As the Secretary of State outlines the administration’s strategy, a pair of letters underscore a commitment of some in Congress to a tough trade policy.
Just a day ago, U.S. Secretary of State Antony Blinken outlined the Biden administration’s view on engagement with the People’s Republic of China. It was a remarkable speech; not to say that this was its chief takeaway, but America’s top diplomat arguing that China uses industrial overcapacity as a trade bludgeon isn’t something you see everyday!
This clear-eyed assessment, however, belies the split in the upper echelons of the administration on trade policy, specifically regarding the Section 301 tariffs that affect hundreds of billions of dollars of Chinese imports. No less than the Treasury secretary thinks they should be scrapped to shave a percentage point off inflation; so do plenty of widely read and influential pundits.
And it won’t keep America’s lobbies from lobbyin’ to maintain a grim status quo. The lobby that’s been in the news a lot recently (and which we’ve written about) is the trade group representing many enormous Chinese solar manufacturers, which is trying to smother a trade enforcement investigation it doesn’t like. In effect it wants to lock in a supply chain that currently runs through a police state full of Uyghur concentration camps, and it has successfully recruited a lot of congressional Democrats and Republicans by framing it an either/or between following established trade rules and inviting a climate apocalypse. (The Intercept just published a podcast interview with Lori Wallach of the American Economic Liberties Project, in which she explains, point by point, how this is all nonsense. You can find it here.)
Still, there is pushback mounting. President Biden may be feeling the pressure of high inflation as the midterms near and has hinted that he might (at least partially) buy the argument that reducing Chinese import tariffs will alleviate that problem, but plenty of senators are telling him that’s a long-term bad idea.
From a letter featuring voices ranging from Elizabeth Warren to Mitt Romney:
We write to express our continued support for the trade action taken against China pursuant to Section 301 of the Trade Act of 1974. We share long-standing concerns about the ways in which China’s acts, policies, and practices have discriminated against U.S. exports and contributed to the offshoring of U.S. jobs, manufacturing, and innovation, all of which has undermined the competitiveness of our country. As you consider the future of the Section 301 action, we urge you to substantially maintain the tariffs in their current form. Rolling back the tariffs on China would undermine the U.S. position in negotiations, expose many U.S. companies and workers to a sudden flood of imports, and signal to China that waiting out the United States is preferable to changing their non-market behavior or complying with the Phase One Agreement.
Others, meanwhile, are beginning to turn their attention to the influence campaign run by the solar imports industry. It’s a smaller group, but it signifies that opposition exists, and that caving to this effort will be politically costly for the administration.
It is troubling that corporate lobbying against a simple investigation would reach this level of mass hysteria if there was not some concern over what career civil servants at (the U.S. Department of Commerce) may uncover. It is unclear why millions of dollars would be spent on advertising and lobbying to urge political interference in the trade enforcement process.