How Biden Adopted Trump’s Trade War With China (2024)

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sabrina tavernise

From “The New York Times,” I’m Sabrina Tavernise, and this is “The Daily.”

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Donald Trump upended decades of American policy when he started a trade war with China. Many thought that President Biden would reverse those policies. Instead, he’s stepping them up. Today, my colleague, Jim Tankersley, explains.

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It’s Monday, May 13.

Jim, it’s very nice to have you in the studio.

jim tankersley

It’s so great to be here, Sabrina. Thank you so much.

sabrina tavernise

So we are going to talk today about something I find very interesting and I know you’ve been following. We’re in the middle of a presidential campaign. You are an economics reporter looking at these two candidates, and you’ve been trying to understand how Trump and Biden are thinking about our number one economic rival, and that is China.

As we know, Trump has been very loud and very clear about his views on China. What about Biden?

jim tankersley

Well, no one is going to accuse President Biden of being as loud as former President Trump. But I think he’s actually been fairly clear in a way that might surprise a lot of people about how he sees economic competition with China.

joe biden

We’re going after China in the wrong way. China is stealing intellectual property. China is conditioning —

jim tankersley

And Biden has, kind of surprisingly, sounded a lot, in his own Joe Biden way, like Trump.

joe biden

They’re not competing. They’re cheating. They’re cheating. And we’ve seen the damage here in America.

jim tankersley

He has been very clear that he thinks China is cheating in trade.

joe biden

The bottom line is I want fair competition with China, not conflict. And we’re in a stronger position to win the economic competition of the 21st century against China or anyone else because we’re investing in America and American workers again. Finally.

jim tankersley

And maybe the most surprising thing from a policy perspective is just how much Biden has built on top of the anti-China moves that Trump made and really is the verge of his own sort of trade war with China.

sabrina tavernise

Interesting. So remind us, Jim, what did Trump do when he actually came into office? We, of course, remember Trump really talking about China and banging that drum hard during the campaign, but remind us what he actually did when he came into office.

jim tankersley

Yeah, it’s really instructive to start with the campaign, because Trump is talking about China in some very specific ways.

donald trump

We have a $500 billion deficit, trade deficit, with China. We’re going to turn it around. And we have the cards. Don’t forget —

jim tankersley

They’re ripping us off. They’re stealing our jobs.

donald trump

They’re using our country as a piggy bank to rebuild China, and many other countries are doing the same thing. So we’re losing our good jobs, so many.

jim tankersley

The economic context here is the United States has lost a couple of million jobs in what was called the China shock of the early 2000s. And Trump is tapping into that.

donald trump

But when the Chinese come in, and they want to make great trade deals — and they make the best trade deals, and not anymore. When I’m there, we turn it around, folks. We turn it around. We have —

jim tankersley

And what he’s promising as president is that he’s going to bring those jobs back.

donald trump

I’ll be the greatest jobs president that God ever created. I’ll take them back from China, from Japan.

jim tankersley

And not just any jobs, good-paying manufacturing jobs, all of it — clothes, shoes, steel, all of these jobs that have been lost that American workers, particularly in the industrial Midwest, used to do. Trump’s going to bring them back with policy meant to rebalance the trade relationship with China to get a better deal with China.

sabrina tavernise

So he’s saying China is eating our lunch and has been for decades. That’s the reason why factory workers in rural North Carolina don’t have work. It’s those guys. And I’m going to change that.

jim tankersley

Right. And he likes to say it’s because our leaders didn’t cut the right deal with them, so I’m going to make a better deal. And to get a better deal, you need leverage. So a year into his presidency, he starts taking steps to amass leverage with China.

sabrina tavernise

And so what does that look like?

reporter

Just an hour ago, surrounded by a hand-picked group of steelworkers, President Trump revealed he was not bluffing.

jim tankersley

It starts with tariffs. Tariffs are taxes that the government imposes on imports.

