s presidency. Executives have complained about a lack of clarity, which they say has made it difficult to determine whether to continue investing in China, a critical market.

The challenges in figuring out how to confront Chinese trade practices have become harder amid Russia’s invasion of Ukraine. The United States was originally moving toward making changes to its trade relationship with China in early 2022, a senior administration official said, but with Beijing aligning with Moscow, Biden felt it was prudent to see how events unfolded in Ukraine with respect to the global economy and U.S. allies.

Some elements of the administration’s trade strategy are becoming clearer this week. Biden announced in Japan on Monday that the United States would begin talks with 12 countries to develop a new economic framework for the Indo-Pacific region. The countries would aim to form a bloc that would provide an early warning system for supply-chain issues, encourage industries to decarbonize and offer U.S. businesses reliable Asian partners outside China.

The framework would not contain the binding commitments for market access that are typical of most trade deals, which have proved to be a hard sell for many Democrats after the United States withdrew from the Trans-Pacific Partnership, President Barack Obama’s signature trade agreement.

U.S. officials say their goals for the framework will be ambitious and include raising labor and environmental standards and creating new guidelines for how data flows between countries. But some analysts have questioned whether the framework can encourage those changes without offering Asian countries the U.S. market access that is typically the incentive in trade pacts. And U.S. labor groups are already wary that some commitments could lead to further outsourcing for American industries.

The framework also does not try to directly shape trade with China. Many Biden administration officials have concluded that talks with China have proved largely fruitless, as have negotiations at the World Trade Organization. Instead, they have said they would try to confront China by changing the environment around it by rebuilding alliances and investing more in the United States, including through a $1 trillion infrastructure spending bill.

Senior U.S. officials hold a similar view as their counterparts in the Trump administration that the world’s dependence on the Chinese economy has given Beijing enormous strategic leverage. A classified China strategy that was largely finished in the fall argues that it is important for U.S. security to delink some industries and diversify supply chains, people familiar with the strategy say.

The administration was supposed to offer a glimpse of the classified strategy in a major speech laying out economic and security goals for China, which Washington officials and China experts expected to occur in the fall. The White House first considered having Biden deliver the speech but settled on Secretary of State Antony Blinken.

Yet the speech — which revolves around the slogan “Invest, Align and Compete,” according to those familiar with it — has been delayed for several reasons, including the war in Ukraine and Blinken contracting COVID this month. Some China experts in Washington have interpreted the delays as another sign of uncertainty on China policy, but U.S. officials insist that is not true.

Blinken is expected to give the China speech shortly after he and Biden return from Japan, say people familiar with the planning.

The speech avoids explicitly addressing how the administration will deal with Trump’s tariffs, they say. Businesses have long complained that they hurt U.S. companies and their consumers rather than China. That concern has been heightened by the fact that prices are rising at their fastest rate in 40 years, creating a political problem for the White House, which has struggled to explain how it can alleviate soaring costs other than relying on the Federal Reserve.

But Republicans and Democrats who want more aggressive policies toward China — and toward some American companies that do business there — would try to draw blood if Biden eases the tariffs.

“We need to rebuild American industry, not reward companies that keep their supply chains in China,” Sen. Marco Rubio, R-Fla., said this month after voting against a legislative amendment allowing carve-outs to the tariffs.

At a news conference in Japan on Monday, Biden said he would meet with Yellen when he returned from his trip to discuss her call to remove some of the China tariffs.

“I am considering it,” the president said. “We did not impose any of those tariffs; they were imposed by the previous administration, and they are under consideration.”

Public rifts among Biden officials have been rare, but when it comes to tariffs, the debate has spilled into the open.

“There are definitely different views in the administration, and they’re surfacing,” said Wendy Cutler, vice president at the Asia Society Policy Institute and a former U.S. trade negotiator. “There are those who think that the tariffs didn’t work and are contributing to inflation. Then you have the trade negotiator side that says, ‘Why would we give them up now? They’re good leverage.’ ”

The discussion over how and when to adjust these tariffs mirrors a bigger debate over whether globalized trade has done more to help or harm Americans, and how the Democratic Party should approach trade.

Katherine Tai, the U.S. trade representative; Tom Vilsack, the agriculture secretary; Jake Sullivan, the national security adviser, and others have argued against dropping the tariffs. Yellen, Commerce Secretary Gina Raimondo and other officials have pointed out the benefits to companies and consumers from adjusting them, people familiar with the discussions said.

Yellen has long been a voice of skepticism regarding the tariffs and has grown more frustrated with the pace of progress on trade developments, according to people familiar with her thinking. She made the case last week for removing some of the tariffs as a way to offset rising prices.

