U.S. Signals No Thaw in Trade Relations With China

The Biden administration could face an even more difficult task in reaching any trade agreement with China than the Trump administration did four years ago. Republican lawmakers are ready to pounce on any perceived weakness on China from Mr. Biden, and diplomatic and economic relations between the two countries have deteriorated.

The U.S. release of Meng Wanzhou, a Huawei executive who had been detained in Canada at the request of the United States, and China’s subsequent release of two Canadians and two Americans have done little to cool tensions.

Mr. Trump’s tariffs have discouraged imports of some Chinese goods, but exports to the United States have grown strongly through the coronavirus pandemic, as Americans purchased workout equipment, furniture, toys and other products during lockdown.

China’s leaders have also doubled down on the kinds of domestic industrial subsidies that the United States has long objected to. They have greatly expanded programs, started more than a decade ago, aimed at eliminating their need to buy computer chips and passenger jets — two of the United States’ main exports to China — among other industrial products.

The Biden administration has been exploring ways to persuade China to limit its broad industrial subsidies, but that will be difficult. China’s leader, Xi Jinping, has called for making sure that other countries remain dependent on China for key goods, so that they will not threaten to halt their own sales to China. The United States has done so over issues like surveillance, forced labor and the crackdown on democracy advocates in Hong Kong.

“The dependence of the international industrial chain on our country has formed a powerful countermeasure and deterrent capability for foreign parties to artificially cut off supply,” Mr. Xi said in a speech last year.

In her speech, Ms. Tai highlighted industries like steel, solar panels and semiconductors, where China has used generous government financing and state-directed purchases to corner global markets and squeeze American competitors.

Article source: https://www.nytimes.com/2021/10/04/business/economy/us-china-trade.html