It is the language that suggests that the trade dispute between the United States and China under President Joe Biden will continue for a while. The US, the White House announced on Tuesday, will trade strike force against ‘unfair trade practices’ that endanger ‘essential supply lines’. A strike force – it sounds like the jets are ready to take off.
The new body, led by Biden’s trade envoy Katherine Tai, will propose measures – if necessary “unilaterally” – if countries frustrate the supply of critical products to the US. At the start of the corona pandemic, the US – just like European countries – had difficulty getting medical protective equipment and equipment. Now the auto industry is plagued by a chip shortage.
A trade strike force must act when supply lines to the US come under pressure
The Biden administration seems to hold China responsible for this and wants to make the US less dependent on supply lines from China. Specifically, the White House announced on Tuesday an investigation into the import from China of neodymium magnets (magnets of the extremely strong type), which are used in engines, among other things. These magnets are made of, among other things, the rare earth metal neodymium. The US is particularly dependent on Chinese suppliers for some rare earths. The investigation is based on Section 232 of US trade law, which deals with national security. On the basis of this article, Trump unilaterally introduced import duties on, among other things, steel and aluminum from China. Like Trump, Biden sees dependence on Chinese imports not only as an economic problem, but also as a political threat. “Through government intervention, China has secured large portions of value chains in multiple essential metals necessary for national and economic security,” the White House statement said. In February, business newspaper . reported Financial Times that China is considering export restrictions on some rare metals necessary for the production of the US F-35 fighter jet.
The US now wants to “diversify” supply lines. In February, the US Department of Defense invested more than $30 million in the Australian company Lynas Rare Earths, the largest producer of rare metals outside China, to build a factory in the US itself. The US Senate is expected to vote this week on a stimulus package for domestic production of semiconductors and robots, among other things. This industry will then receive subsidies worth 52 billion dollars, the total package amounts to 200 billion dollars. This industrial policy, aimed at technological self-sufficiency, is one of the few themes in which Democrats and Republicans agree. Very symbolically, the package also includes a ban on US diplomats from attending the 2022 Winter Olympics in Beijing.
A version of this article also appeared in NRC Handelsblad on 9 June 2021
A version of this article also appeared in NRC in the morning of June 9, 2021