-Hemant Adlakha

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.