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Analysis: The China trade war is one thing Joe Biden won't be rushing to fix

January 21, 2021. Summarized by summa-bot.

Compression ratio: 22.7%. 1 min read.

US President Joe Biden is inheriting a tense and messy relationship with China from his predecessor.

"China is undercutting American companies by dumping products, erecting trade barriers, and giving away subsidies to corporations," she told the Senate Finance Committee, echoing some of the Trump administration's biggest criticisms of the world's second largest economy.

The Trump administration agreed to what was billed as a "truce" with Beijing in early 2020, almost two years after starting the trade war by slapping heavy tariffs on Chinese goods.

But the US-China relationship was "one-sided," he added, pointing out that Beijing has often demanded American companies partner with Chinese ones and hand over large stakes in their operations, among other requirements.

While removing tariffs on Chinese goods likely won't be a big priority for Biden, several experts — and Yellen herself — said the new administration will want to make better use of its major alliances to craft a more predictable trade strategy.

Biden "continues to say he wants to approach China via a coalition of other democracies, and that will take time to build," said William Reinsch, a trade expert at the Center for Strategic and International Studies who served for 15 years as president of the National Foreign Trade Council.

The consultancy Eurasia Group sees US-China tensions as one of the biggest risks of 2021, adding that Biden will likely enlist allies from the European Union, Japan and India to push back on China.

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