It’s Not a Cease-Fire, But Beijing and Washington Are Back on Speaking Terms

In March, the first meeting between China and the U.S. since Joe Biden arrived at the White House almost ended in a fistfight. The trade war between the two powers continues, and Washington has even imposed new sanctions. It doesn’t matter. Meetings between senior officials are still taking place.

When it comes to China, Joe Biden is like Donald Trump. The American president issued an executive order Thursday evening extending the blacklisted number of Chinese businesses from 31 to 58 which are banned from benefiting from American wealth due to their links with the Chinese army. The majority of these businesses are involved in arm sales, surveillance and infrastructure. Among the big names are the Chinese National Offshore Oil Corporation, China Railways Construction, China Mobile, China Telecom, Hikvision and Huawei. For Washington, these businesses not only represent a security risk to the United States, but to its allies as well.

Therefore, there is no cease-fire between the two leading world powers. The sanctions imposed by the Trump administration still remain, if not having been expanded by the Democratic president. Notably, tariffs imposed in 2018 on washing machines and solar panels imported from China have now been extended to other Chinese products, at a value of $370 billion a year.

The Dissatisfied United States

An agreement requiring China to purchase large quantities of cereal was indeed signed in 2020. But according to Washington, Beijing hasn’t respected the arrangement. Beijing admits this, but is arguing that COVID-19 restricted all trade. In the last few months, China redoubled its efforts to increase the importation of cereal and meat, but the United States still isn’t satisfied.

In other words, relations remain tense. Washington considers Beijing a strategic competitor. The Biden administration has the same criticism that was made during the Trump era: China’s failure to respect human rights in Hong Kong and its crackdown on Uighurs in Xinjiang province; a failure to respect intellectual property rights and supporting state-owned businesses.

‘Pragmatic’

So. Despite tensions, dialogue isn’t dead. The Biden administration indeed expanded the list of Chinese businesses under sanction on Thursday evening, but emphasized that they were applied in a “targeted and scoped manner.” This has led observers to think that the United States has no desire to enter into a total war. At the same time, businesses that have been sanctioned are not concerned.

But above all, Washington and Beijing have resumed the conversation. On Wednesday, Chinese Vice Premier Liu He met virtually with Treasury Secretary Janet Yellen. Last week, he spoke with Katherine Tai, the U.S. trade representative. In both cases, the discussion turned to the customs war. On Thursday, a spokesperson for Beijing spoke of “solving specific problems for producers and consumers in a pragmatic way.”

The World’s Factory

“This is by no means a return to normal exchanges between the two governments, but the situation is much better than it was in Anchorage,” said Shi Yinhong, director of the Center of American Studies at Renmin University in Beijing. It was reference to March 18, when the first top-level dialogue since Biden took office occurred in a small city in Alaska, but ended in brutal failure. The shock was such that it was difficult to predict how the relationship between the two powers would develop.

Chinese leaders are arguing for the end of the trade war and the lifting of multiple sanctions on Chinese businesses. In addition, the Biden administration is under pressure from American companies linked to the “world’s factory.” According to a public study in February by the American Chamber of Commerce in China, a total decoupling of the two economies would come at a cost of more than $200 billion a year to the American economy and hundreds of thousands of American jobs.