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    Yellen Says China Trade Deal Has ‘Hurt American Consumers’

    The Treasury secretary said an agreement made by the Trump administration, which remains under review, had failed to address fundamental problems between the two countries.WASHINGTON — Treasury Secretary Janet L. Yellen has cast doubt on the merits of the trade agreement between the United States and China, arguing that it has failed to address the most pressing disputes between the world’s two largest economies and warning that the tariffs that remain in place have harmed American consumers.Ms. Yellen’s comments, in an interview with The New York Times this week, come as the Biden administration is seven months into an extensive review of America’s economic relationship with China. The review must answer the central question of what to do about the deal that former President Donald J. Trump signed in early 2020 that included Chinese commitments to buy American products and change its trade practices.Tariffs that remain on $360 billion of Chinese imports are hanging in the balance, and the Biden administration has said little about the deal’s fate. Trump administration officials tried to create tariffs that would shelter key American industries like car making and aircraft manufacturing from what they described as subsidized Chinese exports.But Ms. Yellen questioned whether the tariffs had been well designed. “My own personal view is that tariffs were not put in place on China in a way that was very thoughtful with respect to where there are problems and what is the U.S. interest,” she said at the conclusion of a weeklong trip to Europe.President Biden has not moved to roll back the tariffs, but Ms. Yellen suggested that they were not helping the economy.“Tariffs are taxes on consumers. In some cases it seems to me what we did hurt American consumers, and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China,” she said.But reaching any new deal could be hard given rising tensions between the two countries on other issues. The Biden administration warned U.S. businesses in Hong Kong on Friday about the risks of doing business there, including the possibility of electronic surveillance and the surrender of customer data to the authorities.Chinese officials would welcome any unilateral American move to dismantle tariffs, according to two people involved in Chinese policymaking. But China is not willing to halt its broad industrial subsidies in exchange for a tariff deal, they said.Xi Jinping, China’s top leader, has sought technological self-reliance for his country and the creation of millions of well-paid jobs through government assistance to Chinese manufacturers of electric cars, commercial aircraft, semiconductors and other products.It might be possible to make some adjustments at the margins of these policies, but China is not willing to abandon its ambitions, said both people, who spoke on the condition of anonymity because they were not authorized to discuss the issue publicly.Academic experts in China share the government’s skepticism that any quick deal can be achieved.“Even if we go back to the negotiating table, it will be tough to reach an agreement,” said George Yu, a trade economist at Renmin University in Beijing.The Trump administration also sought, without success, to persuade Chinese officials to abandon heavy subsidies for high-tech industries. Robert E. Lighthizer, Mr. Trump’s trade representative, ended up imposing tariffs aimed at preventing subsidized Chinese companies from driving American companies out of business.Getting China to Buy American MadeThe United States and China named last year’s pact the Phase 1 agreement, and promised to negotiate a second phase. But that never happened.The tariffs have played a particularly large role in the auto industry.In response to Mr. Trump’s 25 percent tariff on imported gasoline-powered and electric cars from China, American automakers like Ford Motor have abandoned plans to import inexpensive cars from their Chinese factories. Chinese automakers like Guangzhou Auto have also shelved plans to enter the American market.Chinese car exports have surged this spring as new factories come into production, many of them built with extensive subsidies. But the inexpensive Chinese cars have mainly gone elsewhere in Asia and to Europe, even as car prices in the United States have climbed.Ms. Yellen did not specifically address automotive tariffs.The first phase of the trade deal included a requirement for a high-level review this summer. The agreement requires China to stop forcing foreign firms to transfer their technology to Chinese companies doing business there.Phase 1 also included a Chinese pledge to buy an additional $200 billion of American goods and services through the end of this year. The agreement was intended to make sure that China did not retaliate for American tariffs by discouraging Chinese companies from buying American goods.Although China has resumed large-scale purchases of U.S. goods since the countries’ trade war, neither the overall value of these purchases nor the composition of purchases has met the Trump administration’s hopes.China fell short of its commitments by 40 percent last year and is off by more than 30 percent so far this year, said Chad P. Bown of the Peterson Institute for International Economics, who has been tracking the purchases. The pace of agricultural purchases has picked up, but China is not buying enough cars, airplanes or other products made in the United