Trump’s failed trade war with China? Joe Biden is winning it and, unlike Trump, isn’t crushing our ag sector along the way.
News flash: “The US goods deficit with China in 2023 hit its lowest annual level since at least 2010.”
Donald Trump’s failed trade war with China was an ugly reminder that trade wars, despite Trump’s flippant claim that they’re “good and easy to win,” can do some serious and lasting damage. Trump’s imbroglio, for one example among many (look up the Depression-era Smoot-Hawley tarriffs as a case in point), would have laid our country’s ag economy to waste had it been left to play out.
Why? Because China, a huge buyer of American farm goods, retaliated by boycotting American ag products.
Result? Grain markets collapsed.
Only some desperation intervention by the Trump administration, which sent billions of dollars of mitigation payments to American farmers, kept our ag sector afloat while crop prices tumbled to multi-year lows.
Having had some experience as a livestock producer, I’ll be the first to support the notion that as a matter of national security we must make certain that our food producers, aka farmers and ranchers, remain solvent through economic thick and thins. This poorly thought out trade war’s impact was no exception to that maxim.
However, as the situation evolved, it was clear that American taxpayers were essentially paying for Trump’s rash and self-defeating trade war.
Citing a study on the costs and effects of those mitigation payments by the National Foundation for American Policy, Forbes magazine quoted the study’s conclusion that “the amount of money [used for mitigation payments] raises questions about the strategy of imposing tariffs and permitting the use of taxpayer money to shield policymakers from the consequences of their actions.”
The history of trade wars is the story of one politically motivated disaster after another, and Trump’s was no exception. Trump handed a mess off to Joe Biden.
So how has Biden coped with our difficult trading relationship (as discussed in 2019 by American and Chinese officials in the public domain photo above, posted on wikimedia commons) with China?
Well, just look at the numbers. A recent Bloomberg.com analysis sums it up: “the US goods deficit with China in 2023 hit its lowest annual level since at least 2010.”
Though the turnaround in the deficit, as the Bloomberg piece notes, has more to do with a changing world trading matrix than any broad trade policy decisions made by the Biden administration, the fact remains that rather than attack China’s formidable trading prowess the way Trump hopelessly did by imposing tariffs, Biden’s nuanced approach has had more finesse and is more targeted.
It’s aimed at limiting China’s technological advancement.
Though many of the Trump-era tariffs are still in place, Biden has focused on a broader approach to dealing with China. Says the Brookings Institution in a just-released study, “Biden’s approach thus has been to limit exports of high-technology goods with national security applications to China, maintain Trump’s tariffs, tighten coordination with allies and partners on China, and leverage competition with China to unlock investments at home. This approach has contributed to some notable wins for the American economy.”
For example, Biden’s decision last year to curb shipments of Nividia computer chips to China is part of that overall strategy. Though officially touted as a way to keep China from acquiring American technological know-how as a means of bolstering the country’s military capabilities, the net effect will no doubt slow China’s efforts at building up its non-military economic sectors as well.
Trump’s loud, brash efforts failed. Biden’s measured, calculated approach seems to be working. Put another way, Trump got the headlines, Biden is getting the results.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Reprint with permission.