reporter

Two key global imports into America now face a major new barrier.

donald trump

Today, I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum.

jim tankersley

And in this case, it’s imports from a lot of different countries, but particularly China.

john king

Let’s take it straight to the White House. The president of the United States announcing new trade tariffs against China. Let’s listen in.

donald trump

This has been long in the making. You’ve heard —

jim tankersley

So Trump starts, in 2018, this series of tariffs that he’s imposing on all sorts of things — washing machines, solar panels, steel, aluminum. I went to Delaware to a lighting store at that time, I remember, where basically everything they sold came from China and was subject to the Trump tariffs, because that’s where lighting was made now.

sabrina tavernise

Interesting.

jim tankersley

Hundreds of billions of dollars of Chinese goods now start falling under these Trump tariffs. The Chinese, of course, don’t take this lying down.

reporter

China says it is not afraid of a trade war with the US, and it’s fighting back against President Trump with its own tariffs on US goods.

jim tankersley

They do their own retaliatory tariffs. Now American exports to China cost more for Chinese consumers. And boom, all of a sudden, we are in the midst of a full-blown trade war between the United States and Beijing.

sabrina tavernise

Right. And that trade war was kind of a shock because for decades, politicians had avoided that kind of policy. It was the consensus of the political class in the United States that there should not be tariffs like that. It should be free trade. And Trump just came in and blew up the consensus.

jim tankersley

Yeah. And Sabrina, I may have mentioned this once or 700 times before on this program, but I talk to a lot of economists in my job.

sabrina tavernise

Really?

jim tankersley

Yeah, it’s weird. I talk to a lot of economists. And in 2018 when this started, there were very, very, very few economists of any political persuasion who thought that imposing all these tariffs were a good idea. Republican economists in particular, this is antithetical to how they think about the world, which is low taxes, free trade. And even Democratic economists who thought they had some problems with the way free trade had been conducted did not think that Trump’s “I’m going to get a better deal” approach was going to work. And so there was a lot of criticism at the time, and a lot of politicians really didn’t like it, a lot of Democrats, many Republicans. And it all added up to just a real, whoa, I don’t think this is going to work.

sabrina tavernise

So that begs the question, did it?

jim tankersley

Well, it depends on what you mean by work. Economically, it does not appear to have achieved what Trump wanted. There’s no evidence yet in the best economic research that’s been done on this that enormous amounts of manufacturing jobs came back to the United States because of Trump’s tariffs. There was research, for example, on the tariffs on washing machines. They appear to have helped a couple thousand jobs, manufacturing jobs be created in the United States, but they also raised the price of washing machines for everybody who bought them by enough that each additional job that was created by those tariffs effectively cost consumers, like, $800,000 per job.

sabrina tavernise

Interesting.

jim tankersley

There’s like lots of evidence that the sectors Trump was targeting to try to help here, he didn’t. There just wasn’t a lot of employment rebound to the United States. But politically, it really worked. The tariffs were very popular. They had this effect of showing voters in those hollowed-out manufacturing areas that Trump was on their team and that he was fighting for them. Even if they didn’t see the jobs coming back, they felt like he was standing up for them.

So the research suggests this was a savvy political move by Trump. And in the process, it sort of changes the political economic landscape in both parties in the United States.

sabrina tavernise

Right. So Trump made these policies that seemed, for many, many years in the American political system, fringe, isolationist, economically bad, suddenly quite palatable and even desirable to mainstream policymakers.

jim tankersley

Yeah. Suddenly getting tough on China is something everyone wants to do across both parties. And so from a political messaging standpoint, being tough on China is now where the mainstream is. But at the same time, there is still big disagreement over whether Trump is getting tough on China in the right way, whether he’s actually being effective at changing the trade relationship with China.

