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
Executive Summary China and North Korea pose intertwined challenges for U.S. and allied policy. The Korean Peninsula constitutes just one area among many in U.S.-China relatio...
By Jacob Stokes
CommentaryThe Biden administration just stalled China’s advance in the Indo-Pacific
Australia, by intensifying the military competition with China, could tee up a chain of as yet unforeseen events....
By Robert D. Kaplan
CommentaryChina tariff policies flounder without a strategy
The White House ought to be asking a series of questions. What problem are we responding to? What are we trying to achieve? How will 301s and tariffs further that?...
By Van Jackson
CommentaryNeoliberals, Anti-imperialists, and the China Question
If there are arguments to be made in favor of cooperation with China, or to justify not sweating China’s accumulation of power, they’re probably best made on grounds other tha...
By Van Jackson