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Commentary: Why hasn't US President Joe Biden ended the tariff war with China?
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Commentary: Why hasn't US President Joe Biden
ended the tariff war with China?

 

china-us-trade-war-32282-jpg-1611631566.

 

US President Joe Biden wasted no time reversing many of เกม slotxo the damaging
policies introduced during the Trump presidency, with exception to trade.

 

US Trade Representative Katherine Tai is expected to meet her Chinese counterpart
to review the Phase One trade deal, but expectations for the talks are low.

 

Biden lacks the political will to reverse course on Donald Trump’s trade policies,
with bipartisan support for “being tough” on China and using the tariff war as
leverage to demand structural change in China.

 

Nonetheless, keeping the Trump tariffs is a mistake.

 

First, the tariff war is based on a flawed economic rationale. The Trump
administration imposed tariffs in response to the bilateral trade imbalance,
according to which the United States ran a large and persistent trade deficit.

 

Donald Trump believed that trade deficits are bad for the US economy.
But the bilateral trade balance is meaningless when supply chains are globally
structured and trade is multilaterally constructed.

 

Consider, for instance, the iPhone X: When imported from China, each unit
adds US$409.25 to the balance, even though China accounts for only 10.4
per cent of the value added.

 

Second, the United States runs a trade deficit with over 100 countries.
This is not the product of unfair practices but of the United States’ own
internal deficit, with private and public spending outpacing income.

 

It is also caused by the US dollar’s “exorbitant privilege” – trade deficits
do not depreciate the US dollar to bring about trade adjustment because
insatiable demand for the US dollar boosts its value.



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