Biden’s Dilemma to or not to Lift Tariffs on Chinese Imports

-Hemant Adlakha

Lift China Tariffs? – WSJ
Image: wsj.com

Increased tariffs didn’t cause high inflation, lifting them is not going to curb it either, experts say

Easy monetary policy, expansionary fiscal policy, rising oil prices, the war in Ukraine, and not the additional tariffs on Chinese imports are among the key factors for the record-high 8% US inflation currently. Facing the midterm elections this fall and with approval ratings as low as 39%, President Biden is under mounting pressure to reduce the additional tariffs from the Trump era. However, with over 82% of Americans holding a negative view of China at present, will or can Biden risk lifting China tariffs and appear looking weak before the US’s enemy number one?

In March 2018, when President Trump announced his administration’s decision to increase tariffs on imports from China, the move was welcomed by most Americans. Those endorsing a “trade war” with China ignored the view that the so-called punitive measures against China would adversely impact US consumers and the economy. This is a midterm election year but President Biden’s approval ratings are as low as a miserable 39%. Biden is now eighteen months into his presidency and still struggling to evolve the administration’s China policy. His dilemma at the present is, should he 1) risk selling “reduce China tariffs” as a panacea to solve a troubled economy to the US voters; 2) “reduce China tariffs” and risk appearing weak before China?

Contrast Nixon’s opening of America to China half a century ago with Biden shutting off China to America today. No one in the early 1970s accused or even considered the Nixon administration “going weak before the communists in Beijing.” Instead, his handshake with Mao was hailed as a geopolitical venture orchestrated by Kissinger. Moreover, no China but the Soviet Union was the US’s main enemy then. However, President Biden today is confronted with a China most Americans fear as the most important threat to US interests.

It is beyond dispute that the imposition of 25% tariffs on Chinese imports worth over $300bn into the US four years ago, also called the US-China “tariff war,” was the beginning of Washington’s long-term China policy of confrontation and containment. It is also beyond doubt that eighteen months into the Biden presidency, notwithstanding the raging Ukraine war in Europe, the United States has become more singularly focused on one country: China. Recall President Biden’s recent Asia visit which took him past China into Japan and South Korea but the US political elite and media alike applauded the five-day Indo-Pacific trip for its one-point agenda, i.e. an aggressive and belligerent China.

Biden chose to kick off his first Asia visit on May 20 by going to Seoul, with the aim of meeting newly elected South Korean President Yoon Suk-yeol in order to shore up the US-South Korea alliance which had been “weakened” under the previous Moon Jae-in era; he then traveled into Japan and launched the 13-country Indo-Pacific Economic Fram work on his first evening spent in Tokyo; on his second day in the Japanese capital his agenda was to reinvigorate Quad – the four-nation quadrilateral security mechanism anti-China clique which is increasingly being referred to as “Asian NATO” not just in Beijing but also in Washington, Tokyo, Canberra, and New Delhi.

Additionally, although it is claimed the IPEF is Biden’s attempt to fill up the so-called vacuum in the Asian economy created after President Trump had pulled out America from the Trans-Pacific Partnership. Yet the truth is this was more of Biden’s assertion that “America is back” in Asia-Pacific geopolitics. On the other hand, the Quad leaders’ summit, the second in-person meeting of the leaders of the four countries in just eight months, was aimed at signaling to Beijing that despite Covid-19, the war in Ukraine, and the record-high inflation in the US, the Biden administration has not lost focus on the fact that China is its main enemy.

On May 24, as Biden wrapped up his maiden journey into Asia and returned to Washington, he created two records to be remembered by posterity. One, Biden became the first sitting US president in this century who did not visit China in the first year of his presidency. Second, Biden now also holds the record of the longest gap since the last visit to Beijing by a US president – Biden’s predecessor Trump last visited China in November 2017. The second of the two records is more significant and has major implications not only for US-China relations but also for world politics.

It is important to know why Biden skipped going to China during his maiden trip to the Asia-Pacific region. To be fair to President Biden and to his China team, it was announced way back in January this year that his itinerary would not include Beijing. But why? For the following reasons.

First, it is indeed true when Biden took office it was a fraught moment for the US-China relationship. Let us just suffice by flagging the two key issues facing the world’s most important bilateral relationships left behind by the previous administration, the Sino- American relations. One, Trump’s economic warfare against China over the past several years had, as was expected, not only bizarrely failed but also harmed the US farmers in particular and consumers in general. Two, the timing of the US withdrawal from the TPP and China’s forging ahead with the largest regional economic and trade grouping – the Regional Comprehensive Economic Partnership, not only saw China’s economic influence in Southeast Asia expand but at the same time the US political and economic presence in the region entered a phase of dangerously huge uncertainty.