Remember that Trump was imposing these tariffs as a way to get leverage for a better deal with China. Well, he gets a deal of sorts, actually, with the Chinese government, which includes some things about tariffs, and also China agreeing to buy some products from the United States. Trump spins it as this huge win, but nobody else really, including Republicans, acts like Trump has solved the problem that Trump himself has identified. This deal is not enough to make everybody go, well, everything’s great with China now. We can move on to the next thing.

China remains this huge issue. And the question of what is the most effective way to deal with them is still an animating force in politics.

sabrina tavernise

Got it. So politically, huge win, but policy-wise and economically, and fundamentally, the problem of China still very much unresolved.

jim tankersley

Absolutely.

sabrina tavernise

So then Biden comes in. What does Biden do? Does he keep the tariffs on?

jim tankersley

Biden comes to office, and there remains this real pressure from economists to roll back what they consider to be the ineffective parts of Trump’s trade policy. That includes many of the tariffs. And it’s especially true at a time when almost immediately after Biden takes office, inflation spikes. And so Americans are paying a lot of money for products, and there’s this pressure on Biden, including from inside his administration, to roll back some of the China tariffs to give Americans some relief on prices.

And Biden considers this, but he doesn’t do it. He doesn’t reverse Trump’s tariff policy. In the end, he’s actually building on it.

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sabrina tavernise

We’ll be right back.

So Jim, you said that Biden is actually building on Trump’s anti-China policy. What exactly does that look like?

jim tankersley

So Biden builds on the Trump China policy in three key ways, but he does it with a really specific goal that I just want you to keep in mind as we talk about all of this, which is that Biden isn’t just trying to beat China on everything. He’s not trying to cut a better deal. Biden is trying to beat China in a specific race to own the clean-energy future.

sabrina tavernise

Clean energy.

jim tankersley

Yeah. So keep that in mind, clean energy. And the animating force behind all of the things Biden does with China is that Biden wants to beat China on what he thinks are the jobs of the future, and that’s green technology.

sabrina tavernise

Got it. OK. So what does he do first?

jim tankersley

OK. Thing number one — let’s talk about the tariffs. He does not roll them back. And actually, he builds on them. For years, for the most part, he just lets the tariffs be. His administration reviews them. And it’s only now, this week, when his administration is going to actually act on the tariffs. And what they’re going to do is raise some of them. They’re going to raise them on strategic green tech things, like electric vehicles, in order to make them more expensive.

And I think it’s important to know the backdrop here, which is since Biden has taken office, China has started flooding global markets with really low-cost green technologies. Solar panels, electric vehicles are the two really big ones. And Biden’s aides are terrified that those imports are going to wash over the United States and basically wipe out American automakers, solar panel manufacturers, that essentially, if Americans can just buy super-cheap stuff from China, they’re not going to buy it from American factories. Those factories are going to go out of business.

sabrina tavernise

So Biden’s goal of manufacturing jobs in clean energy, China is really threatening that by dumping all these products on the American market.

jim tankersley

Exactly. And so what he wants to do is protect those factories with tariffs. And that means increasing the tariffs that Trump put on electric vehicles in hopes that American consumers will find them too expensive to buy.

sabrina tavernise

But doesn’t that go against Biden’s goal of clean energy and things better for the environment? Lots of mass-market electric vehicles into the United States would seem to advance that goal. And here, he’s saying, no, you can’t come in.

jim tankersley

Right, because Biden isn’t just trying to reduce emissions at all costs. He wants to reduce emissions while boosting American manufacturing jobs. He doesn’t want China to get a monopoly in these areas. And he’s also, in particular, worried about the politics of lost American manufacturing jobs. So Biden does not want to just let you buy cheaper Chinese technologies, even if that means reducing emissions.

