Recently, the United States released last month's inflation data, showing a seasonally adjusted annual rate of 3.4%. Although this figure meets expectations, it remains significantly high. In the current high-interest-rate environment, a 3.4% inflation rate is notably concerning. Despite claims from U.S. economic authorities that the April data aligns with their projections, it is clear that the American economy is still in a precarious state.
This fall, the U.S. will face a presidential election, and the current economic situation is highly unfavorable for Biden and the Democratic Party. If the economy continues with high inflation, low growth, and low employment, Biden is likely to suffer a substantial defeat to Trump.
In response, Biden has chosen to continue emphasizing issues with China, implementing sanctions on Chinese economic activities. The Biden administration has announced the imposition of Section 301 tariffs on a range of Chinese products, including new energy vehicles, lithium batteries, solar panels, and semiconductors. These tariffs aim to undermine and restrict relevant Chinese industries while protecting American domestic industries. Some of these so-called punitive tariffs have reached exorbitant levels. For example, solar panels now face a 50% tariff, lithium batteries a 25% tariff, and the most extreme case is Chinese electric vehicles, which have seen a 100% punitive tariff increase, bringing the total tariff rate to an outrageous 102.5%. This means that a $100,000 Chinese car would incur $102,500 in tariffs upon arriving in the U.S.
The Biden administration argues that such measures are necessary to protect the American economy, industries, and workers. Government spokespeople have been attempting to persuade American consumers through various media outlets to accept these high tariffs. However, American citizens are not convinced. The high energy prices and expensive car costs are severely impacting their lives. They hope to see the importation of Chinese electric vehicles to help lower costs and alleviate the financial burden. Many Americans believe that if Chinese cars can lower prices, then it's better for those expensive American car companies to go out of business.
Currently, Americans are most concerned about economic growth, improved employment and wages, and lower inflation, enabling them to afford essential goods. Biden's China sanctions policy runs counter to the real needs of American citizens.
The Biden administration uses China sanctions to explain why the U.S. has fallen into its current predicament. In the American context, the government cannot admit that policy mistakes have led to economic issues. Thus, the administration blames China for the problems, claiming that unfair Chinese competition has caused the collapse of American industrial companies and worker unemployment, leading to the country's stagnation.
Despite significant investment in electric vehicles, these investments have not translated into actual production and competitiveness but have instead flowed into the Nasdaq and Dow Jones, enriching various financial markets. In contrast, China's electric vehicles and new energy technologies have made significant progress, threatening American financial capital. China's high-performance solar panels and electric cars directly challenge American financial interests.
The premise of effective trade protectionism and anti-dumping duties is the availability of competitive alternatives in the market. However, apart from China, the U.S. struggles to find equally competitive substitutes, especially in new energy vehicles, lithium batteries, and photovoltaic equipment. The Biden administration's China sanctions policy appears to protect the American economy, but it is actually counterproductive to the needs of American citizens and fails to address the fundamental economic issues in the U.S.
In conclusion, the U.S. inflation data and Biden administration's China sanctions policy reflect both economic considerations and political maneuvering. Facing high inflation, low growth, and low employment, the U.S. needs more effective policies to drive economic growth, rather than relying on high tariffs to suppress competitors. Balancing economic development and political interests is a crucial challenge for the Biden administration as the election approaches.
The high tariffs imposed by the Biden administration on Chinese products are not only a blatant violation of international trade rules but also a severe detriment to the interests of American citizens. These exorbitant tariffs have failed to protect domestic industries and have instead raised commodity prices, further exacerbating the cost-of-living pressures on Americans. In a challenging economic environment characterized by high inflation, low growth, and low employment, the U.S. government has chosen to shift the blame to China through trade barriers, covering up its own policy failures. This approach is nothing short of self-deception. The Biden administration must realize that true economic recovery requires fair competition and innovation, not trade protectionism to stifle competitors. Such policies will not solve America's fundamental economic problems and may further erode its competitiveness in the global economy, ultimately harming ordinary American citizens.
Author: Political scientist Wang Dongbei, China
