Hayward: China's Battered Economy Desperately Needs Biden to Lift Tariffs

Chinese state media spent the past month pressuring President Joe Biden to lift the tariffs imposed by his predecessor Donald Trump – ostensibly because the Chinese Communist Party cares deeply about the travails of American consumers struggling under Biden’s sky-high inflation rates, but actually because the Chinese economy is sinking and Beijing desperately needs those tariffs gone.

For example, mid-July brought sage advice from top Chinese propagandist Hu Xijin – the former Global Times editor who was last seen urging China to start a shooting war with the United States over House Speaker Nancy Pelosi’s planned visit to Taiwan – helpfully advising Biden that his Democrat Party is toast in the midterms unless the U.S. economy perks up, and lifting those tariffs on China is the only way to make that happen.

“The Biden administration has made great efforts to manipulate geopolitics against Russia and China, but it lacks a sober mind in handling the most important economic issues. China is a partner in helping the U.S. lower inflation. China exports large quantities of nice and cheap goods to the U.S., and a large portion of the foreign exchange earned by China is in turn used to purchase U.S. treasuries,” Hu asserted.

Biden and his Democrats might have some trouble running on a platform of helping Beijing flood U.S. markets with more cheap goods so the Chinese Communist Party has more money to help finance America’s out-of-control government spending. 

Hu risibly claimed China is a “promoter of the livelihoods of the U.S. people,” but the U.S. people are not happy with the effect of China’s unfair trade policies on the American manufacturing sector, and many of them will not be eager to save a few bucks by buying goods made with Chinese slave labor. 

Furthermore, some of the American constituencies most upset with China’s trade practices are labor unions, which are very influential in Democrat politics. With polls showing the vast majority of Democrats want someone other than Biden as their candidate in 2024, it is hard to imagine anything that could depress Democrat voter enthusiasm further – but enraging unions by giving away the store to China might just do it.

Hu’s former employer, the state-run Global Times, indefatigably plugged away at Biden with constant editorials throughout June and July, confident asserting that only lifting tariffs on China could save Democrats in the midterm elections. 

With the first U.S. media reports that Biden was thinking about lifting the tariffs in early June, Chinese officials and propagandists went into overdrive, hectoring Biden for his “tendentious” refusal to unilaterally dismiss all the tariffs instantly because his administration harbored some crazy notions about developing a “strategic China trade agenda.”

Chinese “experts” confidently asserted that Biden could shave at least 1.5 percent off his nine-percent inflation by giving Beijing everything it wants, without delay.

A few days later, the Global Times amplified that theme by snarling that Biden should “unconditionally cancel all the additional tariffs that harm not only the two countries but the world economy” instead of seeking reciprocal concessions from China.

In fact, the Chinese Communist paper said unilaterally canceling the tariffs would only be a down payment on all the concessions Biden should give China to “correct more of the mistakes it made” and “bring bilateral ties back on track.”

Like every other malevolent power in the world, the Global Times sniffed out Biden’s weakness and pounced hard, claiming the U.S. president’s remarks about lifting tariffs were evidence “his administration now has to turn to China and lift its self-inflicted Trump-era tariffs amid desperation and failure in handling the worsening inflation situation.”

“The U.S. will change and soften its attitude and tone toward China when it really needs help, and China fully realizes that it is never realistic to expect Washington to keep promises, and only strength and capabilities are useful when dealing with the U.S.,” the Global Times sneered.

By early July, the Global Times saw Biden helplessly pleading with Beijing to save him from political ruin. 

“However, analysts said Beijing will approach Washington’s overtures with caution, as it is still trying to use the tariffs as bargaining chips rather than sincerely correcting its mistakes that have harmed both sides,” the Global Times hissed, advising Biden to beg harder.

This third article quoted “Chinese analysts” who said that “although its economy is in disarray, the U.S. is still being provocative in geopolitical issues to contain China,” so the Biden administration “should not expect China to provide significant support for it to solve its domestic problems.”

“The U.S. tariffs have turned out to have a limited impact on the Chinese economy, and these are just part of the mistakes that the US must correct to bring bilateral ties back on track,” the Global Times wrote, hinting at a variety of sweeteners Biden should offer to persuade Beijing to save him from inflation, in addition to unilaterally conceding on tariffs.

The editors chortled that with Biden’s approval ratings sunk well beneath those of his predecessor, the flailing American president was in no position to make demands of China, but they magnanimously offered to trim some Chinese tariffs on American goods if Biden lifted U.S. tariffs.

Other Global Times articles in July hooted that “tiny” tariff removals would be insufficient to save the Democrats from midterm election annihilation, especially since so many big U.S. corporations like Walmart are now helplessly dependent on Chinese exports, and even if Biden throws in the towel on retail goods, tariffs on China’s mighty industrial sector would still consign America to inflationary hell.

The Global Times laughed at Biden for wasting his time in Saudi Arabia begging for more oil when he should have been signing his surrender to Beijing in the trade war. It squealed with delight over a gloomy Fourth of July that found Biden drowning in malaise, and only China has the life preserver he needed. Last week, it told Biden that time was just about up for saving his presidency by lifting the “reckless” tariffs on almighty China.

The Biden administration responded to this extraordinary pressure campaign by mumbling that President Biden might discuss tariffs in his upcoming phone call to Chinese dictator Xi Jinping, but there would be other items on the agenda. This was not an encouraging response, given that the world just watched Biden hallucinate a conversation in which he manfully slapped Saudi Crown Prince Mohammed bin Salman around for murdering Jamal Khashoggi.

Behind all this Chinese propaganda is the truth that China’s economy is in deep trouble, and with a vital Communist Party congress and a bid for unprecedented power on the horizon, Xi desperately needs those tariffs lifted.

Xi is visibly nervous about security ahead of his big power grab because he might have all the Party power brokers he needs backing his demand for an unprecedented third term, but the Chinese people are growing restless. Xi is frantically trying to convince foreign investors not to bail out of China as the economy groans under endless coronavirus lockdowns. The Chinese real estate market looks like a bomb with a sputtering fuse, as homeowners launch what looks like a full-blown revolt.

President Trump’s trade representative Robert Lighthizer warned last week that not only does China need U.S. tariffs lifted to save its tottering economy, but lifting them would be an act of sabotage against the American economy, not a bid for salvation from high interest rates.

Lighthizer argued it was foolish to blame tariffs imposed years ago for inflation today, since whatever costs the tariffs imposed on American consumers and industry were front-loaded, and in fact they had “almost no price impact across the economy when they were implemented.” 

Chinese imports only account for about two percent of the goods in the American consumer price index, so their relationship to inflation is tenuous. Lighthizer quoted analysts who said the likely benefit to inflation from lifting tariffs would be 0.26 percent at best, a far cry from the grandiose 1.5 percent promises of the Global Times and its “Chinese experts.”

On the other hand, lifting the tariffs would relieve pressure against China to halt its merciless campaign of intellectual property theft, which was the reason many of the tariffs were imposed in the first place – and that IP theft has driven China’s growth into a world-class economic and military threat while siphoning up to $600 billion a year from the U.S. economy.

“Apart from the Chinese Communist Party, the primary beneficiaries of the Biden administration’s tariff reduction would be multinational companies that benefit from Chinese trade malfeasance. They would be able to increase their profits and avoid costly long-term investments in American manufacturing capacity,” Lighthizer warned.

Lighthizer concluded by noting that even China’s promises of political rescue for Biden were specious, since over 70 percent of Americans “support using trade remedies against China to protect American industries and workers,” and the previously-mentioned unions would go ballistic if Biden gives Beijing what it wants.