States to meet its obligations.China also pledged in the Phase 1 agreement that its purchases of American goods would continue rising from 2022 through 2025.Biden’s Blended ApproachThe Biden administration is cognizant that all of these purchase requirements have frustrated American allies who feel that the agreement has cost them sales.One reason China is not eager to reopen potentially acrimonious negotiations over American tariffs and Chinese subsidies is that the Phase 1 agreement has transformed trade relations between the two countries, said the people familiar with Chinese economic policymaking. Trade has gone from being one of their biggest sources of friction to becoming one of the least contentious areas of their relationship.Under Mr. Biden, the United States has maintained pressure on China and in some respects stepped it up, focusing on concerns about its humanitarian record that Mr. Trump usually overlooked.In March, the Biden administration placed sanctions on top Chinese officials as part of an effort with Britain, Canada and the European Union to punish Beijing for human rights abuses against the largely Muslim Uyghur minority group.In June, the White House took steps to crack down on forced labor in the supply chain for solar panels in the Chinese region of Xinjiang, including a ban on imports from a silicon producer there. It also set aside a dispute with Europe over aircraft subsidies for Boeing and Airbus in June so that the United States could more effectively corral allies to counter China’s ambitions to dominate key industries.China has also been accelerating the pace of “decoupling” from the United States, directing its technology companies to avoid initial public offerings in the United States and list in Hong Kong instead. That has been a big blow to Wall Street firms that have reaped large advisory fees from Chinese companies listing their shares in the United States.Katherine Tai, the U.S. trade representative, has said little so far about the Phase 1 agreement, preferring to emphasize that the administration is still developing its policy toward China.Pete Marovich for The New York TimesThe Treasury Department, with its close ties to Wall Street, has long been much more wary of antagonizing China than the Office of the United States Trade Representative, a separate cabinet agency that oversees trade policy. Katherine Tai, Mr. Biden’s trade representative, has said little so far about the Phase 1 agreement, preferring to emphasize instead that the administration is still developing its policy toward China.Ms. Yellen’s official meetings with her Chinese counterparts have so far been sparse. The Treasury Department announced last month that she had held a virtual call with Liu He, China’s vice premier. They discussed the economic recovery and areas of cooperation, and Ms. Yellen raised concerns about China’s human rights record.She expressed those concerns publicly during a speech in Brussels this week, telling European finance ministers that they should work together to counter “China’s unfair economic practices, malign behavior and human rights abuses.”The comment made waves within the Chinese government. A spokesman for China’s Ministry of Foreign Affairs, Zhao Lijian, said that “China categorically rejects” Ms. Yellen’s remarks and described them as a smear.The Biden administration has won praise for maintaining a hawkish stance toward China without the provocative approach of the Trump administration, which destabilized the global economy with tariffs and a trade war.“Joe Biden has done what he said he would do — he has collected the allies and got them aligned in a similar manner on similar issues in a way that greatly strengthens America’s position vis a vis China,” said Craig Allen, president of the US-China Business Council.Michael Pillsbury, the Hudson Institute scholar who was one of Mr. Trump’s top China advisers, said the Biden administration’s approach to China was shaping up to be tougher and “more effective” than Mr. Trump’s because Mr. Biden’s aides were united in their view that the United States cannot successfully confront China alone.The big question is what comes next.Mr. Bown, of the Peterson Institute, said the Biden administration’s review of the China trade policy was taking so long most likely because the Trump administration had made so many sweeping and sometimes conflicting actions that it was a complicated portfolio to inherit. There are also complex political calculations to be made when it comes to removing the tariffs.“It’s politically toxic to be seen to be weak on China, so you’re going to need to have your ducks in a row in terms of your economic arguments,” Mr. Bown said.Despite the recent animosity, the United States was able to help coax China into joining the global tax agreement that Ms. Yellen has been helping to broker. The Biden administration believes that China wants to be part of the multilateral system and that fully severing ties between the two countries would not be healthy for the global economy.“I think we should maintain economic integration in terms of trade and capital flows and technology where we can,” Ms. Yellen said, adding that the relationship must balance security requirements. “Clearly, national security considerations have to be very carefully evaluated and we may have to take actions where, when it comes to Chinese investment in the United States or other supply chain issues, where we really see a national security need.”Alan Rappeport reported from Washington, and Keith Bradsher from Beijing. More

