Biden Administration

The U.S. Won't Beat China by Being More Like China

Biden's argument about a strategic competition with China ignores America's advantages.

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President Joe Biden's first 100 days in office saw the executive using the COVID-19 pandemic to push for a huge and largely permanent expansion of the federal government.

But in his speech to a joint session of Congress on Wednesday, Biden gave a preview of how his administration is going to justify the ever-greater growth of government power even after the pandemic wanes. The next crisis is all about China.

"We're in a competition with China and other countries to win the 21st century," he said. "And we're falling behind in that competition."

Later, invoking that competition again, Biden warned that China "is closing in fast." Biden recalled telling Chinese President Xi Jinping that "we welcome the competition" and later promised that America would stand up to "unfair trade practices that undercut American workers," and "won't back away from our commitment to human rights and fundamental freedoms."

The troubling thing about all this isn't that Biden is calling attention to the abuses of the Chinese communist regime. Certainly, what is happening in Hong Kong and in Xinjiang and in Chinese-controlled cyberspace deserves the strongest condemnation from America's political leaders and anyone who cares about human freedom.

No, the troubling thing is that Biden's prescription for dealing with China often sounds like a plan for copying China's economic policies. His address on Wednesday contained a long list of ways to give the government a firmer hand on the economy—raising taxes, removing choices from employers and workers, and sending power to Washington bureaucrats.

Since taking office, Biden has called for the passage of a bill that would revoke workers' right to refuse to join a union in certain professions. He has refused to repeal former President Donald Trump's tariffs that are a burden on the U.S. economy—in fact, Commerce Secretary Gina Raimondo has argued that "the data shows that those tariffs have been effective." And on Wednesday he promised to double down on protectionism and industrial policy, paid for with higher taxes on corporations.

This is misguided at best. At worst, it is tantamount to an admission of defeat. One doesn't usually seek to copy those who are less successful, after all.

"Ultimately, the United States needs to outcompete China and the way we do that is through open markets and immigration—our traditional strengths," Clark Packard, trade policy counsel for the R Street Institute, a free market think tank, tells Reason. "We're not going to outcompete Beijing by hiding behind tariff walls, deploying sclerotic domestic subsidies to politically favored industries, and choking off immigration. In fact, that is a recipe for decline and stagnation."

To be fair to Biden, he's hardly alone in doing this. Far from it. Sen. Ted Cruz (R–Texas) blocked the admission of refugees from Hong Kong last year because he believed it was an anti-China maneuver (in fact, it was quite the opposite). Sens. Marco Rubio (R–Fla.) and Josh Hawley (R–Mo.) have become the faces of the GOP's new economic nationalism and its embrace of industrial policy. China is a convenient pretext for just about any pet policy, it seems.

And of course it was Trump who steered America toward this resurgence of industrial policy in the name of combating China. He imposed tariffs on steel and aluminum imports that were supposed to protect American metal manufacturers from foreign competition, supposedly causing a rebirth of steelmaking in America. Trump often claimed, without evidence, that his policies were responsible for six or seven (he has never been good at being consistent with his lies) new steel plants being built.

How's all that working out now? American steel has become significantly more expensive since Trump's tariffs were imposed, but those higher prices aren't resulting in more plants being built or workers being hired. U.S. Steel announced Friday that it was canceling plans for a new manufacturing facility in Pennsylvania.

Biden and his advisers are more policy savvy than Trump's team—though that's not a high bar—but there's little reason to think that the current administration will be able to make industrial policy work any better.

Take Biden's "Buy American" plan—a pseudo-populist idea that he almost literally stole from Trump. It will guarantee that "American tax dollars are going to be used to buy American products made in America that create American jobs," Biden said Wednesday.

That's not a bad bumper sticker, but it is lousy policy. Buy American rules force the government to spend more money for the same products, effectively shortchanging taxpayers. The Buy American rules already on the books—Biden's plan mostly amounts to tightening loopholes in them—increased costs for taxpayers by $94 billion in 2017.

On Wednesday, Biden said he wants America to have more wind turbines as a way to combat climate change. But he also said he wants those wind turbines to be built in Pittsburgh, not Beijing—in which case he'll get fewer wind turbines to combat climate change. Which priority should prevail?

Markets do a fantastic job of sorting those priorities. Government has a much less impressive track record.

The very notion of defeating China is somewhat silly on its face, considering the many, many economic links between the world's two largest economies. Neither America nor China would be as prosperous in a zero-sum world where the two have decoupled from one another.

