Anything harming China heals US proving to be just sunk cost fallacy
While US Trade Representative Katherine Tai said in an interview on Monday that relief from US tariffs on China is one option under consideration to counter the highest US inflation in four decades, the effects of such a move would be quite limited, as the root cause of the inflation is the limitless quantitative easing monetary policy carried out by the Joe Biden administration and its predecessor.
Checking inflation is only a pretext for the US government to attempt to lower the tariffs, as it is well aware that they have not only been a failure, but costly to itself.
Yet it would be damaging for the Biden administration to admit that ahead of the mid-term elections as it has chosen to run with the anti-China baton handed over by its predecessor.
Under pressure from Republicans and others who have criticized the Biden administration for lacking a formal strategy on China, had he not been infected with the novel coronavirus, US Secretary of State Antony Blinken was to have delivered a speech on Thursday outlining the US policy toward China.
That policy was expected to hatch some of the rotten eggs laid by the previous administration, whose assumption was anything harming China heals the US.
Although that has been shown not to be so, the US
Securities and Exchange Commission on Wednesday expanded the list of Chinese entities facing possible expulsion from American exchanges under the Holding Foreign Companies Accountable Act that was signed into a law by then president Donald Trump in 2020. This came even though China proposed in early April to revise confidentiality rules on offshore listings that would facilitate cooperation on audit oversight.
Also on Wednesday, the US Senate moved to begin formal legislative talks on a long-stalled bill to pay for $52 billion in semiconductor chips manufacturing subsidies and boost US competitiveness with China. House and Senate lawmakers will now begin formal negotiations to thrash out a bill that can be approved by both chambers which is aimed at helping the US out-compete China and the rest of the world for decades to come.
But rather than surrendering to political expediency, the Biden administration should demonstrate courage and wisdom and untie the bell the Trump administration tied round the tiger’s neck and return China-US relations to the right track by promoting cooperation rather than engaging in zero-sum competition.
The US should give up its unhealthy obsession with suppressing and containing China’s development for its own well-being as its phobia is becoming a debilitating neurosis.