USA has increasingly attempted to move away from Free Trade to Protectionist Policies?

The US and European market-based economies are struggling to survive against China’s “very effective” alternative economic model, a top US trade official warned.

In a briefing in Brussels US trade representative Katherine Tai said that Beijing’s “non-market” policies will inflict severe economic and political damage on the two blocs, unless they are tackled through appropriate “countermeasures”.

“I think what we see in terms of the challenge that we have from China is… the ability for our firms to be able to survive in competition with a very effective economic system,” Tai said in response to a question from Euractiv.

…Tai called for US-EU countermeasures to include “defensive” policies such as tariffs as well as measures that are “more on the offense,” including “incentive measures to correct for a market dynamic that is not playing out in our favour”.

Meanwhile, the US’s push towards protectionism also comes amid increasingly hawkish comments on China by senior members of the Biden administration.

US Commerce Secretary Gina Raimondo stated in 2021 that Washington needed “to work with Europe” in order to “slow down China’s rate of innovation”.

Last month, Raimondo similarly noted that the US would do “whatever it takes” to prevent Beijing from getting access, for its military advancement, “to our most sophisticated technology”.

Such comments represent a potential source of friction between the EU and Washington, with EU officials having previously explicitly affirmed that, while they are committed to “de-risking” from Beijing, they wish to see China’s economy continuing to develop.  

“We will continue to buy a lot of materials from China, and we will be very happy that China continues its economic development by selling materials to us,” a senior EU official told Euractiv last week.

Tai refused to be drawn on the issue of whether slowing down China’s economic development is an official US policy objective.

Tai’s remarks came during an event hosted by Brussels-based think tank Carnegie Europe, where she explained that a key cause of the tension between Beijing and Washington is China’s “incredible” economic growth over the past several decades.

“As a result of that incredible story of economic development and growth, you have increasing pressures being created between economic systems.”

“This is something that will require intervention,” she added, stressing the need for the EU and US to work together to “secure and safeguard” their economic and social models.

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