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    Global Tax Overhaul Gains Steam as G20 Backs New Levies

    The approach marks a reversal of years of economic policies that embraced low taxes as a way for countries to attract investment and fuel growth.VENICE — Global leaders on Saturday agreed to move ahead with what would be the most significant overhaul of the international tax system in decades, with finance ministers from the world’s 20 largest economies backing a proposal that would crack down on tax havens and impose new levies on large, profitable multinational companies.If enacted, the plan could reshape the global economy, altering where corporations choose to operate, who gets to tax them and the incentives that nations offer to lure investment. But major details remain to be worked out ahead of an October deadline to finalize the agreement and resistance is mounting from businesses, which could soon face higher tax bills, as well as from small, but pivotal, low-tax countries such as Ireland, which would see their economic models turned upside down.After spending the weekend huddled in the halls of an ancient Venetian naval shipyard, the top economic officials from the Group of 20 nations agreed to forge ahead. They formally threw their support behind a proposal for a global minimum tax of at least 15 percent that each country would adopt and new rules that would require large global businesses, including technology giants like Amazon and Facebook, to pay taxes in countries where their goods or services are sold, even if they have no physical presence there.“After many years of discussions and building on the progress made last year, we have achieved a historic agreement on a more stable and fairer international tax architecture,” the finance ministers said in a joint statement, or communiqué, at the conclusion of the meetings.The approach marks a reversal of years of economic policies that embraced low taxes as a way for countries to attract investment and fuel growth. Instead, countries are coalescing around the view that they must fund infrastructure, public goods and prepare for future pandemics with more fiscal firepower at their disposal, prompting a global hunt for revenue.“I see this deal as being something that’s good for all of us, because as everyone knows, for decades now, the world community, including the United States, we’ve been participating in this self-defeating international tax competition,” Treasury Secretary Janet L. Yellen said on the sidelines of the G20 summit. “I’m really hopeful that with the growing consensus that we’re on a path to a tax regime that will be fair for all of our citizens.”The agreement followed a joint statement last week that was signed by 130 countries who expressed support for a conceptual framework that has been the subject of negotiations at the Paris-based Organization for Economic Cooperation and Development for the better part of the last decade. The O.E.C.D. estimates that the proposal would raise an additional $150 billion of global tax revenue per year and move taxing rights of over $100 billion in profits to different countries.The backing of the broad framework by the finance ministers on Saturday represented a critical step forward, but officials acknowledged that the hardest part lies ahead as they try to finalize an agreement by the time the leaders of the Group of 20 nations meet in Rome in October.Among the biggest hurdles is an ongoing reluctance by low-tax jurisdictions like Ireland, Hungary and Estonia, which have refused to sign on to the pact, potentially dooming the type of overhaul that Ms. Yellen and others envision. Hungary and Estonia have raised concerns that joining the agreement might violate European Union law and Ireland, which has a tax rate of 12.5 percent, fears that it will upend its economic model, siphoning the foreign investment that has powered its economy.Absent unanimous approval among the members of the European Union, an accord would stall. Establishing a minimum tax would require an E.U. directive, and directives require backing by all 28 countries in the union. Ireland had previously hinted that they would object to or block a directive and Hungary could prove to be an even bigger hurdle given its fraught relationship with the union, which has pressed Hungary on unrelated rule-of-law and corruption issues.Prime Minister Viktor Orban of Hungary has stated that taxes are a sovereign issue and recently called a proposed global minimum corporate tax “absurd.” Hungary’s low corporate rate of 9 percent has helped it lure major European manufacturers, especially German carmakers including Mercedes and Audi.Bruno Le Maire, France’s finance minister, said on Saturday that it was important that all of Europe supports the proposal. G20 countries plan to meet with Ireland, Hungary and Estonia next week to try and address their concerns, he said.“We will discuss the point next week with the three countries that still have some doubts,” he said. “I really think the impetus given by the G20 countries is clearly a decisive one and that this breakthrough should gather all European nations together.”Policymakers also have yet to determine the exact rate that companies will pay, with the United States and France pushing to go above 15 percent, and negotiations are continuing over which firms will be subject to the tax and who will be excluded. The framework currently exempts financial services firms and extractive industries such as oil and gas, a carve-out that tax experts have suggested could open a big loophole as companies try to redefine themselves to meet the requirements for exemptions.Domestic politics could also pose hurdles for the countries that have agreed to join but need to turn that commitment into law, including in the United States, where Republican lawmakers have signaled their disapproval, saying the plan would hurt American firms. Big business interests are also warily eyeing the pact and suggesting they plan to fight anything that puts American companies at a disadvantage.