Washington Considers Escalating its Trade Conflict with China
In a move that could further escalate the trade conflict between the United States and China, Treasury Secretary Janet Yellen recently traveled to Beijing to address China’s efforts to dominate the global manufacturing of green energy products, particularly electric vehicles (EVs). The Biden administration is determined to thwart Beijing’s ambitions in this sector and has even threatened to impose tariffs on Chinese-made EVs, batteries, and other components.
This marks a significant shift in attitude within the Biden administration, as President Joe Biden initially criticized his predecessor’s punitive tariffs on Chinese products. However, the new administration has come to endorse these tariffs as a way to pressure Beijing into addressing its trade practices, such as patent and copyright infringement and technology sharing restrictions.
The pressure on China has been mounting over the past year, with subsidies for green energy products being called into question by China’s complaint to the World Trade Organization (WTO). Additionally, restrictions on the sale of advanced semiconductors and semiconductor manufacturing equipment, as well as limitations on American investments in Chinese technology, have further strained the relationship between the two nations.
Now, the possibility of additional tariffs on EVs looms large, following the tariffs imposed by the Trump administration in 2018 and 2019. Congress is also considering legislation to ban popular Chinese-owned social media app TikTok or force China to divest itself of ownership in its American operations.
However, it is unlikely that Ms. Yellen’s request for voluntary restraint will gain much traction in Beijing. Chinese leaders, including President Xi Jinping and Premier Li Qiang, have made dominance in EV manufacturing a key pillar of their economic plans. Yielding to Ms. Yellen’s request would undermine their economic strategy and Xi’s authority within the Chinese Communist Party (CCP).
While there is a chance that Washington may hold off on imposing tariffs, given its history of backing away from economic and diplomatic threats, this seems unlikely in the current climate. The Biden administration would find it relatively easy to pass such legislation through Congress, which has shown a strong anti-Chinese sentiment. Additionally, the European Union is considering imposing tariffs on Chinese-made EVs, further highlighting the need for action from the United States to protect its own market.
There is also a political motive for the Biden administration to act now. With presidential candidate Donald Trump already promising to impose tariffs if re-elected, implementing tariffs before the election would dilute the issue of Chinese sales in the campaign.
While it may seem like a wise strategy for Beijing to make promises to Ms. Yellen to forestall the tariffs, this would contradict the CCP’s need to maintain a strong image and Xi’s authority. Ultimately, it is likely that Washington will follow through with its threats and impose tariffs on Chinese-made EVs, further escalating the trade conflict between the two global powers.
Disclaimer: The views expressed in this article are solely the opinions of the author and do not necessarily reflect the views of The Epoch Times.