He wants to boost American manufacturing of those things to compete with China, which brings us to our second thing that Biden has done to build on Trump’s China policy, which is that Biden has started to act like the Chinese government in particular areas by showering American manufacturers with subsidies.

sabrina tavernise

I see. So dumping government money into American businesses.

jim tankersley

Yes, tax incentives, direct grants. This is a way that China has, in the past decades, built its manufacturing dominance, is with state support for factories. Biden is trying to do that in particular targeted industries, including electric vehicles, solar power, wind power, semiconductors. Biden has passed a bunch of legislation that showers those sectors with incentives and government support in hopes of growing up much faster American industry.

sabrina tavernise

Got it. So basically, Biden is trying to beat China at its own game.

jim tankersley

Yeah, he’s essentially using tariffs to build a fortress around American industry so that he can train the troops to fight the clean energy battle with China.

sabrina tavernise

And the troops being American companies.

jim tankersley

Yes. It’s like, we’re going to give them protection — protectionist policy — in order to get up to size, get up to strength as an army in this battle for clean energy dominance against the Chinese.

sabrina tavernise

Got it. So he’s trying to build up the fortress. What’s the third thing Biden does? You mentioned three things.

jim tankersley

Biden does not want the United States going it alone against China. He’s trying to build an international coalition, wealthy countries and some other emerging countries that are going to take on China and try to stop the Chinese from using their trade playbook to take over all these new emerging industrial markets.

sabrina tavernise

But, Jim, why? What does the US get from bringing our allies into this trade war? Why does the US want that?

jim tankersley

Some of this really is about stopping China from gaining access to new markets. It’s like, if you put the low-cost Chinese exports on a boat, and it’s going around the world, looking for a dock to stop and offload the stuff and sell it, Biden wants barriers up at every possible port. And he wants factories in those places that are competing with the Chinese.

And a crucial fact to know here is that the United States and Europe, they are behind China when it comes to clean-energy technology. The Chinese government has invested a lot more than America and Europe in building up its industrial capacity for clean energy. So America and its allies want to deny China dominance of those markets and to build up their own access to them.

sabrina tavernise

And they’re behind, so they’ve got to get going. It’s like they’re in a race, and they’re trailing.

jim tankersley

Yeah, it’s an economic race to own these industries, and it’s that global emissions race. They also want to be bringing down fossil-fuel emissions faster than they currently are, and this is their plan.

sabrina tavernise

So I guess, Jim, the question in my mind is, Trump effectively broke the seal, right? He started all of these tariffs. He started this trade war with China. But he did it in this kind of jackhammer, non-targeted way, and it didn’t really work economically. Now Biden is taking it a step further. But the question is, is his effort here going to work?

jim tankersley

The answer to whether it’s going to work really depends on what your goals are. And Biden and Trump have very different goals. If Trump wins the White House back, he has made very clear that his goal is to try to rip the United States trade relationship with China even more than he already has. He just wants less trade with China and more stuff of all types made in the United States that used to be made in China. That’s a very difficult goal, but it’s not Biden’s goal.

Biden’s goal is that he wants America to make more stuff in these targeted industries. And there is real skepticism from free-market economists that his industrial policies will work on that, but there’s a lot of enthusiasm for it from a new strain of Democratic economists, in particular, who believe that the only chance Biden has to make that work is by pulling all of these levers, by doing the big subsidies and by putting up the tariffs, that you have to have both the troops training and the wall around them. And if it’s going to work, he has to build on the Trump policies. And so I guess you’re asking, will it work? It may be dependent upon just how far he’s willing to go on the subsidies and the barriers.

sabrina tavernise

There’s a chance of it.

jim tankersley

Yeah.

sabrina tavernise

So, Jim, at the highest level, whatever the economic outcome here, it strikes me that these moves by Biden are pretty remarkably different from the policies of the Democratic Party over the decades, really going in the opposite direction. I’m thinking of Bill Clinton and NAFTA in the 1990s. Free trade was the real central mantra of the Democratic Party, really of both parties.