“The most important thing is understanding that if there is going to be an agreement, that there cannot be an agreement that is punitive toward U.S. companies,” said Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce. “And that, of course, is of great concern.”A report this month from the European Network for Economic and Fiscal Policy Research found that only 78 companies are expected to be affected by the overhaul but nearly two-thirds of them are American. The researchers estimated that the new taxes would raise $87 billion in revenue and that Apple, Microsoft, Alphabet, Intel, and Facebook would pay $28 billion of that total.At the heart of the proposal is the idea that, if countries all agree to a minimum tax, it will prevent businesses from seeking out low-tax jurisdictions for their headquarters, depriving their home countries of revenue. Ms. Yellen has criticized what she calls a “race to the bottom” in global taxation.Ms. Yellen said that she would be working in the coming months to address the concerns of countries with reservations but that the deal could still proceed even if some countries did not join. She pointed to an enforcement mechanism that would raise U.S. taxes on corporations that have headquarters in countries that continue to be tax havens but do business in America.Still, changing domestic tax laws will not be quick or easy, including in the United States, whose success in ushering in a new tax regime is being closely watched as a harbinger of whether a global overhaul can come to pass. Senior officials at the G20 meetings said that approval of the agreement within the United States was crucial to its broader acceptance.Republican lawmakers have suggested they will put up a fight.Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee and one of the architects of the 2017 tax cuts, said that the Biden administration’s tax proposals would never pass.“Certainly in Congress there’s a great deal of skepticism,” Mr. Brady said in a telephone interview this week. “My prediction is that at the end of the day, even if an agreement is reached, what the president will bring back to Congress is an agreement that advantages foreign companies and workers over American ones.”Ms. Yellen indicated that Democrats were prepared to pass as many of the tax changes as they can through a budgetary procedure called reconciliation that would alleviate the need for Republican votes. She assured her international counterparts that the Biden administration was ready to deliver its end of the bargain and pushed back against the idea that the new tax system would harm American workers.“For the United States, it’s going to be a fundamental shift in how we choose to compete in the world economy,” Ms. Yellen said. “Not a competition based on rock-bottom tax rates, but rather on the skills of our work force, our ability to innovate and our fundamental talents.”Policymakers continue to grapple with what the global minimum tax rate will be and what exactly will be subject to the tax.A separate proposal calls for an additional tax on the largest and most profitable multinational enterprises, those with profit margins of at least 10 percent. Officials want to apply that tax to at least 20 percent of profit exceeding that 10 percent margin for those companies, but continue to debate how the proceeds would be divided among countries around the world. Developing economies are pushing to ensure that they will get their fair share.Mr. Bradley, of the Chamber, said that the details of a final agreement would determine how punitive it would be for companies. Representatives from Google and Facebook have been in touch with senior Treasury officials as the process has played out.American businesses are also worried about being put at a disadvantage by a 21 percent tax that President Biden has proposed on their overseas profits, if their foreign competitors are only paying 15 percent. The Biden administration also wants to raise the domestic corporate tax rate from 21 percent to 28 percent. Democrats in Congress are moving forward with legislation to make those changes to the tax code this year.“If a U.S. company is trying to compete globally with a significantly higher tax burden because of this significantly higher minimum tax on its operations, that’s a competitive issue for being able to be successful,” said Barbara Angus, a global tax policy leader at Ernst & Young.Washington and Europe also remain at odds over how to tax digital giants like Google and Amazon. At the G20 summit, finance ministers expressed optimism that such obstacles could be overcome. In his closing news conference after the deal was reached, Daniele Franco, Italy’s finance minister, hailed the agreement as historic and called on the countries that had yet to join to reconsider.“To accept global rules is, for each country, difficult. Each country has to be prepared to compromise,” Mr. Franco said. “To have worldwide rules for taxing multinationals, for taxing the profits of big companies is a major change, is a major achievement.”Liz Alderman More

