President-elect Joe Biden’s choices to lead his economic and foreign policy push suggest that there will be no let-up in Washington’s efforts to combat what it sees as China’s trade abuses.
It appears there might be some common ground with outgoing President Donald Trump, who over the past four years has undertaken an aggressive and costly trade war that imposed billions of dollars in punitive tariffs on Chinese goods.
Janet Yellen, Biden’s pick for Treasury secretary, and Antony Blinken, who was chosen to lead the State Department, nonetheless emphasised the areas of difference between the two administrations, particularly when it comes to working with US allies and promoting investment to give American firms and workers a more competitive edge against Beijing.
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Yellen called China “our most important strategic competitor” and she accused Beijing of “undercutting American companies” by offering illegal subsidies, dumping products at below-market prices, stealing intellectual property and erecting barriers to US exports.
“We need to take on China’s abusive, unfair and illegal practices,” she said. “We’re prepared to use the full array of tools.”
She also vowed to be watchful of the national security implications of China’s alleged theft of “trade secrets” and “illegal efforts to acquire critical technology.”
Biden’s transition team said Yellen “demonstrated that she is the bold, experienced leader needed at the helm of the Treasury to begin building our economy back better.”
Blinken told the Senate Foreign Relations Committee: “President Trump was right in taking a tougher approach to China,” but added, “I disagree very much with the way he went about it in a number of areas.”
CHINA CHALLENGE
Unlike Trump, who pulled back from multilateral organisations and attacked the trade policies of US partners and adversaries alike, Yellen stressed that it will be important “to work with our allies” to combat the challenge posed by China.
Democrats have for years complained bitterly about the exodus of jobs and manufacturing to the Asian country. Trump, a Republican, doubled down on those complaints and won the support of many workers.
In his farewell address on Tuesday, the outgoing president defended his record, saying he had brought unprecedented international pressure on Washington’s communist rival.
“We revitalised our alliances and rallied the nations of the world to stand up to China like never before,” Trump said, according to excerpts released by the White House.
But he in fact consistently acted unilaterally, while both retreating from and crippling the World Trade Organisation, which enforces global commerce rules.
‘BUILD BACK BETTER’
Biden, a Democrat, has also pledged to defend American workers and manufacturing, and under his slogan “Build Back Better” is expected to soon propose a stimulus plan that includes massive infrastructure investments.
Yellen said that policy would help fend off Beijing’s economic challenge.
Washington needs to “make investments that allow us to compete with China… by investing in our infrastructure, investing in our people and creating a more competitive economy,” she said.
Trump, like other administrations before him, also accused China of keeping its currency artificially low as a way to make its products cheaper and gain a trade advantage, and Yellen underscored Washington’s opposition to that practice.
UNFAIR ADVANTAGE
The US dollar’s value against other currencies “should be determined by markets”, Yellen said, while also promising “to oppose any and all attempts by foreign countries to artificially manipulate currency values to gain an unfair advantage in trade”.
She also told senators that global digital tax negotiations under the auspices of the Organisation for Economic Cooperation and Development are important for Washington to levy taxes on corporations that have moved their headquarters overseas.
“It would enable us to collect a fair share from corporations, while maintaining the competitiveness of our businesses and diminish the incentives that American companies now have to offshore activities,” Yellen said.
- AFP
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