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Thursday, August 11, 2022

IS BIDEN ABOUT TO CALL A TRADE TRUCE WITH CHINA? #388

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Mr Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

GOOD MORNING FROM LONDON

Mao Tsetung wrote at the height of the Cold War that Superpower rivalry is characterised by Conflict and Cooperation. War can happen but Peace can happen as well. An article in an HSBC publication on China queries whether President Biden is about to drop tariffs imposed on $350bn of Chinese imports by the Trump administration. This is not a geopolitical rethink by Biden but a reaction to the rapidly rising prices of consumer goods in the US.

Biden blames the Covid pandemic and the War in Ukraine but the harsh reality is that in the US price rises were 8.3% in April this year.

Interestingly Biden held back on changing the hardline China tariff policy just weeks ago because he argued China had failed to meet its commitments to buy larger quantities of US goods + agricultural products. But with the US dollar rising against China’s RMB Biden’s hand has been forced.

This issue coincides with the soon-to-be-announced Blinken strategy on China. The US Secretary of State has described the US-China relationship as “arguably the most important…that we have in the world.” In February 2022 the US State Department stated that the US isn’t seeking to “change the PRC but to shape the strategic environment in which it operates”.

This is the big dilemma for the US – What to do about China? The US is only now waking up to the realisation that the Cold War policy that brought about the failure of the USSR does not work with China. Trump tried a hardline approach with Beijing but it did not meet any success. China has increased its trade and political relations around the globe. The USSR crumbled internally but no signs of that happening in China.

The US is in uncharted waters. They have not encountered a rival that they could not best. China is a First for the US.

NEXT POST – #389 – 16 MAY 2022

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