Trade war: Beijing hits a new surplus. Washington closes ranks with the EU
Trump's tariffs, confirmed by Biden, have so far failed to rebalance the trade deficit between the two powers. Roosevelt Institute expert: without the 2018 duties, we would not have had an agreement like the EU deal on sustainable steel. The two sides of the Atlantic coordinate intervention to counter Chinese unfair practices.
Rome (AsiaNews) – China's economic growth is slowing down, but its exports continue to hold, once again fostering a large surplus with the United States. The "trade war" unleashed by Donald Trump in 2018, later confirmed by his successor to the White House, has failed to rebalance economic trade between the two powers.
However, now in a sizeable shift away from Trump policies, the Biden administration is working on a common front with the European Union to respond to Beijing's "unfair" trade practices.
According to new data released by the Chinese customs agency, China earned 259 billion euros from exports in October: a 27.1% increase from a year ago, but a 28.1% drop compared to September. Year-on-year, imports also grew (+20.6%) to 186 billion euros. Beijing recorded a trade surplus with the US of 35.1 billion euros; the previous month it had been 36.2 billion.
In January 2020, the United States and China signed a preliminary agreement (Phase 1) in an attempt to resolve their trade disputes. Under the deal Beijing committed to increase its purchase of goods and services from the US by about 184 billion euros by the end of 2021, compared to 2017 levels.
That goal has yet to be achieved. US government statistics reveal that in the first eight months of 2021, the country has accumulated a trade deficit of 189 billion euros against China, up from 166.5 billion last year – data that raise criticism from those who opposed Trump's tariffs, particularly big US companies.
Todd Tucker, director of governance studies at the Roosevelt Institute in New York and a former member of Joe Biden's transition team, argues that tariffs are actually a useful tool to balance relations between the US and China. "For instance, we would not today be on the verge of a common US-EU external 25% tariff/tariff rate quota on Chinese steel were it not for the 2018 imposition of steel duties. So they can be useful for sectoral strategies," he told AsiaNews.
On October 31, on the sidelines of the G20 in Rome, the United States and the European Union reached an agreement to create a global agreement on the sustainable and low-carbon production of steel and aluminum. The transatlantic pact aims to counter the overproduction of China's steel and aluminum industries and their impact on global warming.
For Tucker, the U.S.-EU agreement will allow the two sides of the Atlantic to move together from an indirect legal system of protection, like the poorly functioning World Trade Organization, to "a more direct economic strategy."
In their recent meetings, the U.S. and EU trade envoys promised more joint efforts to respond to Chinese market "distortions." The United States and Europe could coordinate to adopt shared instruments against Beijing's "coercive" trade policies (such as those against Australia) and Chinese dumping. There is also room for cooperation in terms of screening and possible blocking of investments from China, as well as banning the sale of certain products to the Asian giant, especially in technology.