On August 18, 2017, early in Donald Trump’s presidency, the US launched a Section 301 investigation of Chinese policies concerning intellectual property and technology. This was exactly the right thing to do. It was then transformed into something entirely different: tariffs unlinked to intellectual property violations, which was definitely not the right thing to do.

Still, a policy crafted within seven months of inauguration guided the administration, from the Department of Justice’s work on trade secret theft to the United States Trade Representative’s “phase one” trade talks. It’s August 18th in the first year of the Joe Biden presidency. What’s the guiding China policy? Working with allies — toward what? President Trump wrongly emphasized the trade deficit, but President Biden hasn’t made a decision. That would guarantee failure.

Focusing on economic issues, there is continuity between the administrations, but it’s not very useful continuity. President Biden has retained the 301 tariffs, without a clear rationale. They aren’t accomplishing much: Despite COVID-19, goods imports from the People’s Republic of China (PRC) in the first half of 2021 were $11 billion higher than in the first half of 2019.

Trump’s phase one deal hasn’t been revoked, though Beijing isn’t meeting its import commitments. The second major component of phase one, usually forgotten, is better protection of intellectual property by the PRC. Neither the Trump nor Biden administrations offer evidence of any improved behavior. More meaningless laws, enforced only when convenient, still don’t count.

An indirect, telling piece of evidence is the PRC’s hack
of Microsoft Exchange. While cracking down on its own
technology firms in order to protect Chinese data, Beijing still treats
everyone else’s data as high-value targets. This is an even bigger concern with
Congress drawing up a large boost in federal support of basic research. Any
advances will unavoidably be targeted by the PRC, and US research protection
remains painfully inadequate.

Biden has followed Trump in barely responding to China’s role in the pandemic. Not only has China gone unpunished for aggressive deception and possible negligence, the US has failed for 18 months and counting to take obvious actions to protect the economy regarding supply chains.

The Trump administration went ahead with phase one while COVID-19 spread. On supply chains, it got around to the issue roughly six months after the pandemic hit, then never went past the talking stage. The Biden administration is thus far little different, requiring months to issue a supply chain review that is just an IOU for the most basic steps.

Progress has been made in limiting investment in enterprises
linked to the People’s Liberation Army. The Trump administration rightly
identified it as a problem, and the Biden administration has banned investment
in a few dozen firms. While definitely better than nothing, this still isn’t
much.

The Department of the Treasury refuses even to publish accurate data on US investment in the PRC, pretending that our largest investment outlet is the Cayman Islands. The ban on military investment is likely to affect less than 1 percent of the true level of American investment in China, which exceeds $1 trillion. More continuity, little meaningful action.

On the economic side, the administration has choices. Much of the business community wants an ugly return to fake negotiations and no consequences for any Chinese actions. Or President Biden can repeat President Trump’s emphasis on trade deficits, though tariffs have failed. His administration can remove the PRC from critical supply chains. It can restrict more American investment supporting a range of harmful Chinese actions.

An opportunity comes with the nomination of Alan Estevez for Undersecretary of
Commerce for Industry and Security. During Mr. Estevez’s confirmation process,
the administration can unequivocally commit to implementing the export controls
passed overwhelmingly by Congress three years ago, which were essentially ignored by the Trump administration. This could be part of
a program to better protect intellectual property.

Or make national security the core of China policy. Or human rights. Something. Obviously today doesn’t have to be the day, just because it was in 2017. Afghanistan will understandably be the focus for weeks, if not more. But the longer the Biden administration waits on China, the less it can do. And if too much time goes by, doing less might start to look like the goal.

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