The Short Wall of America Against China

The short wall of America against China

The short wall of America against China

Despite Joe Biden abandoning Afghanistan, his government has performed well in garnering support for Ukraine, strengthening US defense alliances in the Pacific, and aiding Israel in response to Hamas terrorist attack.

However, there is a gap in the middle of Biden’s foreign policy that has been created by economically supportive factions.

At the core of the Biden administration’s foreign policy is the belief that although the US has abundant dynamic resources, deep private and public capital markets, relatively easy legal immigration policies, globally renowned universities, strong protections in Chapter 11 bankruptcy, and a uniquely skilled and creative workforce, American businesses cannot thrive domestically or internationally unless the government financially supports and protects them against competitors.

The consequences of this erroneous perception are both geopolitical and economic. Biden’s reaffirmation of the US joining the Trans-Pacific Partnership, a trade agreement with 12 dynamic Asian countries signed by former President Barack Obama but rejected by Trump, failed.

Instead, Biden should offer a clear alternative in the economic framework of India and the Pacific, a vague agreement that the White House easily admits is not a trade deal. The government is missing an opportunity to reduce tariffs and strengthen labor and environmental standards on imports, benefiting directly from China. In 2021, China requested to join the TPP instead of the United States.

Biden’s administration has emphasized restrictions on American purchases in supply chains, penalizing foreign companies like Samsung and Toyota that have created a large number of jobs in the United States and alienating key allies that the United States will need in future conflicts with China.

Biden has kept the tariffs from the Trump era, which he himself has described as a factor in failure. The South is eager for global trade and investment, but the Biden team is handing over 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 is seeking assistance for Ukraine and Israel.

In continuation of Biden’s foreign policy positions, the United States must prevent China from achieving an economy that can rival or surpass it, especially as Beijing deepens its cooperation with Moscow and Tehran.

The guiding principle of US policy towards China should be to compel or persuade it to become a responsible economic and geopolitical stakeholder, playing by international rules.

The Biden administration has supported a strategy of a high fence around a small yard to prevent China from gaining access to vital technologies like advanced semiconductors, protecting a limited number of technologies while imposing severe threats of secondary sanctions against foes and allies alike.

Restricting sales to China risks alienating allies who share US security objectives, invest in American companies, purchase significant amounts of US products, and rely on advanced companies that American firms need for technological innovation and production capacity.

For example, imposing unilateral restrictions on chip-making tools and telling allies to adhere to the U.S. strategy has sparked objections in both The Hague and Tokyo.

U.S. allies are seeking America’s economic strategy that helps reduce their dependence on China.

Washington has long been intensifying U.S. financial restrictions on Chinese military technologies and reducing reliance on Chinese products in vital areas such as pharmaceuticals.

However, a better approach to China also offers commercial benefits to allied countries in the form of an economic NATO. It calls on allied governments to prevent companies from entering markets that China economically restricts and increase public demand for products that China penalizes. The United States also needs to grant more licenses to friendly countries to produce vital products for U.S. defense industries.

In a survey by the Chicago Council on Global Affairs in September 2023, nearly 74% of Americans believed that trade is beneficial for the US economy, the highest level in history, with about 80% believing it is good for their standard of living, and 63% believing it is good for creating good jobs. In a survey by the Reagan Institute in July 2023, close to 58% of respondents believed that negotiating desirable trade agreements should be a foreign policy priority, and 62% of Republican respondents supported signing a trade agreement with Asian countries if told it is designed to counter China’s economic power.

The problem with the United States’ strategy towards globalization in the past 20 years was not that Washington allowed too much freedom in trade, but rather allowed trade that did not create reciprocal actions, trade that did not create a level playing field where American companies could compete with foreign counterparts.

The US trade deficit with China primarily cost the US 37 million jobs from 2001 to the end of that decade, when China was accepted into the World Trade Organization. Three-fourths of these lost jobs, 28 million, were in the manufacturing sector.

After Washington allowed Beijing to take advantage of free trade benefits without enforcing rules, the repercussions of unfair trade with China affected all areas of the US federal country.

China maintained industrial subsidies, engaged in intellectual property theft, forced companies into joint ventures, and restricted access to its market – practices that continue to this day.

In addition to imposing further restrictions on China, the US must engage in more meaningful trade negotiations with Indonesia, the Philippines, Switzerland, Taiwan, and Britain. The current lack of a coherent economic strategy in Washington overly militarizes US strategy.

Allies are not advocating for war with China or for a moral crusade against tyranny. They are advocating for an economic strategy that helps reduce their dependence on China and ensures their success.

A good and innovative trade policy can not only create a larger playing field for a larger group of countries that adhere to fair laws and norms but also build taller walls by encouraging more voluntary cooperation against China and others when the Chinese are not playing fairly.