Acknowledging what many trade and political experts had expected, President-elect Joe Biden told the New York Times in an interview on Wednesday that he won’t remove tariffs imposed by President Trump on China, at least not right away.
Biden said he will instead develop a strategy with U.S. allies on how to best deal with China and conduct a full review of the Phase One trade deal that the Trump administration reached with Beijing. That deal was meant to put an end to the trade war instigated by Trump against Beijing’s unfair trade practices, such as government subsidies and theft of intellectual property.
“I’m not going to make any immediate moves and the same applies to the tariffs. I’m not going to prejudice my options,” Biden told columnist Thomas Friedman (no relation to this reporter). “The best China strategy, I think, is one which gets every one of our, or at least what used to be our, allies on the same page. It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.”
In the Phase One deal, China agreed to purchase $200 billion worth of U.S. goods and services through 2021 and develop an action plan to strengthen intellectual property protection and end forced technology transfers. The deal left in place 25 percent tariffs on $250 billion in Chinese imports, including apparel and footwear.
Kim Glas, president and CEO of the National Council of Textile Organization (NCTO), welcomed Biden’s comments.
“We also appreciate the president-elect’s pledge to continue aggressive trade enforcement actions against China, along with the willingness to work long-term with international coalitions to comprehensively address systemic predatory trade practices,” Glas said. “We believe it is important to continue the Section 301 tariffs on finished apparel and textile imports from China imposed by the U.S. to address intellectual property theft and other predatory trade practices by China. The U.S. textile industry is highly automated and technical; the industry is proud to compete with anyone in the world on a level and fair playing field. But the rules of the road aren’t always fair to U.S. manufacturers and workers and, regrettably, the U.S. textile industry has far often been confronted with that sobering reality.”
She said this is why aggressive enforcement actions, including continuing punitive tariffs on finished products coupled with other enforcement actions, are critical to getting the Chinese to address systemic unfair trade advantages, such as such as government subsidies, state-owned enterprises, forced labor practices, weak environmental standards, intellectual property theft and currency manipulation that non-market economies use to manipulate global markets and hurt U.S. manufacturers.
A white paper from Greenberg Traurig’s Government Law & Policy practice said Biden’s trade agenda may be more focused on multilateral action to resolve trade conflicts, particularly with China.
The New York law firm predicted that a Biden administration “might not prioritize a major rollback of the Section 301 tariffs that President Trump imposed on Chinese products,” and could use them on Chinese products as leverage to negotiate deeper Chinese concessions on key structural economic issues, including Chinese theft of U.S. companies’ intellectual property, its forced technology transfer of U.S. businesses in China and subsidies to state-owned enterprises.
The Footwear Distributors and Retailers of America (FDRA) sent a letter to Biden last month urging action him to remove the tariffs after he takes office in January.
“We were encouraged when Vice President-elect Harris highlighted the impact tariffs have on American consumers during the vice presidential debate,” Matt Priest, president and CEO of FDRA, wrote to Biden. “In fact, for our industry, the highest tariff rates most often fall on lower-value shoes and children’s shoes, raising costs for working class individuals and families on a product they have to buy as a necessity.”
Biden told the Times the key to dealing with China is building “leverage,” but stressed that “we don’t have it yet.” He said he wants to create that leverage against China by building a bipartisan consensus for strengthening American industry through major investments.
“I want to make sure we’re going to fight like hell by investing in America first,” Biden said. “I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers.”