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    High Lumber Prices Add Urgency to a Decades-Old Trade Fight

    WASHINGTON — A trade dispute over Canadian lumber that began when Ronald Reagan was president has become a political problem for President Biden, with home builders and members of Congress urging the administration to try to strike a deal that could help bring down the cost of critical building materials.Lumber prices remain far above prepandemic levels, even after falling sharply in recent weeks, an increase driven in part by strong housing demand and an abundance of home improvement projects during the pandemic. The higher-than-normal prices are among a wide range of supply chain complications that have cropped up as the economy picks up steam.But unlike other commodities that have been in short supply, lumber is also the subject of a long-running trade dispute between the United States and Canada, adding a layer of diplomatic intrigue to the scramble for in-demand building materials. The two countries are locked in a thorny disagreement over softwood lumber, which is widely used to build single-family homes.In the latest chapter of the dispute, the Trump administration in 2017 imposed duties on Canadian softwood lumber imports in response to what it deemed unfair trade practices. Now, with lumber prices driving up the cost of new home construction, the Biden administration is facing pressure to seek a resolution to the long-running spat.“If you look at the structure of home building — a lot of wood there,” said Representative Brian Higgins, Democrat of New York, whose Buffalo-area district borders Canada. “So the cost of softwood lumber is going to profoundly influence the cost that is inevitably passed on to the consumer.”The National Association of Home Builders, an influential trade group, has been particularly vocal about the issue, and numerous lawmakers have taken an interest as well. Last month, a bipartisan group of nearly 100 House members, led by Mr. Higgins and Representative Kevin Hern, Republican of Oklahoma, wrote to Katherine Tai, the United States trade representative, urging her to seek a deal with Canada.But signs of diplomatic progress have been scarce, and Canadian lumber producers may soon face higher duties. The Commerce Department said last month that it tentatively planned to double the duties later this year, to 18.3 percent from 9 percent for most producers.The move was cheered by the American lumber industry, but it drew criticism from U.S. home builders along with the Canadian government and the country’s lumber industry. Chuck Fowke, a custom home builder in Florida and the chairman of the National Association of Home Builders, said the planned increase “shows the White House does not care about the plight of American home buyers and renters.”Commerce Secretary Gina Raimondo, who met with the home builders group last month, said afterward that she would seek to “identify targeted actions the government or industry can take to address supply chain constraints.”Finding a resolution to the trade dispute is unlikely to be a simple undertaking for the Biden administration. “There’s really nothing that the administration can do quickly,” said Scott Lincicome, a senior fellow at the libertarian Cato Institute, who criticized the lumber duties and the system that allows domestic industries to seek them.The United States and Canada have been at odds over lumber since the 1980s. The saga has gone on for so long that lumber disputes over the years are commonly referred to with Roman numerals, akin to the Super Bowl. The current dispute is called Lumber V; Lumber IV took place during the George W. Bush administration.The friction between the United States and Canada over softwood lumber stems in large part from the differences in how timber is harvested in the two countries. While most timberland in the United States is privately owned, most of Canada’s forestland is publicly owned, and companies pay fees set by provincial governments to harvest timber from their land.A lumberyard in Victoria, British Columbia. Canadian lumber producers may soon face higher duties. James MacDonald/BloombergA sawmill in Chemainus, British Columbia. The U.S. Commerce Department said it tentatively planned to double the duties this year to 18.3 percent for most Canadian producers.James MacDonald/BloombergAmerican lumber producers contend that the fees are artificially low and amount to an unfair government subsidy. The United States and Canada have reached a series of agreements over the years regarding lumber imports into the United States, but the most recent deal expired in 2015.“The core problem, and partly why you can never resolve this, comes down to structure,” said Eric Miller, a former Canadian official and the president of the Rideau Potomac Strategy Group, a consultancy.In 2016, toward the end of the Obama administration, the American lumber industry petitioned the government to impose duties on Canadian softwood lumber imports in response to what it contended were unfair trade practices. The proceedings continued under the Trump administration, which in 2017 imposed duties of 20.2 percent for most Canadian producers. The rate was lowered to 9 percent last year.The status of the long-running dispute took on a new urgency as the price of lumber soared over the past year. The National Association of Home Builders estimated in April that higher lumber costs had added nearly $36,000 to the price of an average newly constructed single-family home. A benchmark for the price of framing lumber set a record high of $1,515 per thousand board feet in May, four times the price at the beginning of 2020, before beginning to plummet. Last week, the price stood at $930, still more than double its level at the start of 2020, according to Fastmarkets Random Lengths, the trade publication that publishes the benchmark.