Joe Biden and Donald Trump battle to prove who can be toughest on China

Joe Biden and Donald Trump are clashing over who can be tougher on trade with China, as the 2024 White House rivals plot higher tariffs on Beijing even at the risk of adding to inflationary pressures in future.

Biden’s announcement on Tuesday that he would apply new tariffs on $18bn of Chinese goods was his most significant action on trade with China as president, and thrust trade to the heart of this year’s presidential contest.

Although the immediate macroeconomic impact of the new Biden levies is expected to be negligible, they could over time force companies reliant on inputs from China to raise prices, leaving consumers stuck in the middle.

The president’s decision was made as the industrial states of Pennsylvania, Michigan and Wisconsin — where blue-collar workers are especially sensitive to trade — emerge again as pivotal battlegrounds in the November election.

Meanwhile, Trump has vowed to hit all Chinese goods with tariffs of 60 per cent or more if he is elected to a second term — a level well above those he set during the trade war with Beijing that began during his presidency in 2018.

It leaves the two presidential rivals competing to see which of them can appear the most aggressive protector of working class American jobs in the face of rising Chinese manufacturing prowess.

“[Biden and Trump] are both trying to strike at China and prop up domestic competitors,” said Myron Brilliant, senior counsellor with Dentons Global Advisors-ASG, a Washington consultancy. “And they are doing that in the context of a politically charged season in which no one wants to look weak on China.”

Biden was critical of Trump’s approach to trade with China before the 2020 election, blasting the sweeping tariffs his predecessor imposed on $300bn worth of imports from the Asian nation, saying they amounted to a penalty on US consumers.

But as tensions with Beijing persisted into his time in office, Biden has declined to eliminate Trump’s tariffs, embracing the protectionist centrepiece of his rival’s trade agenda — even as inflation rose sharply in late 2021 and early 2022.

On Tuesday, Biden again kept those Trump tariffs — and then went further, hitting sectors connected to clean energy, semiconductors and metals, while casting the levies as more targeted and strategic than his predecessor’s.

Biden administration officials said the additional tariffs would shield the big domestic investments in industrial manufacturing made under his watch from Chinese competition and supply-chain disruptions.

“It’s a smart approach,” Biden said. “My predecessor promised to increase American exports and boost manufacturing. But he didn’t [do] either. He failed.”

But before heading into a Manhattan courtroom on Tuesday, Trump made a point of attacking Biden for not going far enough, in a preview of the criticism he will aim at his Democratic rival during the campaign. “China’s eating our lunch right now,” Trump said.

“After three and a half years, all Biden has done is basically increase tariffs on a few products primarily, in a symbolic way,” said Clete Willems, a former Trump White House trade official who is now at Akin Gump, a law firm.

“I look at this as both a missed opportunity to raise tariffs on more meaningful imports, as well as a missed opportunity to lower tariffs on products where [they] are not necessarily achieving overall US economic goals,” Willems added.

While Trump used anger at China trade to his advantage in the 2016 election against Hillary Clinton, he was not able to replicate that success against Biden in 2020, as Democratic economic policies hewed to a more protectionist stance aligned with the unions.

Some Democrats were generally upbeat about Biden’s announcement on Tuesday.

Debbie Dingell, the Michigan congresswoman who attended the Rose Garden speech, said in a statement the tariffs would support Biden’s efforts to ensure US cars would be “made in America by American workers”.

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But others were unhappy. “This is horrible news for American consumers and a major setback for clean energy. Tariffs are a direct, regressive tax on Americans and this tax increase will hit every family,” Colorado’s Democratic governor Jared Polis wrote on X.

Oxford Economics on Tuesday estimated that Biden’s additional tariffs were “essentially a rounding error for inflation and gross domestic product”.

But Michael Strain, director of economic policy studies at the conservative American Enterprise Institute in Washington, said the plan was still at odds with Biden’s insistence that fighting inflation was his top economic priority. “These protectionist policies have not succeeded and will not succeed,” he said.

Lawmakers from both parties who represent America’s more populist consensus on trade urged Biden to go even further.

“While tariffs are needed to level the playing field for American workers, they are not enough to stop a flood of Chinese-government-subsidised products on their own,” said Sherrod Brown, the Ohio Democrat and chair of the Senate banking committee who is running for re-election this year. “The administration must ban Chinese electric vehicles and use every possible tool to stop China’s cheating.”

Marco Rubio, the Florida senator, and a contender to be Trump’s running mate in November, asked Biden to extend the tariff to Chinese internal combustion engine cars as well, calling his move a “half-baked decision that will jeopardise the future of America’s automakers”.

Biden’s top officials were adamant that they had struck the right balance in managing competing economic and clean energy goals alongside testy relations with China — and all in an election year.

“We have made clear this is not about escalation. This is about the consequences of decades of economic policy and the need for the United States to defend our rights,” Katherine Tai, US trade representative, told reporters.

Additional reporting by Alex Rogers in Washington