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
CommentaryThe United States Can’t Afford the Brutal Price of Chinese Solar Panels
Buying Chinese solar panels to reduce emissions is like using gas to put out a fire....
By Henry Wu
CommentaryIsrael’s growing ties to China are testing its relationship with the U.S.
As a sovereign, high-tech, democratic powerhouse, Israel has a fundamental stake in the contest between China and the free world....
By David Feith
CommentaryBipartisan support for taking on China goes only so far
The embrace of great-power competition comes with a critical caveat. Both parties’ enthusiasm for the concept abruptly ends when it requires doing something politically hard....
By Vance Serchuk
CommentaryHow the Afghanistan Withdrawal Costs the U.S. With China
U.S. departure from Kabul could end up undermining, rather than strengthening, America’s strategic hand against China....
By Richard Fontaine & Vance Serchuk