Biden Admin Talks Up Trade With China but With Little Substance

There is no reason to look for relief in Sino-American relations now or in November when Joe Biden and Xi Jinping meet.
Biden Admin Talks Up Trade With China but With Little Substance
Commerce Secretary Gina Raimondo (L) chats with Lin Feng, director general of China's Ministry of Commerce (2nd R), and U.S. Ambassador to China Nick Burns (R) upon arrival at the Beijing Capital International Airport in China on Aug. 27, 2023. (Andy Wong/Pool/Getty Images)
Milton Ezrati

Commerce Secretary Gina Raimondo visited China at the end of August to discuss improved trade relations. She's the third cabinet-level official to make the trip in the past few months. Treasury Secretary Janet Yellen preceded her, and Secretary of State Antony Blinken preceded Ms. Yellen. All three visits clearly mean to prepare the ground for a meeting between President Joe Biden and Chinese leader Xi Jinping this November, when both attend Asia-Pacific cooperation meetings in San Francisco.

If the record of Ms. Raimondo, Ms. Yellen, and Mr. Blinken is indicative, little substantive change in Sino–American relations is likely to emerge even after the two leaders meet in three months. Ms. Raimondo, like her predecessors, emphasized positive exchanges between Americans and their Chinese counterparts, but also like them, she did little more than talk. When questioned about Washington’s efforts to limit sales of computer chips and chipmaking equipment as well as American investments in Chinese technology, Ms. Raimondo echoed Ms. Yellen almost word for word, claiming that these restrictions are “narrowly tailored” and would have little effect on trade. Ms. Raimondo’s Chinese counterparts showed as much skepticism about her reassurances as they did about Ms. Yellen’s during her visit. American business in China, not surprisingly, put a good face on the visit but seemed more to have hopes of improvement than expectations of it.

The commerce secretary did secure a bit of substance, more than either Mr. Blinken or Ms. Yellen did—they returned home with no change at all. Ms. Raimondo at least established a joint working group to address trade and investment issues and to serve as a forum for exchanging information. In her words, the group would improve “transparency” so as “to avoid misunderstandings, to avoid unnecessary escalation, to avoid miscalculation.”

Otherwise, there was nothing to ease increasingly tense Sino–American relations. On the issues of greatest contention—American bans on technology exports and investments and Chinese bans on vital raw materials—neither side showed any interest in compromise. According to Ms. Raimondo, these matters simply are “not up for debate, not up for compromise, not even really for discussion.” Washington clearly left her with little room to maneuver, which she more or less admitted to the media when she told them that she had “no expectation” that on her first visit, she “would suddenly resolve specific issues.”

There's no reason to look for relief in Sino–American relations, now or in November, when President Biden and Mr. Xi meet. The U.S. president remains committed to the provisions of the CHIPS and Science Act and his recent executive order to limit American investments in Chinese technology. Beijing knows that American claims of national security to justify these measures are far from “narrowly tailored” and effectively aim to stymie advances in Chinese technology. This is why Beijing has retaliated with its own export restrictions as well as national security laws that hamper American business in China and have included raids on several firms, most notably Mintz and Bain & Co.

Recently, China has made what could be described as a technological breakthrough. Because it involves advanced chipmaking capabilities, it could allow Chinese technology to blunt the effects of America’s export bans. In another world, such a development might dissuade Washington from its efforts to stop China’s technological advance, but more likely, given the rhetoric common in Washington these days, it'll simply step up American efforts. And given how things have gone for the past few years, such efforts from this side of the Pacific will prompt Beijing to retaliate in whatever way it can short of outright conflict.

The politicians on both sides can talk amity, and the American Chamber of Commerce in China can hope that the politicians mean it. Still, the kind of competition that has characterized the past few years seems destined to continue and likely will become even more intense.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Milton Ezrati is a contributing editor at The National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, a New York-based communications firm. Before joining Vested, he served as chief market strategist and economist for Lord, Abbett & Co. He also writes frequently for City Journal and blogs regularly for Forbes. His latest book is "Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live."