So when Biden pumps up China as a foil or rival to the United States' economic might, what he's really doing is playing to populist feelings and stoking another crisis in the hopes of smashing opposition to his proposals. And as long as those proposals amount to "beat China by being more like China," they will continue to deserve serious opposition.

NEXT: Tennessee Man Arrested for Posting Picture Mocking Dead Police Officer Files First Amendment Lawsuit

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  1. How are you buffoons enjoying Trump 2.0?

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    4. Democrats’ and republicans embrace of tarrifs and abandonment of free trade principles is a damn shame. Hey republicans, What happened to letting the market choose the winners and consumers choosing the cheapest products or did Trump wipe your memories clean?

      1. There’s no such thing as free trade with unfree nations. Every penny of trade with Red China will be used to obtain technology to surveil and oppress its people, build up its military and threaten its neighbors, and enables the authoritarian dictatorship to survive. This incurs costs to the U.S. to upgrade its military so long as the U.S. is committed to defending Asia from Red China. So, imposing tariffs on Red Chinese trade is covering the true cost of that trade – the added military costs involved. There’s a hidden cost to most foreign trade – U.S. military spending to protect that trade by militarily guaranteeing peace and stability so that trade can take place. For a free market to work efficiently, costs must be reflected in the price.

        The original sources of revenue of the U.S. were imposts, excises and duties – no income tax which is far more invasive of privacy and stifling of growth. It would be a step forward to go backward – repeal the income tax and revert to imposts, excises and duties, that is tariffs.

        The U.S. should withdraw from Asia after letting Japan, South Korea and Taiwan obtain the nuclear weapons necessary to defend themselves from Red China.

        The original purposes for opening trade with Communist China was to exploit the Red Chinese split with the Soviets during the Cold War and that trade would bring more freedom for China. Well, the Cold War is long over. And, trade with Red China, instead of bringing more freedom, has enabled the communist (actually de facto fascist) regime to survive, cement its power, and become more oppressive, as well as to become more of a threat to its neighbors and the world.

        There’s no such thing as free trade with unfree nations.

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  2. “We’re not going to outcompete Beijing by hiding behind tariff walls, deploying sclerotic domestic subsidies to politically favored industries, and choking off immigration. In fact, that is a recipe for decline and stagnation.”

    Perfect. Unleash the economy. Free movement of goods, services, and people. What is so hard about that?

    1. There’s no need for more bureaucracy and bigger government if you do that. Someone might figure out it’s not necessary.

    2. It’s politically difficult, biden is trying to show that he’s pro unions, free trade seemed to have lost the support it once did from both major parties(ironically republicans are against free trade more than democrats according to some polls) and Trump pretty much silenced free trade supporters among republicans.

      1. “Free trade” in this context is good for big business. Ideally, what’s good for American corporations would also be good for American workers. The supporters of Sanders, Trump, Ron Paul, Tea Party, Occupy Wall St., etc. are reacting to this.

        The establishment has responded to their concerns by elaborating, “FREE TRADE GOOD. GOOOOD. FREE FREE GOOD TRADE GOOD. REPUBLICAN DEMOCRAT RED BLUE FUCK YOU COMMIE BAD. RACISM” which is obviously a more compelling narrative.

      2. “according to some polls”. People have no clue what free trade is any more. I would bet my bottom dollar that the respondents are in favor of MANAGED trade, not FREE trade. They’re in favor of trade treaties spelling out details and minutia that have nothing to do with FREE trade and everything to do with trade MANAGED by their favored political party..

    3. There’s no such thing as free trade with unfree nations. Red China uses that trade to obtain technology it could never develop itself, build up its military to threaten its neighbors, develop surveillance technology and oppress its people, enable the oppressive regime to maintain power and survive when it likely would have fallen like the Soviets. The U.S. boycotted the Soviets and the Warsaw Pact and it fell. The U.S. has extensive trade with Red China and it enabled it to survive.

      It’s entirely right from a libertarian standpoint to regulate, tax or prohibit trade with dictatorships, since such trade is aiding and abetting tyranny. The U.S. should abolish the income tax and revert to the original forms of revenue in the Constitution – excises, imposts and duties, i.e. tariffs.

      The U.S. should allow Japan, Taiwan and South Korea to develop nuclear weapons so they can defend themselves from Red China without U.S. assistance. Then the U.S. should withdraw from Asia. U.S. cities are at nuclear risk so long as Asia is protected by the U.S. “nuclear umbrella”. So long as the U.S. is protecting Asia from Red China, it should collect enough money from tariffs to cover the added military expenses. In a free-market, the costs of goods should be covered by the price.

