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The Biden administration is taking supply chain security seriously. Although the administration is still at an initial stage of reviewing and reassessing U.S. supply chain resilience and evaluating a wide variety of perceived threats, a multidimensional approach has steadily been taking shape. Echoing the “Build Back Better” campaign slogan, the Biden administration seeks to strengthen the U.S. supply chain on the domestic front to withstand and outcompete China. On the international front, the administration seeks to expand and rally U.S. allies to jointly build a more resilient and interdependent supply chain while addressing shared concerns coherently. The administration carefully chose the alleged violation of human rights and forced labour issue as a unifying starting point with allies and partners that share similar values. It is worth tracking the interaction between the U.S. and its allies and partners when they start to unpack and tackle more controversial issues, such as issues that involve digital sovereignty, investment and export ties with China, etc. which could expose more disagreement than agreements amongst themselves.
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If confirmed, Alan Estevez will be overseeing the maintenance and revision of the Entity List, which is a key component of the Biden administration’s strategy to limit China’s access to crucial cutting edge U.S. technology. The Biden administration is still reviewing its controls policy before it decides whether to sustain, remove, or strengthen the various export control measures placed by the Trump administration. The nomination of Estevez, a DoD veteran, instead of Kevin Wolf, an export control lawyer, signals that the administration would likely address the export control matter through the lens of and with a greater emphasis on national security. Estevez’s testimony before the Senate during his confirmation hearing is expected to provide further clues on how the Biden administration wishes to advance its export control objectives in light of the rapidly-growing U.S.-China technological competition.
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The Biden administration is currently conducting a bottom-up review of America’s trade policy ties with China, the first such review in almost 15 years . Although the USTR official website called the Phase One trade deal “a historic and enforceable agreement”, due to various reasons, including the COVID-19 pandemic, the deal has not produced its expected outcome. Research at PIIE finds that China’s purchase of American goods is still behind target. Although Secretary Yellen claimed that her comment on the trade deal and tariffs are her own personal view, it may have implications regarding the Biden administration’s China tariff-related policies, especially insofar as they relate to revising or reversing the Trump administration’s Section 301 and 232 tariff impositions on China. The future of these tariffs and the Biden administration’s approach to addressing the fundamental market access issues with China needs to be followed closely. Meanwhile, the Court for International Trade (CIT) has granted a temporary halt to the liquidation of Section 301 duties as it reviews the case of over 3,500 American companies challenging the legality of the tariffs, which they argue has hurt U.S. businesses. How the CIT rules on the Section 301 tariffs could have a knock-on impact on how the Biden administration proceeds with addressing its trade policy challenges with China.
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Competition with China appears to be one of the few bipartisan areas of agreement on Capitol Hill. However, both sides of the aisle have different visions and scope as to how the United States should prepare and engage in this competition. The lack of a clearly laid out competition strategy vis-a-vis China by the executive branch further increases this uncertainty as the administration is still carefully reviewing and assessing the current situation and approaches. It is important to keep an eye on the development of the Endless Frontier Act and see how the two parties on the Hill work their differences out and come together to present a more comprehensive and cohesive legislative product that provides clearer insight as to how the U.S. plans to engage in competition with China.
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