Remember “Tariff Man?”
He was Donald Trump’s macro superhero alter ego. Tariff Man’s superpower was… well, tariffs, and unlike most superheroes, Trump wielded his powers with no regard for civilian life or collateral damage. (I’m just joking. Sort of.)
As it turns out, the Biden administration was every bit as adversarial towards China as Trump. And then some. The tariffs stayed, and round after round of export and investment restrictions aimed at curtailing Xi Jinping’s access to new technology pushed the bilateral relationship to the breaking point.
The superpower-to-superpower rapport was supposed to improve on the heels of Biden’s diplomatic outreach, which included trips to Beijing for Antony Blinken and Janet Yellen. And Xi’s red carpet-style visit to San Francisco last month was billed as yet another sign of “thaw.” But the tension remains palpable, particularly around China’s efforts to develop advanced computing capabilities.
Now, on the eve of an election year, the Biden White House is considering raising tariffs on “some” Chinese goods, including EVs. That’s according to The Wall Street Journal. China’s exploding EV exports are a source of consternation for Western nations. Any new tariffs would be aimed at “bolster[ing] the US clean-energy industry against cheaper Chinese exports,” the Journal said.
China, meanwhile, turned the screws further in the rare-earth arena, where Xi has considerable leverage. Rare-earth technologies landed on an export restriction list from the Chinese commerce ministry. The new restrictions, which cover technology related to separation and the production of metals and magnets, come on the heels of Xi’s high-profile export controls on gallium and germanium.
The latest rare-earth salvo from Beijing didn’t grab a lot of headlines on Thursday, but it’ll fan national security concerns inside the Beltway — and in other Western capitals. As Bloomberg noted, “critical metals are coming under the spotlight as… the global energy transition stokes fears of potential shortages in the future.”
If Trump comes back to The White House, it’s reasonable to assume America’s fraught bilateral relationship with China could deteriorate even further, although frankly, I’m not sure how much worse things could get.
Earlier this month, Xi put building a “modern industrial system” at the top of China’s key priorities list for 2024. Biden, for all his pretensions to diplomacy (and for all the derision around his supposedly cozy relationship with Xi) is determined to impede Beijing’s progress in areas the US believes could have military applications.
As I’m fond of putting it (and this is hardly an original observation), there’s only one bipartisan issue in Washington these days: China. And the across-the-aisle consensus is overwhelmingly that the US should retain a hawkish approach to “strategic competition.”
In any event, the new tariff threat, alongside Beijing’s move to curb rare-earth refining exports, are yet another reminder that no matter what Biden and Xi say publicly, the US and China are indeed locked in a new cold war. Winner gets the world.
We seem to be only motivated by fear. We always seem to want some fear in our lives. China, rates, prices, etc. We never seem to be afraid of the correct stuff. As the great guru Pogo once memorably said, “We have met the enemy and it is us.”
winner? gets the world???? more like loser……
I don’t know what that means.
I do know what that means.
No. You folks are reading too much into ol’ nevio. For the past — I don’t know — three months, he/she’s been doing the whole short, snarky comment thing for the sake of it. Which is fine. But I’m not sure there’s a lot of value in there, even if he/she can retroactively explain how profound a given snide remark was.
My guess is that both Mr. Lucky and Nevio are referring to the fact that the 8-10 miles between us and the vastness of space is becoming more inhospitable in terms of living conditions for the species, but that is just a guess.
Other than defense and reshoring plays, what names or themes will benefit from the new Cold War?
(Sorry to be crass, but it is our job.)
Also interesting was news from a day or two ago as reports leaked from people who were present at the Xi-Biden meeting in San Francisco. Xi bluntly told Biden that Taiwan would be reunified with China. The WH is framing this as “nothing new,” but it seems really clear that at some point in the not-too-distant future, China will be taking Taiwan by force.
I laughed at this line: “Xi told Biden in a group meeting attended by a dozen American and Chinese officials that China’s preference is to take Taiwan peacefully, not by force, the officials said.”
Well no kidding. Of course that’s their preference. I would prefer to have perfect teeth without ever having to go to the dentist. My preference, however, has little bearing on the realities of dental health.
Also eye catching was this: “The Chinese leader also referenced public predictions by U.S. military leaders who say that Xi plans to take Taiwan in 2025 or 2027, telling Biden that they were wrong because he has not set a timeframe, according to two current and one former official briefed on the meeting.”
The guy straight up said, “You’re wrong about the timing,” without a single quibble about the salient fact that an invasion is the baseline.
The only question is the timing, and I suspect the answer can be found by looking at the primary constraint: Taiwan produces essential chips. Inasmuch as you can’t guarantee the chip fabs won’t be damaged or destroyed during an invasion, I presume China will wait until they have the domestic capacity to substitute Taiwanese chips prior to invading. I think that’s also why the White House has gone so hard towards restricting semiconductor technology exports/transfers to China. Keep an eye open for headlines about China making progress in chip manufacturing–once that problem is solved, nothing is left standing in the way of Xi fulfilling his dreams of a reunified China (the part where Taiwan was never a part of China notwithstanding).
Similarly, the US is trying to be self sufficient in semiconductors.
When neither China nor the US “need” Taiwan for its semiconductors, Taiwan’s situation will be precarious.
While I don’t follow Taiwan news very closely, my sense is that the country may not be building its defenses with the urgency one might expect.
China has options other than massive amphibious invasion. Today’s Red Sea situation suggests how easily China could choke off sea and air transport to Taiwan.
I think China will soon be more than able – probably already is – to take Taiwan by force. The only question is the consequences, and Xi must look at Putin and feel quite encouraged.
I honestly find it fascinating to imagine the different scenarios for conflict over Taiwan. It’s morbid as hell, but there are so many different directions things could go, and there are so many variables to consider. It makes for a great thought experiment. I’ve come around to the conclusion that a major conflict between Taiwan and China is inevitable in the next decade, but the way in which that conflict plays out is truly unpredictable.
I do question the mechanics of how export restrictions on chips actually work. For example, if chips are sold to “country X”, who is not banned, can “country X” resell to China?
In other words, are chips as fungible as oil?
Can you even get a Chinese EV in the US? What would be the point of a tariff? I live in China and paid about $22K for 2023 plugin hybrid BYD Song, about the same size as a CRV. You can get fully electric similarly priced here. I see dozens of Tesla’s, plus a lot of other local EVs on my 30 min commute.
Sort of, though not with Chinese branding. For example, Chinese car company Greely owns the “Swedish” company Volvo. Most people don’t realize that. But if you buy a Volvo EV, there’s a very good chance it was manufactured in China.