Second, in such a scenario, President Biden was faced with two choices before formulating a new China strategy. One was to carry on with the tough stance on both China and Xi Jinping displayed throughout his presidential campaign, during which he even called the Chinese president a “thug.” The other was to explore an out-of-the-box way to seek conciliation with China. The second option deserved serious consideration for a few simple reasons, namely a) China was not at all a weak economy like the Soviet Union before it collapsed in the 1980s; b) China not only had a strong international standing but was well-integrated into the world economy; c) China had a stable leadership. However, the politician in Biden dominated the economist in him. Biden chose to “punish” Beijing by making sure that “China does not succeed in surpassing the US as the world leader.”

Third, as observed by some US political analysts, not including a visit to China as part of Biden’s recently concluded Asia tour itinerary, has as much to do with US domestic audiences as with US foreign policy or the China policy. This also explains why as Biden took office, he promised to reverse several of the Trump administration’s policies but not the China strategy. Obviously, the Biden administration was aware the dislike for China had been rising among Americans – 46% in 2018, 67 % in 2021, and an unprecedentedly high percentage of 82% today. These figures explain the unmistakably close link between popular negative views and the current administration’s approach toward China.

A more crucial factor in addition to the anti-China “wave” currently prevailing in the United States is what Susan B. Glasser, the veteran US political analyst observed in her column in The New Yorker: “There is no doubt that Biden’s had a brutal second spring in office. The sense of metastasizing crisis threatens to overwhelm any other story about his leadership.” Further, citing the Democratic strategist Doug Sosnik’s observation that in the past four midterm elections public had made up its mind about the leadership in

Washington, she added “June is more or less the last chance for a president and his party to somehow change course and avert a looming political debacle in the fall.” The politician in Joe Biden knew very well the American voter had welcomed Trump’s economic warfare against China. The poor economist as he is, President Biden, ignored when told increased tariffs on Chinese imports had no negative impact on the Chinese economy but acted as a boomerang on the US economy. Now, clueless as to what to do with four-decade high inflation, and also without a clue whatsoever about how to reverse his declining approval rate, Biden is under mounting pressure to lift the tariffs in order to woo voters in midterm elections this fall. But the big question is, Biden, whose favorite line before becoming the US President had been “Here is the deal,” and who, as President, has become infamous for saying “What can I do” and “I can’t make that happen,” can he go against the popular will and lift China tariffs and risk looking go weak before Beijing in a midterm election year?

The views expressed here are those of the author(s), and not necessarily of the mentor or the Institute of Chinese Studies.

ADIZ Antipathy in Cross-Strait Relations

Amogh Sharma, Research Intern, ICS

Introduction

On the 1st October 2021, the Ministry of National Defense of Taiwan reported the sighting of 38 PLAAF aircraft in Taiwan’s air defence identification zone. The combined fleet of jet fighters and nuclear-capable bombers flew in the vicinity of Taiwan-controlled Pratas islands in the southeast of Taiwan. These aircraft were met with radio warnings and scrambled Taiwanese jets. The Taiwanese Premier Su Tseng-chang gave a statement immediately after the incident, criticising these military aircraft manoeuvres by China within the Taiwanese air defence zone, which he deemed an act of “bullying.”

The Chinese responded by sending over 150+ sorties into the ADIZ over the next five days, which outnumbered the total number of incursions previously in that year. These events have been followed by daily flybys of Chinese aircraft and have created uncertainty in the region. This uncertainty builds up between the two sparring states, and observers fear broader, more calamitous incursions.

ADIZ and Aerospace

These aircraft incursions occurred in Taiwan’s Air Defence Identification Zone (ADIZ). In the dawn of commercial flights, nations attempted to generate a uniform code for regulating the air via international treaties. In 1944, the Chicago Convention on International Civil Aviation established the International Civil Aviation Organization (ICAO). In its first three articles, the convention defines airspace and each country’s exclusive sovereignty over its airspace. The airspace is a legal entity enshrined in the convention. A country’s airspace extends 22 km from its boundaries (12 nautical miles).

The United States was the first country to define its ADIZ in the 1950s, and Annex 15 of the ICAO defines it as a “Special designated airspace of defined dimensions within which aircraft are required to comply with special identification and/or reporting procedures additional to those related to the provision of air traffic services (ATS).” There is no legal provision for the ADIZ yet. Many countries have, however, maintained it for security purposes. It is customary for aircrafts entering the ADIZ to give identification and seek authorisation from the country controlling the zone. The ADIZ is merely a safety measure, but since it is not an international rule, it is often the site of disputes and conflicts. Especially in the cross-strait region of China and Taiwan.

