Biden considers Western front against China in EU tariff deal

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President BidenJoe Biden Five takeaways from a dark night for Democrats Youngkin wins Virginia Gov. Michelle Wu’s race to be Boston’s first female mayor MORE stepped up efforts to mend U.S.-European trade relations and form a united Western front against China with a recent agreement to ease tariffs on era steel and aluminum Trump.

Under an agreement reached this weekend, the United States will lift tariffs first imposed by the former President TrumpDonald Trump Republicans set to sweep Virginia, blowing Democrats away Five takeaways from a gloomy night for New Jersey Democratic governor’s race Too Close to Call MORE in 2018 on European imports of steel and aluminum under a certain quota.

The EU, in return, will waive planned tariffs of 50% on bourbon, denim jeans and motorcycles that U.S. officials say will lead to layoffs and further shortages before the December holiday break.

The US and the EU have also agreed to start longer-term talks focused on reducing imports of “dirty” steel produced by high-emission methods – a direct fire against China and its zealous overproduction. of steel to reduce US and European prices.

“We will engage directly with China on its industrial policy, but we will also take all necessary measures to protect ourselves from the waves of damage inflicted over the years by unfair competition,” said the US trade representative. Katherine taiKatherine TaiBiden administration excludes Ethiopia from trade agenda for ‘gross violations’ of human rights Future of global trade depends on US leadership As EU moves towards carbon pricing, states United must work with WTO to avoid trade war PLUS said in a speech on Tuesday at the American Iron and Steel Institute and Steel Manufacturers Association summit in Washington, DC

“We must be ready to deploy all tools and explore the development of new ones, including collaborating with other economies and countries.”

The deal did not deviate entirely from Trump’s emphasis on using trade barriers to secure better conditions for economically vulnerable and politically crucial US industries. Trump and Biden have both stressed the importance of reorienting US trade policy around blue-collar workers rather than lower prices and better margins for businesses in general, an idea historically more popular among Democrats.

“It’s still a very worker-centered trade policy. This is not a complete elimination of tariffs. It’s a quota and the focus is on fighting China, ”said Marie Kasperek, director of the Institute for International Economic Law at Georgetown Law School.

But Biden’s intense focus on mending the breaches with Europe is a massive strategy shift in itself, she continued.

“This shows the renewed willingness of the United States to take leadership and set global standards at the multilateral level rather than going it alone, imposing threats and uncertainties as was the case under the previous administration, ”Kasperek said.

While Biden and Trump were more skeptical of free trade than most of their recent predecessors, their trade policy similarities largely end on the shores of the Atlantic.

Trump made no meaningful distinction between friends and adversaries when imposing tariffs on steel and aluminum in 2018. He penalized staunch partners like the EU and Canada alongside China in under a law intended to protect national security.

The former president also equated long-standing US disputes with the EU over agricultural trade with China’s theft of US trade secrets, price manipulation, forced technology transfers and predatory lending to emerging countries.

“Questions about trade with Europe are marginal, while with China they are really fundamental,” said Edward Alden, senior researcher at the Council on Foreign Relations.

“China has a much larger network of import restrictions. China is much more restrictive in terms of investment. China is stuck on most aspects of digital trade, ”he said, adding that the disputes with Europe are“ quite narrow and affect some sectors ”.

Trump has also acted primarily through bilateral negotiations with trading partners, rejecting efforts to coordinate policies at the international level. In contrast, Biden focused on areas of general agreement between the US and the EU, particularly on corporate tax reform and climate issues, while trying to undo the damage caused by Trump.

The steel and aluminum tariff deal came as Biden and administration officials were deployed across Europe to sell a deal on a global minimum corporate tax and for a summit Climate Change Conference in Glasgow, Scotland. The pact also followed an agreement between the United States and the EU to suspend a 2004 dispute over subsidies for aircraft production.

“We’ve seen this a number of times this year, in transatlantic relations, to address some of these issues in the relationship,” said Owen Tedford, research analyst at Beacon Policy Advisors.

The aim, he said, is “to improve cooperation by trying to force China to be a responsible actor on climate and steel overproduction, but also to facilitate cooperation between states. United and the EU on things like technology standards trying to avoid a semiconductor race to the bottom.

Biden administration officials stressed the importance of uniting with Europe to limit China’s economic influence instead of relying on unilateral threats and tariffs with limited scope beyond United States

Kasperek said a successful agreement on climate-related steel standards between the United States and the EU could be transformative in curbing China’s overproduction if it is extended to other powerful countries, while stimulating national producers. She added that the deal could also result in higher domestic steel prices and limited European sanctions on U.S. exports, as Biden continues an infrastructure-building frenzy amid high inflation.

The Biden administration is also bracing for deeper tensions with China and new rounds of potential tariffs, making unity with Europe crucial to prevent Beijing from pressuring individual nations to strike deals. damaging.

“I don’t think this administration thinks the United States can do anything to change China,” Alden said.

Despite this, Alden said that the unity between the United States and Europe on investment and export controls “will make it more difficult for China to divide and conquer,” especially after the collapse of a EU-China investment deal amid Beijing’s takeover of Hong Kong.

“The Chinese initiative with the Europeans has collapsed and the United States and Europe are ending a series of new agreements, so it’s hard to see what the Chinese are doing,” he said.

“The Chinese isolate themselves in various ways by their actions.”

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