America’s Short Wall Against China
America’s Short Wall Against China
Despite Joe Biden abandoning Afghanistan, his administration has done well in garnering support for Ukraine, strengthening U.S. defense alliances in the Pacific, and assisting Israel in responding to Hamas’s terrorist attack.
However, there is a gap in Biden’s foreign policy created by a protectionist economic approach.
At the core of the Biden administration’s foreign policy is the belief that although the United States has many dynamic resources, deep private and public capital markets, relatively lenient legal immigration policies, world-class universities, strong Chapter 11 bankruptcy protections, and a uniquely creative and skilled workforce, businesses in America cannot thrive domestically or internationally unless the government finances them and protects them from competitors.
The implications of this fundamental misconception are both geopolitical and economic. Biden failed to reaffirm the U.S.’s accession to the Trans-Pacific Partnership, a trade agreement with 12 dynamic Asian countries that former President Barack Obama signed but Trump rejected.
Instead, Biden offered an empty alternative in the Indo-Pacific Economic Framework, a vague pact that the White House has readily admitted is not a trade agreement. The administration misses the opportunity to lower tariffs and enhance labor and environmental standards on imports, directly benefiting China. In 2021, China applied to join the TPP in place of the United States.
Biden’s administration’s ‘Buy American’ restrictions have emphasized supply chains, penalizing foreign companies like Samsung and Toyota that have created numerous jobs in the United States and souring the allies the U.S. will need in future conflicts with China.
Biden has maintained Trump-era tariffs, which even he has described as failures. The Global South is eager for trade and international investment, but Biden’s team is handing these trade opportunities to Chinese businesses.
This not only misses mutually beneficial economic opportunities but also gives developing countries little reason to support the United States, especially when Washington seeks aid for Ukraine and Israel.
Continuing Biden’s foreign policy stance prevents the U.S. from achieving an economy that can match or surpass China, particularly as Beijing deepens its collaborations with Moscow and Tehran.
The guiding principle of U.S. policy towards China should be to compel or encourage it to become a responsible economic and geopolitical stakeholder, playing by international rules in this framework.
The Biden administration has supported the ‘small yard, high fence’ approach to prevent China from accessing critical technologies like advanced semiconductors, protecting a limited number of technologies but applying harsh secondary sanctions threats against both adversaries and allies alike.
Limiting sales to China risks alienating allies who share U.S. security goals, invest in American companies, purchase large quantities of U.S. products, and boast advanced companies that American firms rely on for technological innovations and production capacity.
For instance, imposing unilateral restrictions on chip-making tools and telling allies to follow the U.S. strategy faced opposition in both The Hague and Tokyo.
American allies seek a U.S. economic strategy that helps them reduce their reliance on China.
Washington should have long ago intensified U.S. financial restrictions on China’s military technologies and reduced dependency on Chinese products in critical areas like pharmaceuticals.
However, a better approach to China also offers trade benefits to allied countries in the form of an economic NATO, asking allied governments to prevent companies from entering markets where China’s economic warfare limits them and increasing public demand for products China penalizes. The U.S. should also grant more licenses to friendly countries to produce critical products for U.S. defense industries.
In a Chicago Council on Global Affairs poll in September 2023, nearly 74% of Americans believed that trade is beneficial for the U.S. economy, almost the highest level in history. About 80% thought it was good for their standard of living, and 63% believed it was good for job creation. In a Reagan Institute poll in July 2023, nearly 58% of respondents believed negotiating favorable trade agreements should be a foreign policy priority, and 62% of Republican respondents supported signing a trade agreement with Asian countries if told it was designed to counter China’s economic power.
The problem with the U.S. strategy towards globalization over the past 20 years wasn’t that Washington allowed too much freedom in trade, but that it allowed trade that didn’t create reciprocity, trade that didn’t level the playing field for American companies to compete with foreign counterparts.
Primarily, America’s trade deficit with China from 2001 to the end of that decade, when China was admitted to the World Trade Organization, cost the U.S. approximately 37 million jobs. Three-quarters of these lost jobs, 28 million, were in manufacturing.
After Washington allowed Beijing to benefit from free trade without being required to enforce rules, the consequences of unequal trade with China affected all federal areas of the United States.
China maintained industrial subsidies, stole intellectual property, forced companies into joint ventures, and restricted access to its market, methods that continue to this day.
In addition to imposing more restrictions on China, the U.S. should engage in more meaningful trade negotiations with Indonesia, the Philippines, Switzerland, Taiwan, and the United Kingdom. Washington’s current lack of an effective economic line of operation makes U.S. strategy overly militaristic.
Allies do not want a war with China and do not want a moral crusade against authoritarianism. They want an economic strategy that helps them reduce reliance on China and remain successful.
Good and innovative trade policy can not only create a larger playing field—a larger group of countries adhering to fair rules and norms—but also build taller walls by encouraging more voluntary cooperation against China and others when the Chinese do not play fair.