jim tankersley

Yeah, and Biden is a real break from Clinton. And Clinton was the one who actually signed the law that really opened up trade with China, and Biden’s a break from that. He’s a break from even President Obama when he was vice president. Biden is doing something different. He’s breaking from that Democratic tradition, and he’s building on what Trump did, but with some throwback elements to it from the Roosevelt administration and the Eisenhower administration. This is this grand American tradition of industrial policy that gave us the space race and the interstate highway system. It’s the idea of using the power of the federal government to build up specific industrial capacities. It was in vogue for a time. It fell out of fashion and was replaced by this idea that the government should get out of the way, and you let the free market drive innovation. And now that industrial policy idea is back in vogue, and Biden is doing it.

sabrina tavernise

So it isn’t just a shift or an evolution. It’s actually a return to big government spending of the ‘30s and the ‘40s and the ‘50s of American industrialism of that era. So what goes around comes around.

jim tankersley

Yeah, and it’s a return to that older economic theory with new elements. And it’s in part because of the almost jealousy that American policymakers have of China and the success that it’s had building up its own industrial base. But it also has this political element to it. It’s, in part, animated by the success that Trump had making China an issue with working-class American voters.

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You didn’t have to lose your job to China to feel like China was a stand-in for the forces that have taken away good-paying middle-class jobs from American workers who expected those jobs to be there. And so Trump tapped into that. And Biden is trying to tap into that. And the political incentives are pushing every future American president to do more of that. So I think we are going to see even more of this going forward, and that’s why we’re in such an interesting moment right now.

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sabrina tavernise

So we’re going to see more fortresses.

jim tankersley

More fortresses, more troops, more money.

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sabrina tavernise

Jim, thank you.

jim tankersley

You’re welcome.

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sabrina tavernise

We’ll be right back.

Here’s what else you should know today. Intense fighting between Hamas fighters and Israeli troops raged in parts of Northern Gaza over the weekend, an area where Israel had declared Hamas defeated earlier in the war, only to see the group reconstitute in the power vacuum that was left behind. The persistent lawlessness raised concerns about the future of Gaza among American officials. Secretary of State Antony Blinken said on “Face the Nation” on Sunday that the return of Hamas to the North left him concerned that Israeli victories there would be, quote, “not sustainable,” and said that Israel had not presented the United States with any plan for when the war ends.

And the United Nations aid agency in Gaza said early on Sunday that about 300,000 people had fled from Rafah over the past week, the city in the enclave’s southernmost tip where more than a million displaced Gazans had sought shelter from Israeli bombardments elsewhere. The UN made the announcement hours after the Israeli government issued new evacuation orders in Rafah, deepening fears that the Israeli military was preparing to invade the city despite international warnings.

Today’s episode was produced by Nina Feldman, Carlos Prieto, Sidney Harper, and Luke Vander Ploeg. It was edited by M.J. Davis Lin, Brendan Klinkenberg, and Lisa Chow. Contains original music by Diane Wong, Marion Lozano, and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

[MUSIC PLAYING]

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

How Biden Adopted Trump’s Trade War With China (2024)

FAQs

What is the main reason for the US China trade war? ›

The authors identify four main reasons that led to the greatest trade conflict between the two economies in history associated with intentions of the US: a) to reduce the deficit of bilateral trade and increase the number of jobs; b) to limit access of Chinese companies to American technologies and prevent digital ...

Did Biden end trade war with China? ›

By the end of the Trump presidency, the trade war was widely characterized as a failure for the United States. His successor, Joe Biden, however, has kept the tariffs in place. In early 2024, the Trump presidential campaign was mulling a 60 percent tariff on Chinese goods.

What are the tariffs on China? ›

New and Increased Tariffs on Chinese-Origin Goods

These duties, which range from 7.5% to 25% and apply to roughly $550 billion in Chinese imports, were levied to induce China to change these practices. USTR initiated its four-year review of the Section 301 tariffs in May 2022.

