The longer Trump’s China tariffs are in place, the greater the harm to America
The reasons to end the trade war with China keep piling up. Inflation is the latest case in point: American businesses and consumers, not Chinese exporters, are bearing the cost of Trump-era tariffs in the form of higher prices on made-in-China parts and products.
Yet, more than a year into the Biden administration, tariffs on Chinese goods, first imposed in 2018, are still in place on over $350 billion of imports from China.
It is past time for President Biden to remove the tariffs. The longer he fails to act, the deeper the harm to the United States.
In addition to fanning inflation, tariffs on Chinese goods have provoked retaliatory tariffs that have sharply reduced American exports to China, allowing other nations to move in on markets once dominated by the U.S. To offset the losses to farmers and other exporters, the U.S. government has paid out subsidies, adding to the U.S. budget deficit. At the same time, the tariffs have weakened the private sector in China and led to more state control over China’s supply chains, making the U.S. less secure.
The Biden administration’s unwillingness to remove the tariffs reflects muddled policymaking and political miscalculation.
On the policy level, Biden administration officials have indicated that prolonging the tariffs is a way to force China to comply with the phase one trade deal signed by the Trump administration and China in 2020. China has not lived up to the deal, especially regarding its pledge to buy more goods from the U.S. Indeed, new data show that the deal did not even incentivize China to get back to 2017 import levels. Such noncompliance is unacceptable. But Biden administration officials are mistaken to think they can compel compliance by prolonging tariffs that hurt the U.S. more than China.
The Biden administration also appears to view tariffs as a tool to advance non-trade policy goals, including influencing China on Hong Kong, Taiwan and human rights. But here again, tariffs that hurt the U.S. are not effective leverage.
On the political level, the notion has taken hold that it would be politically disastrous for Biden to end the tariffs at this time, when the public holds increasingly negative views on China.
There is no doubt that the public has soured on China; poll after poll confirms this. But it’s wrong to assume that negative views of China translate into support for a trade war.
In original surveys, I find that respondents who support ending the trade war tend to be those who hold increasingly unfavorable opinions of China and who are increasingly fearful of war, hot or cold, with China.
Political science has an explanation for this seeming contradiction. It’s the theory of “commercial peace,” which holds that countries that trade with each other are less likely to go to war. As fears of conflict with China rise, a growing share of Americans appear to have become instinctive commercial peace theorists, supporting trade to lower the risk of conflict.
My surveys show that respondents who hold unfavorable views of China and fear war with China also tend to express a strong belief in commercial peace, explaining their opposition to tariffs. This is true regardless of respondents’ party affiliation, education and income levels, or ideology.
My survey also shows that respondents who follow the news more closely are likelier than less informed respondents to be both anti-China and supportive of ending the trade war.
In brief, support for removing the tariffs is popular and well-informed. And the Biden administration’s apparent fear of a public backlash if the tariffs are removed is misplaced.
The administration may understandably fear that ending the tariffs will open them to Republican broadsides about being “soft” on China, but such broadsides are inevitable and would not be representative of public opinion.
At the other end of the political spectrum, the administration may fear offending organized labor, an important constituency for Biden. But the tariffs have not brought factories back to the U.S., and price increases on intermediate parts have hurt American manufacturers more than tariff protections have helped.
Tariffs on Chinese goods have harmed the U.S. economy and made the country less secure. The public doesn’t support them. And the Biden administration has other ways to address China’s violations in trade, international relations and human rights. Joining the revamped Trans-Pacific Partnership provides an effective lever for limiting unfair Chinese competition and supporting U.S. exporters. Subsidizing targeted domestic industries – as in the America COMPETES Act – provides an effective channel for securing the supply chain and supporting American jobs. Maintaining or expanding targeted sanctions on Chinese firms and individuals engaged in human rights abuses can expose these abuses, while undercutting political opponents who argue that tariff removal would coddle China.
The sooner the tariffs are removed, the better.
David J. Bulman is the Jill McGovern and Steven Muller Assistant Professor of China Studies and International Affairs at the Johns Hopkins School of Advanced International Studies (SAIS). Links to his research are available at davidjbulman.com.