Boxed In on China

Biden’s inability to extract concessions from Beijing is a liability going into November’s midterms

Jenny Leonard

Two years ago, then-President Donald Trump signed the U.S.-China Phase One trade agreement, hailing it as an “historic” deal. Joe Biden’s team spent the presidential campaign criticizing it as too limited in scope and lacking teeth. Yet once the Democrat took office, there was a recalibration. In a speech in October, U.S. Trade Representative Katherine Tai described the framework as “useful” and said it’s had “value in stabilizing the relationship.”

But she also pledged the administration would make sure China lived up to its commitments. “We must defend to the hilt our economic interests,” she said. “And that means taking all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition.”

With the midterms looming in November, the White House is under increasing pressure to show it’s willing to punish China for not holding up its end of the bargain. Trade data through November show its imports from the U.S. amounted to less than 60% of the additional $200 billion the agreement targeted over two years.

Some analysts say the administration is boxed in when it comes to possible counter measures. Officials have privately admitted Trump’s tariffs are inflicting more harm on U.S. businesses and households than on Chinese exporters. They’ve also recognized that the duties have lost a lot of their leverage. Data point to China having posted a record trade surplus with the U.S. in 2021, thanks in large part to Americans’ pandemic-stoked appetite for Chinese-made goods.

Raising the tariffs, which cover 60% of China’s exports to the U.S., would be a controversial call at a time when inflation is running higher than it has in decades. Rebalancing the duties to give relief to American businesses would risk accusations from Republicans of being soft on China.