Biden administration statements indicate that the United States may remove at least some of the $300 billion in tariffs imposed on China by the Trump administration.
It would be a serious mistake to do so. For a start, most economists suggest that the waiving of tariffs would provide only a marginal benefit in terms of restraining U.S. inflation rates. But the national security costs of doing so would be far higher. Biden would be throwing a lifeline to Xi Jinping just as the Chinese leader needs it most. As the South China Morning Post reports, party officials are desperate to bolster economic growth in the second part of 2022.
This takes on added importance for Xi in the context of two other factors.
First off, a bolstered economy would help reduce pressure over rising living costs, a demographic crisis, and growing public anger over Xi’s fanatically harsh COVID-19 “zero-case” strategy. Were the U.S. to remove tariffs, it would also send a signal to other nations to further their own trade with Beijing. The impact would likely be most significant with Europe, which has sought to balance increasing concern over Xi’s foreign policy alongside the desire of its business lobby for expanded China trade. Put another way, where the U.S. leads on tariff removals, the world would follow to Xi’s distinct benefit.
Second, there’s the 20th Communist Party Congress later this year. Xi wants to use that event to adorn himself with a new title and further consolidate his control over the party. If the economy continues to sputter, however, Xi’s ability to demand loyalty from party elites and unquestioned fealty from his 1.4 billion citizens will suffer in kind. The U.S. should seek to frustrate those ambitions.
Because the basic truth should be clear.
Communist China poses an existential threat to human freedom and prosperity in the 21st century. Only Beijing has the intent and the means to replace the hard-won post-Second World War democratic international order with its own feudal mercantile order. That is to say, an order under which freedom and prosperity are transferred from voters and capitalism-under-law to the diktats of Xi’s throne. It is thus in both the U.S. national and the global interest that the Chinese Communist Party be weakened, not strengthened. This is not a hypothetical concern. Considering how China treats its own citizens with a mixture of repression, disappearances for jokes, and Nazi-style eugenics, its ambitions for the rest of us are unlikely to be pleasant.
Instead of helping Xi, Biden should strengthen new trade relationships centered on fair dealing and the relocation of supply chains from Chinese soil. Biden deserves credit, for example, for his new Indo-Pacific Economic Framework. The key is to recenter economic relationships away from Beijing, not further under its dominion. This is no time to follow the communist purchased moral corruption of American businessmen such as Intel’s Pat Gelsinger and Ray Dalio.
Rewarding China with reduced trade barriers wouldn’t be a mistake simply for U.S. interests. Think back to Biden’s inaugural address pledge to prioritize alliances and “be a strong and trusted partner for peace, progress, and security.” Bearing that commitment in mind, spare a thought for China’s outbursts at two of America’s very closest allies in recent days.
First up, Beijing’s response to recent Japanese moves to strengthen security cooperation with Taiwan. On Tuesday, Beijing’s Global Times state media outlet, which operates at the behest of Chinese foreign policy chief Yang Jiechi, declared that “it’s necessary for Asia-Pacific powers to give Japan a blow to the head, so that it comes to its senses.” Then, there was China’s response to Australia’s complaint over a May 26 incident in which a Chinese fighter jet released chaff metal in front of an Australian aircraft that was operating in international airspace. Embarrassed that Australia had publicized China’s aggression, Yang Jiechi’s minions screeched that Australia had invited the attack for being a U.S. “goon.”
To give China a literal waiver at this moment would be utterly foolish. It would show Biden incapable of grasping the grand strategic stakes that now define the U.S.-China relationship.
Still, it’s clear what Beijing wants Biden to do. Another Global Times editorial desperately sought to bolster the pro-tariff-waiver crowd on Tuesday. As the propagandists put it, “if the US really wants to alleviate its inflationary pressure and address other economic problems, it needs to figure out how to reduce political interference in its trade policy and how to avoid politicizing economic and trade issues … Washington needs to make the right decision before it is too late.”
The right decision, indeed. Just not the one China is hoping for.