“As an economist, it is very hard to understand why we’re taxing something we don’t produce enough of,” said Robert Dietz, the chief economist for the National Association of Home Builders.On the other side of the issue are U.S. lumber producers. The U.S. Lumber Coalition, an industry group, has argued that strong demand, not duties, is driving lumber prices and that the duties make up only a small portion of the total cost of lumber for new homes.The coalition credits the duties with strengthening the U.S. lumber industry, saying in a statement that American sawmills had expanded capacity in recent years, producing an additional 11 billion board feet of lumber since 2016. “More lumber being manufactured in America to meet domestic demand is a direct result of the trade enforcement, and the U.S. industry strongly urges the administration to continue this enforcement,” the coalition said.Dustin Jalbert, a senior economist at Fastmarkets, a price reporting firm, attributed the chaotic lumber market and high prices in large part to effects from the pandemic. At the start of the pandemic, he said, sawmills “assumed the worst” and curbed production, only for the housing market to rebound and for demand to soar.Mr. Jalbert said the duties stemming from the U.S.-Canada dispute were not a major reason for the high prices. “In terms of the short-term pricing situation, it’s lower down the list in terms of the factors that are driving the record prices that we’ve seen in the market,” he said.Mr. Dietz of the home builders association acknowledged in an interview last month that “you could suspend the lumber tariff and you’re still not going to cool off this market,” adding, “A lot of the driving forces are on the demand side.”The National Association of Home Builders, a trade group, estimated in April that higher lumber costs had added nearly $36,000 to the price of an average newly constructed single-family home.Wes Frazer for The New York TimesThe status of the long-running dispute took on a new urgency as the price of lumber soared over the past year.Wes Frazer for The New York TimesBut he argued that getting rid of the duties would still be a useful step. “This is not a moment where we need to be saying: ‘Well, that’s going to help, but it’s not going to solve the problem. Therefore, it’s not a solution,’” he said.Even if the lumber duties are playing only a modest role in the current market conditions, the issue has still grabbed the attention of lawmakers. Ms. Tai and Ms. Raimondo both faced questions about lumber during hearings on Capitol Hill this spring.“The home builders, the Realtors, everybody in my state is talking about the cost of lumber,” Senator John Thune of South Dakota, the No. 2 Senate Republican, told Ms. Tai last month.Ms. Tai seemed to fault Canada for the stalemate. “In order to have an agreement and in order to have a negotiation, you need to have a partner,” she told Mr. Thune. “And thus far, the Canadians have not expressed interest in engaging.”Adam Hodge, a spokesman for Ms. Tai, said the United States was “open to resolving our differences” with Canada over softwood lumber. But, he added, “That would require addressing Canadian policies that create an uneven playing field for the U.S. industry, and to date, Canada has been unwilling to adequately address these concerns.”A spokeswoman for Mary Ng, the Canadian international trade minister, offered a different take on the Canadians’ interest in engaging on the issue.“Minister Ng has raised the United States’ unfair and unwarranted duties on softwood lumber at every opportunity, including directly with the president, with Secretary Raimondo and with Ambassador Tai, and we welcome discussions,” the spokeswoman, Alice Hansen, said. Prime Minister Justin Trudeau also raised the matter with Mr. Biden on the sidelines of the Group of 7 summit in Britain this month, Ms. Hansen said.At a recent parliamentary hearing, Ms. Ng described the duties as “a tax on the American people” that makes housing more expensive for them.“We do believe that a negotiated settlement would be in the best interest of both countries,” she said. “But in the meantime, we must defend against these unwarranted tariffs, which we will continue to do.” More

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    Senate Passes Bill to Bolster Competitiveness With China

    The wide margin of support reflected a sense of urgency among lawmakers in both parties about shoring up the technological and industrial capacity of the United States to counter Beijing.WASHINGTON — The Senate overwhelmingly passed legislation on Tuesday that would pour nearly a quarter-trillion dollars over the next five years into scientific research and development to bolster competitiveness against China. More

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    China's Solar Dominance Presents Biden With Human Rights Dilemma

