Biden launches $ 250 billion plan to frustrate China
There are also proposed sanctions against those who engage in cyber attacks against the United States, with particular reference to China, and “transparency requirements” and the threat of withdrawal of funding from colleges that have partnerships of. the Confucius Institute with Chinese colleges and universities.
Aside from the Trump administration’s $ 360 billion in tariffs on Chinese exports to the United States, which the Biden administration does not seem in a rush to review, the bill would represent a pretty dramatic escalation in U.S. efforts to improve its competitiveness against China.
It’s also another very expensive program amid an unprecedented spending spree by the new administration, which unveiled a $ 6 trillion budget proposal last week.
The bill has a core of bipartisan support in the Senate, although new proposals – like another measure that focuses on the trade imbalance with China – continue to be added.
He might face more difficult hurdles in the House, but the legislation reflects bipartisan hostility towards China and a determination to protect and improve America’s position on major 21st century economic battlefields while trying to suppress China’s efforts to challenge it.
It also reflects the experience of the pandemic, which exposed economic vulnerabilities, and not just in America, to global supply chains and excessive global dependence on semiconductor manufacturers in Taiwan and Korea. from the South in particular.
While there has been some backlash by US businesses to some of the proposed measures – particularly one that would clamp down on technology transfers – and some conservatives object to the extent of the bill’s central focus and with the creation of new bureaucracies to manage the programs, the snags of Congress are about the details rather than the direction.
The bill, if passed, would cover up the pre-existing trade war between the United States and China.
While new U.S. Trade Representative Katherine Tai and Chinese Vice Premier Liu He had an initial conversation in which Trump tariffs and the current “truce” were discussed, there is no indication that the Biden administration will lift the tariffs or the truce requirement. agreement that China will increase its purchases of US goods by $ 200 billion in 2020 and 2021.
Even though its imports from the United States have increased, China has only met about 60% of its truce commitments and its trade surplus with the United States has exploded as the US economy rebounds depths induced by last year’s pandemic.
The legislation reflects bipartisan hostility towards China and a determination to protect and improve America’s position on major 21st century economic battlefields while trying to quell China’s efforts to challenge it.
The United States is not the only front where China’s ambitions are being fought.
The European Union continued to freeze a trade pact it tentatively signed with China very late last year (after China sanctioned some EU officials in response to China’s own sanctions. EU against Chinese citizens for human rights violations in Xinjiang and Hong Kong) with a sheet of the Trump administration’s trade war handbook.
He drafts laws that would penalize imports and investments by foreign industries that receive subsidies.
While the measures can apply to any country, the largest exporter to Europe – and the economy where state subsidies are at the heart of its economic plans and international ambitions – is the China.
In addition to sanctions for subsidized imports, there would be restrictions on the ability of companies receiving subsidies to invest in EU companies and, as is the case around the world, efforts to reduce dependency. of EY vis-à-vis international supply chains for strategic products.
These include health products, energy, raw materials and others related to Europe’s response to climate change. It is estimated (by the EU) that China supplies around half of the products where the EU plans to increase its self-sufficiency.
The EU’s abrupt change in attitude towards China – from the adoption of an investment deal in the final days of the Trump administration to its freezing – may be linked to the sanction by China EU officials, but he also owes something to the thaw in EU-US relations under Biden.
Biden has made restoring U.S. relations with its major post-war partners and allies – relations severely damaged during the Trump years – a priority.
The US and the EU have had talks that could see the US lift tariffs on European exports of steel and aluminum imposed by Trump in 2018 for “national security” reasons. which provoked retaliatory tariffs from the EU.
New EU tariffs on US exports were expected but have been suspended pending the outcome of the talks, which are taking place against a backdrop of much warmer relations between the US and Europe.
Thus, the two main Western economic blocs are adopting measures that could have a negative impact on China’s ability to achieve its aspirations, even if the actions of the EU are nowhere near as open or overtly hostile as those of the EU. United States.
China pushed the bear with the transparency and breadth of its ambition to overthrow the US global technological and economic leadership and detailing the central role the state would play in achieving this.
He now sees the response which in the United States is broad and aggressive and now appears to garner some support elsewhere.
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