  3. Is it any shock that Democratic policies sound like Chinese policies? They are both based on centralized authoritarian governments with elites in control and political dissenters demonized, silenced, and now openly punished.

    Poor Boehm just can’t help himself when it comes to Trump. The entire article is supposed to be about Biden’s plans, but then comes criticism that Trump couldn’t remember whether it was 6 or 7 steel plants that were built… just lies…. all lies. However, I’m sure that he will treat all of Biden’s political claims last night to the same rigorous standard of lack of citations and evidence… tomorrow.

    Seriously that’s Boehm’s criticism now? And Eric wants “evidence”… when it comes to every political claim now? If only Boehm would hold himself to that standard. Who knows why a company would cancel plans to build a new plant? An actual journalist would call and ask. The change might also have something to do with Biden’s tax plans, Biden’s war on energy, Biden’s war on business, a belief that the economy will collapse. Or it could just be they are reprioritizing or concerned about taking on debt. Seriously, Boehm’s articles have devolved into something I would have been ashamed to write in high school.

    1. It is about the fallacy of central planning and they all do it. Politicians pick favored industries and give them rewards in the form of subsidies, tax breaks, or trade barriers on competition. Biden is doing it now with windmills. Trump did it with steel and the article correctly points out it failed. All presidents and politicians do this even on the local level. It is a form of corruption to buy votes and campaign money.

  4. Mmm hmm okay well maybe not pimping this guy all last year would help your case. But oh well!

  5. The problem is that we’re $30 trillion in debt caused mostly by social security and medicare, whereas China is running a surplus. This is particularly ironic and tragic considering that due to the one-child policy, many Chinese are supporting all four grandparents alone – without any government support. And then they’re lending us money for us to support ours!

    Obviously these programs are unsustainable and must be abolished. This would do the most to improve our competitive position against China.

    Nevertheless I think that this can be another American century – if we spread our values of freedom and equality to other countries. That means Chinese Americans, who’ve lived here for centuries in some cases, must share the blessings they learned here back with their home country. And before you call me racist – I say the same for all countries and ethnicities. It always suprises me how many libertarians think that America should have a monopoly on our politics.

    1. You don’t think we value freedom – as you assert on every firearm thread, we only exist for the benefit of the collective.

    2. Social Security and Medicare is separate from the national budget. It is funded by the payroll tax FICA, not income tax. It does not spend from general funds. If there is a surplus in those funds the trust fund buys interest bearing government bonds. If there is a deficit they can redeem those bonds. When we talk about the national budget or deficit it does not include social security which is a different issue.

      You are never going to get rid of it because the people who have been paying into it are not going to let you.

      1. What if there is a deficit in the payroll taxes, and no surplus in general funds?

      2. You do realize the monies flowing into SS are spent in the “general” fund with moving longer term govt debt as “assets”..given the govt is running annual deficits, this little accounting hand fake just increased the financial hole. Now you can argue we can just roll over the debt which we do and have the Fed print more money to buy the new dept thereby “paying” back into the SS fund but you are doing it be printing money and adding to the annual interest payment which eventually crowds out..wait for it..SS, Medicare, Defense and the rest. At this point just have the Treasury print as much money as their want and continue legal tender laws to not allow anything but the dollar to be used. I mean just ride this thing down to what we all know is the end game

      3. You are never going to get rid of it [social security] because the people who have been paying into it are not going to let you.

        If we enact a stiff tariff on trade with Red China and use those revenues to make up for revenue shortfalls as younger people opt out of Social Security, we can get rid of it. It’s all in the revenue source. No reason to not exploit trade with the communist Chinese dictatorship to raise revenues via tariffs so as to get rid of Social Security.

    3. “That means Chinese Americans, who’ve lived here for centuries in some cases, must share the blessings they learned here back with their home country.”

      I have tried. They asked why I cared more about Hong Kong’s protestors than America’s at the Capitol on Jan 6, one of whom was shot dead. Even Hong Kong’s violent protestors have not been shot dead. “Why do you talk to us about freedom when you have the world’s highest incarceration rate?” I was asked.

