On Jan. 20, Treasury Secretary Janet Yellen committed to “use the full array of tools” to counter China’s “abusive, unfair and illegal practices.” But however determined Yellen and the rest of President Biden’s team may be, the toolbox they inherited from the Trump administration is a few drill bits short.
Chinese state capitalism caught U.S. policymakers flat-footed. While far from perfect, the “China model” is dramatically reshaping global industry through the concentrated power of economic tools like subsidies, market protection, forced technology transfer and economic espionage. “CCP Inc.” now has the scale to “unleash waves of overcapacity that undercut U.S. firms, … support China’s military modernization and overseas expansion,” and, in so doing, threaten key U.S. interests.
Policymakers maintain an unparalleled capacity to push back using sanctions, export controls and investment restrictions. Trade, however, presents a unique dilemma.
Thanks to U.S. leverage over global economic networks, policymakers maintain an unparalleled capacity to push back using sanctions, export controls and investment restrictions. Trade, however, presents a unique dilemma. The World Trade Organization is not well equipped to deal with Chinese policies and requires substantial reform to meet the challenge. Meanwhile, U.S. trade instruments are limited, outmoded and even counterproductive when it comes to pursuing national security ends. The Biden administration should rethink its geoeconomic toolkit and work with Congress to provide the executive branch more effective means to respond to predatory Chinese economic policy targeting allies and strategic industries.
Read the full article from Lawfare.
More from CNAS
CommentaryStemming the Flow: The United States Needs a Strategy to Address China’s Strategic Exportation of Digital Authoritarianism
Many of China’s technology companies perfect their products in the domestic market by facilitating the party-state’s oppression and data control, and subsequently seek to expo...
By Joshua Fitt
VideoUnderstanding China’s Military-Civil Fusion strategy
Elsa Kania discusses myths she has seen about China’s Military-Civil Fusion strategy and the actual scope of MCF in China....
By Elsa B. Kania
PodcastTop Trump administration official's advice to India on China, Quad
Lisa Curtis was interviewed for the In Focus Podcast with The Hindu's Diplomatic Affairs Editor Suhasini Haidar. Listen to the full interview from The Hindu....
By Lisa Curtis
CommentaryThe Case Against Foreign Policy Solutionism
Not all problems can actually be solved—and many of today’s foremost foreign policy challenges fall squarely into that category....
By Richard Fontaine