Welcome to The Burn Bag Newsletter. This week, we dig into trade and climate policy vis-à-vis China. President Biden signaled that tariffs on Chinese goods would remain in effect and unveiled an ambitious climate plan that’ll undoubtedly irk Beijing.
Trade
Trading Places? Biden’s China Trade Policy is More of the Same
In the Bag: Last week, U.S.-China relations under the new administration took shape in public speeches from China’s top diplomat and President Biden. Notably, Biden signaled that Section 301 tariffs on Chinese goods will remain in place for now.
On Thursday (Feb. 4, 2021), President Biden made the first foreign policy speech of his presidency. In it, he designated China as the U.S.’ “most serious competitor” and promised to: “confront China’s economic abuses; counter its aggressive, coercive action; [and] to push back on China’s attack on human rights, intellectual property, and global governance.” He then pivoted to restoring American international engagement and leadership, stating that the U.S. is “ready to work with Beijing when it’s in America’s interest to do so.” Only one line of his speech mentions international trade; according to Biden, “if the rules of international trade aren’t stacked against us, if our workers and intellectual property are protected,” America is unbeatable.
The two mentions of intellectual property rights (IPR) express support for the continuation of Section 301 tariffs on Chinese goods. Section 301 is the statutory mechanism for the U.S. Trade Representative (USTR) to investigate and implement trade actions against countries that violate trade agreements or engage in unjustifiable, unreasonable, or discriminatory actions. In 2018, USTR found against China’s IPR policies and imposed tariffs of 7.5% to 25% on $370 billion of Chinese imports in four broad tranches. The China IPR 301 investigation was one of six opened by the Trump administration, setting up challenges and opposition from members of Congress, the World Trade Organization (WTO), and now, potentially, the new administration.
It has been speculated that 301 tariffs on Chinese goods will be unwound this year through regulatory loosening (granting exclusion requests or lowering rates on all or part of a product list) or eliminating the action altogether. U.S. manufacturers and beneficiaries or hopeful recipients of exclusion requests grants have strong business interests in movements on enforcement. U.S. industry groups are closely monitoring movements on 301 because the reduction or elimination of tariffs would lead to surges in imports.
For China’s part, two days before Biden’s speech on Feb. 2, 2021, Yang Jiechi, China’s top diplomat, paired a call for stronger U.S. participation in the United Nations with an improved U.S.-China relationship and emphasized that “trade issues should not be politicized.” He claimed that China “never exports its development model or seeks ideological confrontation” and called for the U.S. to stop “meddling in the internal affairs” of China, naming Hong Kong, Tibet, and Xinjiang. Because Yang is China’s top diplomat and the highest-raking Chinese official to have spoken publicly on U.S.-China relations since President Biden’s inauguration, the text of the speech is an expression of China’s current policy towards the Biden administration. In a notable contradiction to the vision presented by Yang, President Biden stated during the final presidential debate that he would engage the international community to make China play “by the international rules.”
Why it’s Burning: Interest groups and voters will be watching closely as the Biden administration’s China policy walks the tightrope between increasing international cooperation and being tough on China.
Climate
Climate Cooperation Could Transcend Icy U.S.-China Relations
In The Bag: Ambitious climate action is urgent and mutually beneficial for the U.S. and China. Numerous bilateral conflicts need not impede such progress.
President Biden inherits a severely deteriorated U.S.-China relationship, the consequence of a drastic reframing of relations in terms of zero-sum competition under the Trump Administration’s hawkish foreign policy. After four years of animus arising from, among other things, trade disputes, reciprocal sanctions on industry, crackdowns on academic espionage, military tensions in the South China Sea, and dueling propaganda efforts to control the narrative on COVID-19, the U.S.-China dynamic has been described as bordering on a new Cold War.
The Biden Administration has vowed to approach China “with patience” and “in lockstep” with international allies, promising to judiciously balance confrontation with compromise. Already, challenges are emerging. This week, Linda Thomas-Greenfield, Biden’s nominee for UN Ambassador, announced the State Department would review its classification of China’s repression of the Uigher Muslim minority in Xinjiang as genocide. China’s top diplomat, Yang Jiechi, countered that the U.S. must not cross China’s “red line” regarding its governance of Xinjiang, Tibet and Hong Kong, leaving aside the additional flashpoint of Taiwan.
Even as such blustery rhetoric persists on areas of sharp difference, both sides have sought to reemphasize the relationship’s importance for global peace and prosperity, highlighting climate change as an issue of pressing concern with ample potential for mutual gain. Indeed, both China and the U.S. are highly vulnerable to climate impacts, with assessments underscoring dire implications for national security ranging from civil conflict over natural resources to displacement and migration, damage to critical infrastructure, loss of economic productivity, and compromised public health outcomes.
Climate change is also a threat to both countries’ global credibility and influence. China accounted for 28% of global greenhouse gas emissions in 2020 and is the greatest emitter by volume; the U.S. accounted for 15% and is the top emitter per capita and largest historical emitter since the Industrial Revolution. Both countries are thus expected to deliver on ambitious mitigation and finance pledges as parties to the Paris Agreement, even as China’s debated status as a “developed” economy has long complicated negotiations over its emissions reduction obligations. Notably, failures by China and the U.S. to assume responsibility through urgent action could result in political, economic, or legal consequences, as under-resourced allies seek recourse for the disproportionate, even existential, loss and damage they must sustain.
Recognizing the stakes, President Biden has unveiled a sweeping climate plan calling for economy-wide carbon neutrality by 2050, and full decarbonization of the electricity supply by 2035. Meanwhile, China’s 14th Five-Year Plan also aims for carbon neutrality, by 2060, and outlines approaches for greening the country’s infamously polluting industrial sector. Achievement of these goals could be substantially advanced through such collaborative opportunities as co-development of clean technology innovations, scale-up of green investment, and linkage of local-level initiatives. Stakeholder engagement and transparent planning could be strengthened through a revival of the Obama Administration’s U.S.-China Climate Change Working Group.
Why It’s Burning: Effective climate action does not hinge on an elusive “grand bargain” resolving the many outstanding conflicts in U.S.-China relations. To avoid making costly, futile concessions—as some have cautioned—Biden must oversee a streamlined and consistent China policy that seeks out win-win positions on climate while protecting other critical U.S. interests. The alternative is, quite literally, burning.
This week on The Burn Bag Podcast
"The World": A Conversation with Dr. Richard Haass, President of the Council on Foreign Relations
Listen here.
In this week’s episode of The Burn Bag Podcast, co-hosts A’ndre Gonawela and Ryan Rosenthal speak with Dr. Richard Haass, a veteran diplomat and president of the Council on Foreign Relations (CFR). A’ndre and Ryan discuss Dr. Haass’ new book The World: A Brief Introduction, American policy towards Mainland China and Taiwan, COVID-19’s strengthening of European institutions, popular protests in Russia, defining challenges of the 21st century and multilateralism.
By now, you’re probably familiar with The Burn Bag Podcast, a weekly national security and foreign policy podcast featuring conversations with leading policy practitioners, thinkers, and leaders. If you aren’t, please visit our website and subscribe at Spotify, Apple Podcasts, Stitcher, Overcast, or Google. New episodes weekly!