      Re Xinjiang, I was asked why it was okay to blow up Muslims in other countries, but not okay to try and assimilate the ones in your own country–apparently the reeducation camps are modeled after our boarding schools for Native Americans.

      i said idk

      1. Because they’re both wrong. Because our U.S. government is not about Liberty, Private Property and Individual Rights any more. Because Power Mongers and GREEDY Money Grubbers are in charge now.

      2. Red Chinese trolls always attack and misdirect rather than defend. Because they cannot defend authoritarian tyranny, which has murdered 10s of millions in that country.

  6. Maybe a minimum wage of $30/hr would show China we mean business!

    1. Still wouldn’t be enough for the average American to purchase a wind turbine made in Pittsburgh.

    2. He he. Piker. I would propose a $1000/hr minimum wage. Then we’d all be rich!

  7. “We’re in a competition with China and other countries to win the 21st century,” he said. “And we’re falling behind in that competition.”

    What, Joe’s afraid that China’s going to eat our lunch? C’mon man!

  8. Poor reason can’t catch a break, children are still in cages, Biden is banning Indians from the country and spending is increasing.

    1. It’s almost like candidates the campaign solely on not being their predecessor turn out to do the exact same things.

    2. His tweets could get pretty mean too! Biden does have an anger problem, as many senile old people do.

  9. “Ultimately, the United States needs to outcompete China and the way we do that is through open markets and immigration”

    This is an idiotic statement since the Chinese do neither and may outcompete the US soon.

    1. You sure about that? The corporate tax rate in China ranges from 15-25% and they don’t need to import immigrants who will work for scraps because their own people already do that. Most of their markets are remarkably free from any kind of regulation. As long as you don’t pose a threat to The Party they don’t care what the hell you do.

      1. They also don’t have property tax on private residences, ironically.

  10. No surprise Democrats want to invade the USA and change it into a communist country. WHY ARE YOU HERE DEMOCRATS!!! F-EN MOVE!

    Democrats catch-21.
    1. [WE] mob Democrats want open borders so communist country citizens can escape their h*llhole and move into the USA.
    2. [WE] mob Democrats want to invade the USA and make it a communist h*llhole.

    Never, ever, ever do imbecilic Democrats think, “Why don’t I JUST MOVE/LIVE in a communist h*llhole.”

    Same repeated story from CA to TX, China to USA, Mexico to USA, etc, etc, etc….. Under all the smoke & mirrors sits the undeniable truth. Democrats just want to STEAL what capitalism has created. Conquer and Consume, Conquer and Consume. Democrats are the blood thirsty leaches of the world now matter how many butterflies and roses they paint in their ever-ending effort to leach and such/consume.

    1. Democrats: The power of Gov-Gun threats = Wealth.
      Republicans: Value = Wealth.

      The theology of the left belongs in prison.

  11. Yet you guys shilled for the guy owned by China who has spent 50 years in politics pushing for more and .ore govern.ent comtrol.

    ‘wrong, but within normal parameters’

  12. Biden’s argument about a strategic competition with China ignores America’s advantages.

    Whereas China has free slave labor, a burgeoning middle class of almost 2 billion people, and owns 80% of our foreign debt, the United States has a diminishing middle class with less disposable income than it had in 1975 and upwards of 40 million illegal aliens using about half of its welfare resources while the budget continues to swell to the point where if the interest rate increased by 1%, 2/3 of the entire tax receipts each year would go to nothing more than interest payments.

    For the love of God, ‘murica, don’t become a successful world superpower like China. Keep the cucking up.

    1. China … owns 80% of our foreign debt…

      If I owe you a thousand dollars, or even a hundred thousand dollars, that’s my problem. If I owe you a million dollars, that’s your problem….a billion dollars …or a trillion dollars? That’s definitely your problem.

  13. This is trash ,There’s no need for more bureaucracy and bigger government if you do
    https://wapexclusive.com ,that. Someone might figure out it’s not necessary.

  14. To me the whole idea that there is this national competition that America must “win” and China must therefore “lose” is a nationalist collectivist myth.

    It is not a zero sum game.

    Are there human rights issues? Yes but that is not a competition.

    Are there unfair business practices? Yes and not just with China. Those should be addressed but seeing it as a competition is going to get you nowhere and it hasn’t.

    1. It is a competition, ultimately military.

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  16. Team D as decided all the things Boehm says are advantages are white supremacy, i.e. capitalism.

  17. Love free trade..now let’s everyone go back to the gold standard that led to America’s industrial revolution, created the middle class and allowed the US to win two world wars…its fair and gets govt out of our lives…so to speak.

    Anyone…anyone?

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