China’s Ambition in the Region

President Xi Jinping has stressed that “China has never, and will never, invade or bully others or seek hegemony.” This statement is in direct contrast to Chinese actions surrounding Taiwan. Despite repeatedly pledging a ‘peaceful reunification, it is a fact that China still considers Taiwan a ‘renegade province’.  There is no doubt amongst Chinese policymakers that reunification of Taiwan is a target for the PRC; their views vary on when and how this should happen. In his book, ‘Return of The Dragon‘, analyst Denny Roy talks about two schools of thought: the ‘patient’ and the ‘impatient’.  The patient group adheres to Deng Xiaoping’s approach of building cross-strait ties and trust, using both to integrate Taiwan over time slowly. The impatient group does not believe there is time for this slow integration, but a quick resolution, even if  a military occupation is used,  is necessary. These ideas have surged in popularity under the current regime. As Xi asserted during the initial years of his presidency, it is time the two sides reach a ‘final solution‘. Xi Jinping, during a meeting with the Taiwanese delegation at the Asia-Pacific Economic Co-operation forum, Nusa Dua, Bali, Indonesia. (October, 2013) said “The issue of the political divide that exists between the two sides must step by step reach a final resolution and it cannot be passed on from generation to generation.”

It is unclear how favourable this solution shall be to both parties, as legislations like Article 8 of the ‘Anti-Secession Law’ in China, which allow the use of force for reunification, continue to offset democratic Taiwan. Nevertheless, Xi has made reunification a centrepiece of his ‘China Dream’, a return to glory for the Middle Kingdom. In March 2018, while addressing the National People’s Congress, Xi thundered that Taiwanese separatism ‘will be condemned by the Chinese people and punished by history’.  And four days after the highest burst of aircraft activity in Taiwanese ADIZ in recent memory (one day before Taiwan National Day in 2021), Xi remarked that “The historical task of the complete reunification of the motherland must be fulfilled, and will definitely be fulfilled,”

ADIZ Incursions and Reactions

The 180 km-wide Taiwan Strait is divided by a ‘Median Line’, which till the late 90s was the boundary line between the two countries. When Chinese forces grew in strength over their island neighbours, so did their confidence in crossing this line. Now, the 80 km line is far from the 22 km sovereign airspace, but the flagrant violation of previous understandings after increased power gave a glimpse of Chinese views on this issue.

Map and research by Louis Martin-Vézian of CIGeography

In April 2019, two PLAAF J-11s crossed the median line by 43 nautical miles and stayed there for an abnormally long 12 minutes. Usual violations are accidental due to poor weather or pilot error, but this was the most extended violation since the 1950s. Observers suggest that the motive was provocative rather than accidental. Since the Ministry of National Defence (MND) of Taiwan began recording violations of the ADIZ in 2020, these instances have kept increasing; peaking on specific occasions like National Days or the Huan Kuang exercise.

Beyond just political reasons, several legalities hinder Taiwan’s international appeal against China’s provocations. The United States, which has been a significant player in pushing for ADIZs, does not recognise Taiwan’s ADIZ. Moreover, Taiwan has been excluded from the ICAO since the 70s, when China was given its spot.  Effectively this makes them a single country for the ICAO. Hampered by these liabilities, supported by a weakened US in the region and a rising rival to the East, Taiwan can only try to keep up and maintain vigil over its security.

Conclusions

Taiwanese reunification with mainland China is a central aspect of Xi Jinping’s future vision of China. With a declining American influence, the fate of Taiwan looks increasingly precarious. Not just limited to economic and diplomatic pressure, China is using its military strength aggressively. 

China has ambitions in the South China Sea and regards Taiwan as a pivotal link to its growing power range. Taiwan is a symbol of American presence in China’s periphery, and the increasing rivalry between the global giants is a cause of concern for the small island nation. Taiwan is at a critical junction, a confluence point for two powers, and a hotspot for conflicts. It is an uneasy status quo, and renewed strategic recourses are the need of the hour. Temporary measures like observer status in the ICAO for Taiwan (similar to its presence in WHO until recently) and discussions regarding regulations of ADIZ could be some steps in a direction towards greater peace.

The Blog was written under the guidance and supervision of Dr. Mirza Zulfiqur Rahman,Independent Researcher and Consultant (International Relations, Transboundary Rivers and Borders) and Visiting Faculty (Tata Institute of Social Sciences, Guwahati). The views expressed here are those of the author(s), and not necessarily of the mentor or the Institute of Chinese Studies.