Biden’s China tariff threats are more bark than bite, economists say

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U.S. President Joe Biden attends a bilateral meeting with Chinese President Xi Jinping at Filoli estate on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, in Woodside, California, U.S., November 15, 2023. REUTERS/Kevin Lamarque The Biden administration this week sent several signals of a toughening U.S. economic strategy against China. On Wednesday, President Joe Biden met with Japanese Prime Minister Fumio Kishida in Washington to announce bolstered military collaboration between the two countries and to showcase the strength of the U.S.-Japan economic relationship. "We agreed that our two countries will continue to respond to challenges concerning China through close coordination," Kishida said at a joint press conference with Biden after their bilateral discussions. Earlier in the week, Treasury Secretary Janet Yellen delivered tougher economic red lines on a visit to China. Yellen amplified a concern shared by the United States and EU members, that Chinese companies are producing an overcapacity of cheap clean energy products like solar panels and electric vehicles. If there are not enough buyers for the supply, Beijing could dump them on global markets. The U.S. has not ruled out future tariff hikes on Chinese imports if Beijing does not move to address the overcapacity concern, Yellen said in an interview with CNBC's Sara Eisen, following sessions with her Chinese counterpart Vice Premier He Lifeng. China has so far denied the overcapacity accusation as "groundless" and fired back that the U.S. is threatening protectionist trade policies to stifle global competition. The prospect of new economic tensions between the U.S. and China comes as the two countries try to stabilize their already-fraught relationship after several years of minimal communication, sparked in part by a years-long tariff war. "It remains unclear what this relationship will endure in the months and years ahead," Yellen said at a press conference in Beijing on Monday. Taken together, the administration's moves translate into useful talking points for Biden on the 2024 campaign trail, where he and Republican Donald Trump both express China-hawkish worldviews. But they also risk refreezing bilateral relations between the two superpowers.