South China Sea: Biden ‘unlikely’ to stop Trump anti-Beijing policy in ‘larger’ trade war

South China Sea: Military exercises ‘must continue’ says expert

Nick Marro, Global Trade Lead at the Economist Intelligence Unit (EIU), told the President-elect is “unlikely” to shift from his predecessor’s approach to the South China Sea, as both Democrats and Republicans remain highly critical of China’s recent actions. The outgoing Mr Trump has levelled sanctions against Chinese officials and maintained a military presence in the South China Sea throughout the year as tensions grow between the two superpowers.

Mr Farro said Mr Biden “will have his hands full” in addressing the coronavirus pandemic and US recession, but will “maintain US pressure on China”.

While the President-elect will want to pursue “more of a calculated strategy” building on the Trump administration’s policies, the Global Trade Lead said “earth-shattering” changes are unlikely as the new administration enters office.

He added: “The bipartisan consensus that has emerged in DC against China will tie Biden’s hands, particularly in regards to actions taken by the US in response to human rights abuses and national security.

“At best, we’d likely see the administration slow the pace of introducing new punitive measures against China, rather than rolling things back.”

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The EIU Trade Lead went on to spotlight “larger issues” which are preventing Beijing and Washington from a return to trading, as was seen with the now-abandoned Phase One deal signed in January.

Mr Marro said: “I think there are larger issues that now overshadow the discussion on merchandise trade flows, particularly when we think about things like 5G and technological dominance, as well as human rights in Xinjiang or the erosion of One Country, Two Systems in Hong Kong.

“We expect Biden to explore how to re-engage with China on trade topics, but friction will persist over deeper, structural issues such as market access or industrial subsidies.

“Overall, this also won’t halt the broader deterioration elsewhere in the relationship either, such as technology, finance, investment and security.”

Other policies Mr Biden will carry over from Mr Trump will likely include increased trade relationships with southeast Asian counties, but Mr Marro warned this would be “tricky”.

He added: “ASEAN, by contrast, is more tricky because many South-east Asian nations rely on China as a critical export market or source of investment; some also have diplomatic strains with the US. US re-engagement would be positive in bridging those divides.

“From an economic perspective, this would also be generally positive, particularly if trade flows grow from enhanced engagement.

“There’s a small risk that this could, however, revive domestic suspicion in the US over free trade, and the risks that globalisation presents to local jobs and industry.”

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It comes as outgoing Trump administration officials have urged Mr Biden to “hold (China’s) feet to the fire” over the Phase One deal by keeping tariffs on Chinese goods.

Robert Lighthizer, US Trade Representative, said to Reuters Beijing “have done a reasonably good job” in implementing some elements of the trade deal, but urged the President-elect to continue to use the deal’s framework to resolve disputes.

He said: “I would keep the tariffs in place for sure. I think if you see the tariffs dissipating that’s a signal that we’re not serious about understanding that China is a strategic adversary.”

Mr Biden said in August he said the trade deal was “failing”, but then said to the New York Times he plans no “immediate moves” to change its terms.

General Stanley McChrystal, former adviser to President Barack Obama, has also recently urged Mr Biden to step up intervention in the South China Sea over fears Beijing could seize Taiwan.

He said in an interview with Axios: “My concern would be, we wake up one morning and China has just done a fait accompli. They have just showered Taiwan with rockets.”

But Mr Marro said that while the US would reinforce its presence in the Asian-Pacific, “war is not in anyones interest”.

He added: “Even as the US and China flex their muscles in the region, we don’t really see any appetite to engage in direct military conflict — although an increased military presence on both sides will lift the likelihood of diplomatic miscalculations, triggered by, say, an accidental collision or the like.”

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