Business Roundtable Chief Urges Biden to Ease Trump’s Tariffs on China

Date: Wednesday, November 18, 2020
Source: The Wall Street Journal

The head of the Business Roundtable, a trade group of the nation’s largest companies, called on the incoming Biden administration to start rolling back tariffs as part of a new round of trade negotiations between the U.S. and China.

“Unwinding the tariffs, especially with China, shouldn’t be a unilateral act,” said Josh Bolten, the BRT’s chief executive. “It should be an opening to begin a serious negotiation that the Trump administration attempted but in many respects made difficult through overly aggressive measures.”

Speaking at a news conference, Mr. Bolten urged China to also start withdrawing its tariffs on U.S. goods as well.

The Biden transition team declined to comment. The Chinese Embassy in Washington didn’t immediately respond to a request for comment.

A two-year trade war between the U.S. and China resulted in U.S. tariffs on about $370 billion of Chinese imports to the U.S., and Chinese tariffs on about $110 billion of U.S. goods shipped to China. Whether to continue those tariffs or phase them out is one of the most significant international economic decisions facing the Biden administration in its early days.

So far, Biden advisers have said that the new administration would consult first with allies before making a decision and examine which tariffs hurt U.S. consumers more than Chinese suppliers.

Lifting the tariffs would be tough politically and would face criticism from President Trump after he leaves office as being weak on China. Lawmakers from both parties also back a hard-line position on China, as do industrial labor unions that are an important part of Mr. Biden’s constituency.

“Congress will back tariffs on China as long as a Biden administration wants them,” said a Democratic Senate staffer.

Business groups have long urged tighter ties between the two countries and persuaded a succession of administrations to negotiate for greater access to the vast Chinese market. But many businesses have become disenchanted with Chinese policies that they say unfairly subsidize Chinese competitors, erect barriers to foreign businesses and pressure foreigners to hand over technology.

The Trump administration battered China with tariffs while it negotiated a phase-one trade deal where Beijing promised to vastly increase purchases of U.S. goods and to tighten protection of intellectual property. But the deal didn’t change Chinese policies on subsidies, the behavior of state-owned businesses and the role of the state and Communist Party in economic decision-making.

Beijing has shown little interest so far in negotiating how it runs its economy.

Business groups are bound to put increasing pressure on the new administration to roll back the tariffs, which economists say hurt a swath of businesses that rely on imported parts from China and consumers who buy some Chinese products.

On Monday, former George W. Bush administration Treasury Secretary Hank Paulson made a proposal similar to Mr. Bolten’s. “I would only remove existing tariffs when we have extracted a reciprocal and tangible benefit from China, met by defined benchmarks in a phased bilateral trade agreement,” he said at conference.

Mr. Paulson and Mr. Bolten worked together in the Bush administration, where Mr. Bolten was White House chief of staff. Before that, Mr. Bolten was general counsel at the U.S. Trade Representative’s office in the George H.W. Bush administration.

Myron Brilliant, the U.S. Chamber of Commerce’s executive vice president, added his voice to the rollback call on Tuesday. “We would hope that China would agree to the importance of further efforts on structural reforms unaddressed by the phase-one agreement,” he said in an interview, “and that the U.S. and China can find the political space to pull back tariffs that are currently in place.”

 

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