    President Biden’s vow to work with China on issues like climate change is clashing with his promise to defend human rights.WASHINGTON — President Biden has repeatedly pledged to work with China on issues like climate change while challenging Beijing on human rights and unfair trade practices.But those goals are now coming into conflict in the global solar sector, presenting the Biden administration with a tough choice as it looks to expand the use of solar power domestically to reduce the United States’ carbon dioxide emissions.The dilemma stems from an uncomfortable reality: China dominates the global supply chain for solar power, producing the vast majority of the materials and parts for solar panels that the United States relies on for clean energy. And there is emerging evidence that some of China’s biggest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, programs often seen as a red flag for potential forced labor and human rights abuses.This week, Mr. Biden is inviting world leaders to a climate summit in Washington, where he is expected to unveil an ambitious plan for cutting America’s emissions over the next decade. The administration is already eyeing a goal of generating 100 percent of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from only 40 percent last year. To meet that target, the United States may need to more than double its annual pace of solar installations.That is likely to be an economic boon to China, since the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. Nearly half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.“It’s put the Democrats in a hard position,” said Francine Sullivan, the vice president for business development at REC Silicon, a polysilicon maker based in Norway with factories in the United States. “Do you want to stand up to human rights in China, or do you want cheap solar panels?”The administration is increasingly under pressure from influential supporters not to turn a blind eye to potential human rights abuses in order to achieve its climate goals.“As the U.S. seeks to address climate change, we must not allow the Chinese Communist Party to use forced labor to meet our nation’s needs,” Richard L. Trumka, the president of the A.F.L.-C.I.O., wrote in a letter on March 12 urging the Biden administration to block imports of solar products containing polysilicon from the Xinjiang region.China’s hold over the global solar sector has its roots in the late 2000s. As part of an effort to reduce dependence on foreign energy, Beijing pumped vast amounts of money into solar technology, enabling companies to make multibillion-dollar investments in new factories and gain market share globally.China’s boom in production caused the price of panels to plummet, accelerating the adoption of solar power worldwide while forcing dozens of companies in the United States, Europe and elsewhere out of business.A solar equipment factory in China’s Jiangxi Province in January. China’s hold over the global solar sector has its roots in the late 2000s, when Beijing began pumping vast amounts of money into solar technology.CHINATOPIX, via Associated PressIn the past few years, Chinese polysilicon manufacturers have increasingly shifted to Xinjiang, lured by abundant coal and cheap electricity for their energy-intensive production.Xinjiang is now notorious as the site of a vast program of detention and surveillance that the Chinese government has carried out against Muslim Uyghurs and other minority groups. Human rights groups say the Chinese authorities may have detained a million or more minorities in camps and other sites where they face torture, indoctrination and coerced labor.In a report last year, Horizon Advisory, a consultancy in Washington, cited Chinese news reports and government announcements suggesting that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar had accepted workers transferred with the help of the Chinese government from impoverished parts of Xinjiang.Jinko Solar denied those allegations, as did the Chinese government. Zhang Longgen, a vice chairman of Xinjiang Daqo — a unit of one of the companies cited by Horizon Advisory — said that the polysilicon plants were not labor intensive, and that the company’s workers were freely employed and could quit if they wanted, according to Global Times, a Chinese Communist Party-owned newspaper. The report said that only 18 of the 1,934 workers at Xinjiang Daqo belonged to ethnic minorities, and that none were Uyghur.The other companies did not respond to requests for comment.Experts have had difficulty estimating how many laborers may have been coerced into working in Chinese solar facilities given restrictions on travel and reporting in Xinjiang. Many multinational companies have also struggled to gain access to the region’s factories to rule out the risk of forced labor in their supply chains.Mark Widmar, the chief executive of First Solar, a solar panel maker based in the United States, said exposure to Xinjiang was “the unfortunate reality for most of the industry.”