“Some relief could come from cutting some of them,” Yellen said, explaining that the tariffs were harming consumers and businesses. “There are a variety of opinions, and we really haven’t sorted out yet or come to agreement on where to be on tariffs.”

Daleep Singh, a deputy national security adviser, was more blunt in an April 21 webinar. “We inherited these tariffs,” he said, “and while they may have created negotiating leverage, they serve no strategic purpose.”

For products that do not strengthen critical supply chains or support national security, “there’s not much of a case for those tariffs being in place,” Singh said. “Why do we have tariffs on bicycles or apparel or underwear?”

But labor leaders, progressive Democrats and some industry representatives have made various arguments for maintaining tough tariffs, with several pointing to data showing that imports from China are not the main drivers of inflation.

“For a Democratic president to get rid of tariffs imposed by a Republican and basically give a free handout to the Chinese Communist Party is not something that’s really politically wise in any form,” said Scott N. Paul, president of the Alliance for American Manufacturing, which represents steel companies and workers.

Economists also believe the effect from removing the tariffs would be modest. Jason Furman, an economist at Harvard University and the former chairman of Obama’s Council of Economic Advisers, estimates that removing all the China tariffs would shave a half percentage point off the consumer price index, which grew 8.3% in April.

Still, Furman said, when it comes to lowering inflation “tariff reduction is the single biggest tool the administration has.”

The office of the U.S. trade representative this month started a statutory review of the tariffs and says its approach to analyzing them is on track. “We need to make sure that whatever we do right now, first of all, is effective, and second of all, doesn’t undermine the medium-term design and strategy that we know we need to pursue,” Tai said in an interview May 2.

Some Biden administration officials appear to favor an outcome that would lift certain tariffs while increasing other trade penalties on China, a process that would take at least several months. That could happen through a separate investigation under the so-called Section 301 process into China’s use of industrial subsidies.

© 2022 The New York Times Company

FOREIGN POLICY

Blinken to unveil long-awaited China strategy in Thursday speech

The strategy is expected to build on former President Donald Trump’s China policy, experts say.

Secretary of State Antony Blinken is hoping it’s second-time lucky when he takes the podium Thursday to outline the administration’s China strategy.

Three non-administration sources confirmed to POLITICO that Blinken will make the speech this week. A State Department spokesperson declined to comment. Blinken had intended to outline the administration’s China strategy on May 5 at George Washington University, but it was postponed after he tested positive for Covid-19 the previous day.

Multiple sources say that Blinken will underscore the administration’s existing policy toward China modeled on that inherited from the Trump administration. The speech will give an overview of the strategy rather than details on its mechanics, which along with the complete text of the document won’t be made public.

But the speech’s timing comes amid a bilateral furor fueled by President Joe Biden’s assertion on Monday in Tokyo that the U.S. will militarily intervene to defend Taiwan in the event of a Chinese invasion attempt. “The idea that, that [Taiwan] can be taken by force, just taken by force, is just not, is just not appropriate,” Biden told reporters during his two-country Asian visit.

It’s the second time since October that Biden has suggested his administration will no longer observe a policy of “strategic ambiguity” regarding U.S. willingness to defend Taiwan. “China expresses strong dissatisfaction and firm opposition to the remarks by the US side. China will take firm actions to safeguard its sovereignty and security interests,” Chinese Foreign Ministry spokesperson Wang Wenbin said Monday.

Biden’s comments were made during his four-day Asia trip designed to counter China’s growing economic, diplomatic and military influence in the region. That outreach is key to his Indo-Pacific strategy and included the Monday launch of his Indo-Pacific Economic Framework in Tokyo.

Blinken’s speech will provide clarity to government agencies, foreign governments and the ruling Chinese Communist Party that the administration’s China-focused policy and regulatory moves align with a cohesive blueprint and with specific foreign policy objectives.

The administration’s challenge is to ensure buy-in for the strategy — which hinges on building and reinforcing alliances and partnerships in Asia and beyond — to counter U.S. perceptions of China’s growing diplomatic, economic and military influence undermining Blinken’s concept of a “rules-based international order.”

“I don’t think that you’re going to hear anything in the Tony Blinken speech that hasn’t been said before and I don’t think that the goal is to come out and say something different because we have observed what the administration has done over the last 15 months,” said Bonnie Glaser, Asia program director at the German Marshall Fund of the United States. “I think the main emphasis is how we’re going to do this alongside our partners … and how we’re going to integrate our economic statecraft and technological capabilities with our diplomatic and military-slash-defense toolboxes to advance a set of objectives vis-à-vis China.”

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