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Paul Krugman
By Paul Krugman
Opinion Columnist
A recurring theme in the Republican crusade in recent years has been the portrayal of Democrats in general, and President Biden in particular, as well-off with China, in contrast to Donald Trump’s supposed toughness.
Incidentally, the opposite argument to Biden’s China policy was that he was feigning his weakness by not banning TikTok. That’s ironic now, since Trump, who favored a ban, suddenly replaced his position, around the same time he spoke to a billionaire who donates to Republican campaigns and owns a significant stake in the Chinese-controlled company.
However, even before his about-face on TikTok, the truth is that, even if Trump maintained a xenophobic line that veered toward racism (e. g. , seeking to rename Covid-19 the “Chinese virus”) and imposed flashy but useless tariffs, he never had a coherent strategy to confront our biggest rival. Biden, on the other hand, has quietly taken a very hard line on trade, especially with China.
I’ve been pointing out for a while that Biden’s complicated economic nationalism is a very big problem, much bigger than Trump’s protectionist attacks. In fact, Biden’s policies are so difficult for China that while I help them, they make me feel a little nervous. But in case you don’t understand what I’m saying, let me quote someone who happens to agree with me: the Chinese government.
China has just filed a complaint with the World Trade Organization over the Inflation Reduction Act, which, despite its name, is necessarily an attempt to fight climate change by subsidizing the transition to a low-emission economy. Specifically, China complained about electricity. Subsidies to vehicles that he said unfairly discriminate against the production of Chinese-made car battery components.
Honestly, I didn’t see it coming. The new U. S. trade policy favors domestic production and, as we shall see, may violate WTO rules. But for China, more than for any other country, complaining about targeted subsidies is a colossal act of audacity.
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