What does the US import from China? ›

In 2021, U.S. imports of $50.3 billion of Textile Products from China constituted 32.6% of the total U.S. imports of Textile products. Additionally, in 2021, China remained the major source of U.S. imports of Furniture, Bedding, Lamps, Toys, Games, Sports Equipment, Paint, and other Miscellaneous Manufactured Items.

Why did Trump impose tariffs on China? ›

During the presidency of Donald Trump, a series of tariffs were imposed on China as part of his "America First" economic policy to reduce the United States trade deficit by shifting American trade policy from multilateral free trade agreements to bilateral trade deals.

Who actually won the US China trade war? ›

The US–China Trade War: Vietnam Emerges as the Greatest Winner.

Which president increased trade with China? ›

President Bill Clinton in 2000 pushed Congress to approve the U.S.-China trade agreement and China's accession to the WTO, saying that more trade with China would advance America's economic interests: "Economically, this agreement is the equivalent of a one-way street.

Is the US still trading with China? ›

U.S. goods and services trade with China totaled an estimated $758.4 billion in 2022. Exports were $195.5 billion; imports were $562.9 billion.

What is the current relationship between China and the United States? ›

They have significant economic ties and are significantly intertwined, yet they also have a global hegemonic great power rivalry. As of 2023, China and the United States are the world's second-largest and largest economies by nominal GDP, as well as the largest and second-largest economies by GDP (PPP) respectively.

How would high tariffs hurt America? ›

Critics say tariffs simply raise prices for American consumers and pose a particular burden for lower-income people who spend more of their money on goods. Tariffs also increase costs for American factories that depend on foreign inputs, which can make U.S. products more expensive and less competitive internationally.

Who benefits from tariffs? ›

Who Benefits From a Tariff? The importing countries usually benefit from a tariff, as they are the ones imposing the tariff and collecting the revenue. Domestic businesses also benefit from tariffs because it makes their goods cheaper than imported goods, hence driving up the demand for their products.

Do tariffs cause inflation? ›

Do Tariffs Cause Inflation? Theoretically, tariffs can cause inflation. Tariffs increase the price of goods and services in domestic markets by applying a tax on imported goods that is paid by the domestic importer.

Is toilet paper imported from China? ›

Trade Balance

In 2022, United States imported $3.1B in Toilet Paper, mainly from Canada ($1.37B), China ($806M), Mexico ($508M), Germany ($42.2M), and Israel ($41M).

How much money does the US owe China? ›

How did USA owe China so much money? The U.S. debt to China is approximately $1.059 trillion. That's 27.8 percent of the $3.8 trillion in treasury bills, notes, and bonds held by foreign countries. The rest of the $19.9 trillion national debt is owned by either the American people or by the U.S. government itself.

What percent of US electronics come from China? ›

Sectors
CountryValueShare
China167,48034.5%
Mexico84,38017.4%
Malaysia29,8906.2%
Taiwan26,5765.5%
6 more rows

What is the conflict between the US and China? ›

Issue Summary. In recent years, tensions between the United States and China have introduced new challenges—especially related to economic and defense issues. China is a major trading partner for the United States but it is also developing its military capabilities, which poses challenges to the U.S. military.

What were the reasons behind the trade war? ›

Trade wars can commence if one country perceives that a competitor nation has unfair trading practices. Domestic trade unions or industry lobbyists can pressure politicians to make imported goods less attractive to consumers, pushing international policy toward a trade war.

What is the trade between the US and China? ›

China Trade & Investment Summary

Exports were $195.5 billion; imports were $562.9 billion. The U.S. goods and services trade deficit with China was $367.4 billion in 2022. U.S. goods exports to China in 2022 were $154.0 billion, up 1.7 percent ($2.6 billion) from 2021 and up 39 percent from 2012.

How did the US China trade war affect US? ›

The trade war caused economic pain on both sides and led to diversion of trade flows away from both China and the United States. As described by Heather Long at the Washington Post, “U.S. economic growth slowed, business investment froze, and companies didn't hire as many people.

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