The more things change in terms of control over Washington, the more they will stay the same in terms of U.S. economic policy toward China. That was the unstated message of a speech by U.S. Trade Representative Katherine Tai on Monday, in which she expressed a view of China’s role in global commerce that was far better articulated, but no less jaundiced, than that of President Donald Trump.
In January 2020, just before the coronavirus pandemic jolted the U.S. economy, Mr. Trump had reached a kind of truce with China, agreeing to reduce some of the retaliatory tariffs he had earlier imposed on $360 billion in Chinese goods, in return for Beijing’s promise to buy $200 billion in U.S. products while adjusting its more blatant protectionist practices. Treating this deal as a point of continuity between the Trump and Biden administrations, Ms. Tai took China to task for failing to keep its side of the bargain and offered no substantial letup in Mr. Trump’s tariffs. Instead, she portrayed the two countries as locked in a long-term struggle for global market share, which, due to Chinese bad faith, requires the United States “to deploy all tools and explore the development of new ones.”
It’s hard to disagree with Ms. Tai’s take, since China’s behavior has thoroughly refuted the hopes, once widespread in both U.S. political parties, that trade would mutate China into a pillar of the “rules-based” global order. Not only is Chinese President Xi Jinping doubling down on a state-run economic model; he is also bullying neighbors, most recently through a swarm of military flights into democratic Taiwan’s air defense zone. Clearly, there can be no business as usual with Mr. Xi’s China — also engaged in a cultural genocide of its Uyghur minority.
At the same time, there are undeniable costs — to Americans — of the tariffs Mr. Trump imposed and President Biden will keep. In July, Treasury Secretary Janet L. Yellen candidly acknowledged that tariffs “are taxes on consumers.” The ultimate goal of U.S. policy — however difficult to achieve — should be mutually beneficial trade liberalization over the long run, as opposed to Mr. Trump’s simplistic notion that the United States could somehow arm-twist its way to a trade surplus with China and everyone else. Ms. Tai indicated that U.S. importers will be able to apply for selective exemptions from the tariffs, but that empowers lawyers and bureaucrats, not consumers.
The most powerful “tool” the United States might yet wield in negotiations with the world’s second-largest economy could be a united front with other countries that share our concerns. To her credit, Ms. Tai promised to “work closely with our allies and like-minded partners,” and touted a new United States-European Union Trade and Technology Council, which is fine as far as it goes — the United States is still talking with Europe about ending Mr. Trump’s tariffs on aluminum and steel.
What could have created a truly impactful U.S.-led counterweight to Beijing was the 12-nation Trans-Pacific Partnership that President Barack Obama negotiated toward the end of his presidency. Mr. Trump spurned it and Mr. Biden, bowing to protectionist sentiment in his party, shows no signs of reviving it. The president should change that, or else he’ll be retaining not only what his predecessor got right about China — but also his mistakes.