- Presidential candidates Joe Biden and Donald Trump have signaled varying approaches for how they’ll handle China trade ahead of the election.
- Biden is likely to team up with allies to tackle China’s economic exploits and bolster data security.
- Trump favors hitting China hard on trade, proposing a hefty 60% tariff on all Chinese imports.
The world’s top two economies are back at the negotiation table, with Treasury Secretary Janet Yellen jetting off to China for crucial talks on economic ties.
And with a presidential election approaching in November in the US, who ultimately takes office will go a long way towards shaping the trade relationship between the two candidates.
In a recent report, Ryan Hass — the foreign policy director at the Brookings Institution — shared how their trade strategies will differ.
“Trump would favor broad-based decoupling and would be willing to tolerate high costs in pursuit of such a goal, whereas Biden likely would focus on targeted de-risking in areas of the economy that have national security or human rights nexuses, but not on full-scale decoupling of the world’s two largest economies,” Hass said.
As it pertains specifically to Biden, Hass says he will uphold Trump’s tariffs on China while implementing even stricter export controls, investment screening, and employment protections. But he sees the current president taking a more collaborative approach.
“He will suggest that it is wiser to work with partners in confronting China’s predatory economic practices than it is to do so alone, as Trump did,” Hass said.
Biden’s policies will also include measures on data security and safeguards against Chinese electric vehicles, aiming to shield American workers from China’s attempts to export its way out of the economic downturn, according to the note.
As for Trump, Hass expects him to resume his more direct confrontational approach to trade with China. The former presidnet has already hinted at slapping a hefty 60% tariff on all Chinese imports, which Bloomberg Economics forecasts could cut current $575 billion trade flow between the US and China to nearly zero.
“Privately, Trump’s advisors accept that such an action would increase the prices of imports, but they argue that the cost would be worth it because China’s overall economy would take a larger hit than America’s from the tariffs,” Hass said.
Ultimately, no matter who ends up taking office, Hass believes the US-China economic relationship will only become rockier.
“Regardless of whether Biden or Trump prevails in the 2024 election, America’s economic policy toward China likely will grow tighter, rather than looser,” he concluded.
