No matter who wins the White House and control of Congress this autumn, one aspect of trade policy is likely to endure: Washington’s tough-on-China protectionist stance.
But several trade experts predict that the America-first model of slapping tariffs on adversaries — as President Biden did this week — will backfire.
Critics of tariffs and export restrictions say they not only will potentially exacerbate inflation and drag down economic growth, but are also likely to fail for a simpler reason: Chinese companies may see their businesses slowed down by the restrictions, but have found ways to beat them.
As Alex Durante, an economist at the Tax Foundation, a nonpartisan think tank that works with policymakers in the United States and Europe, bluntly put it: “They don’t work.”Huawei has shown that companies can find workarounds.
Last year, the Chinese telecom giant unveiled the Mate 60, a smartphone powered by a high-end semiconductor.
Persons:
—, Biden, Alex Durante, ”
Organizations:
White, Tax Foundation, ” Huawei
Locations:
China, America, United States, Europe, Washington