In the past nine months under President Biden’s administration, the trajectory of US trade policy seems less defined and more an extension of previous strategies. The continuation of import tariffs on Chinese goods, the sustained Phase One trade agreement with China, and the deadlock at the WTO’s dispute settlement system due to the United States’ stance on appointing Appellate Body judges all underscore this continuity.
US Trade Representative Katherine Tai’s recent reinforcement of China tariffs and the Phase One deal largely echoes the policies of the previous administration, albeit with a more tempered approach. Notably, the implementation of protectionist Buy American measures restricting government procurement to domestic sources further aligns with the ‘America First’ trade principles inherited from the former administration.
Central to recent trade engagements has been the reliance on tariffs as a tool for negotiations, exemplified by coercing bilateral trade deals with China and Japan. However, instead of fostering broader market access, these agreements, particularly the Phase One deal, predominantly focus on substantial Chinese purchases of American goods without considering the repercussions on other market players, leading to significant disruptions, especially for countries like Australia.
The fallout from these trade dynamics has had a palpable impact on various industries, notably in Australia, where competitive producers have been displaced in the Chinese market due to deliberate bilateral maneuvers between the US and China. While US officials claim support for affected allies, the disconnect between actions and stated commitments remains apparent, leaving questions about the broader ramifications of such bilateral agreements.
Beyond bilateral disputes, broader concerns persist regarding China’s trade practices, including subsidies to state-owned enterprises and forced technology transfers. These issues highlight the gaps in international trade regulations, which lack frameworks to address such non-market practices effectively.
Amidst these challenges, the void in coherent trade policy becomes evident, particularly in the context of the Trans-Pacific Partnership (TPP). The US withdrawal and subsequent salvaging of the agreement as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) underscore the missed opportunity for the US to lead in setting trade standards and countering China’s economic influence.
China’s recent bid to join the CPTPP presents an intriguing turn, offering an avenue for engagement that could prompt reform discussions and potentially pave the way for broader trade realignment. This move also offers an opportunity for the US to reconsider its position within the pact, although navigating such a shift requires a strategic recalibration and likely modifications to existing agreements.
The path forward necessitates a comprehensive approach, including addressing existing trade arrangements, re-engagement with multilateral agreements, and fostering a more constructive dialogue regarding trade reform. This includes removing barriers to the WTO dispute settlement system and redefining trade relationships in a manner that promotes fair and open commerce while addressing concerns about non-market practices.
In sum, the current trade landscape under the Biden administration reflects a continuation of previous policies with incremental adjustments. Addressing the complexities of global trade demands a nuanced and strategic approach that balances national interests with broader multilateral engagement, fostering an environment conducive to fair and equitable trade practices.
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