“How the industry has evolved, it’s made it difficult to be comfortable that you do not have some form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, that’s going to be tough.”The revelations have attracted attention from lawmakers and customs officials, and prompted concerns among solar investors that the sector could be destined for tougher regulation.Under the Trump administration, American customs agents took a harder line against products reportedly made with forced labor in Xinjiang, including a sweeping ban on cotton and tomatoes from the region. Those restrictions have forced a reorganization of global supply chains, especially in the apparel sector.The Biden administration has said it is still reviewing the Trump administration’s policies, and it has not yet signaled whether it will pursue other bans on products or companies. But both Mr. Biden and his advisers have insisted that the United States plans to confront China on human rights abuses in Xinjiang.A spokeswoman for the National Security Council said that the draconian treatment of Uyghurs “cannot be ignored,” and that the administration was “studying ways to effectively ensure that we are not importing products made from forced labor,” including solar products.Congress may also step in. Since the beginning of the year, the House and Senate have reintroduced versions of the Uyghur Forced Labor Prevention Act, which would assume that imports from Xinjiang were made with forced labor and block them from American ports, unless the importer showed proof otherwise. The House version of the bill singles out polysilicon as a priority for enforcement.The legislation has broad bipartisan support and could be included in a sweeping China-related bill that Democrats hope to introduce this year, according to congressional staff members.Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has led an effort to help solar companies trace materials in their supply chain. It has also organized a pledge of 236 companies to oppose forced labor and encouraged companies to sever any ties with Xinjiang by June.Some Chinese companies have responded by reshuffling their supply chains, funneling polysilicon and other solar products they manufacture outside Xinjiang to American buyers, and then directing their Xinjiang-made products to China and other markets.Analysts say this kind of reorganization is, in theory, feasible. About 35 percent of the world’s polysilicon comes from regions in China other than Xinjiang, while the United States and the European Union together make up around 30 percent of global solar panel demand, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.John Smirnow, the general counsel for the Solar Energy Industries Association, said most solar companies were already well on their way toward extricating supply chains from Xinjiang.A high-security facility that is believed to be a re-education camp in the Xinjiang region of China in 2019. President Biden and his advisers have said that they plan to confront China on human rights abuses in Xinjiang.Greg Baker/Agence France-Presse — Getty Images“Our understanding is that all the major suppliers are going to be able to supply assurances to their customers that their products coming into the U.S. do not include polysilicon from the region,” he said.But it is unclear if this reorganization will quell criticism. Episodes of forced labor have also been reported in Chinese facilities outside Xinjiang where Uyghurs and other minorities have been transferred to work. And restrictions on products from Xinjiang could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.Human rights advocates have argued that allowing Chinese companies to cleave their supply chains to serve American and non-American buyers may do little to improve conditions in Xinjiang and have pressed the Biden administration for stronger action.“The message has to be clear to the Chinese government that this economic model is not going to be supported by governments or businesses,” said Cathy Feingold, the director of the A.F.L.-C.I.O.’s International Department.Chinese companies are also facing pressure from Beijing not to accede to American demands, since that could be seen as a tacit criticism of the government’s activities in Xinjiang.In a statement in January, the China Photovoltaic Industry Association and China Nonferrous Metals Industry Association condemned “irresponsible statements” from U.S. industries, which they said were directed at curbing Xinjiang’s development and “meddling in Chinese domestic affairs.”“It is widely known that the ‘forced labor’ issue is in its entirety the lie of the century that the United States and certain other Western countries have concocted from nothing,” they said.On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.But bringing solar manufacturing back to the United States could be a challenge, analysts said, given the time needed to significantly bolster American production, and it could also raise the price of solar panels in the short term.The United States still has a handful of facilities for manufacturing polysilicon, but they have faced grim prospects since 2013, when China put retaliatory tariffs on American polysilicon. Hemlock Semiconductor mothballed a new $1.2 billion facility in Tennessee in 2014, while REC Silicon shut its polysilicon facility in Washington in 2019.China has promised to carry out large purchases of American polysilicon as part of a trade deal signed last year, but those transactions have not materialized.In the near term, tensions over Xinjiang could be a boon for the few remaining U.S. suppliers. Ms. Sullivan said some small U.S. solar developers had reached out to REC Silicon in recent months to inquire about non-Chinese products.But American companies need the promise of reliable, long-term orders to scale up, she said, adding that when she explains the limited supply of solar products that do not touch China, people become “visibly ill.”“This is the big lesson,” Ms. Sullivan added. “You become dependent on China, and what does it mean? We have to swallow our values in order to do solar.”Chris Buckley More

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    The Agency at the Center of America’s Tech Fight With China

    Washington lawmakers, lobbyists and other parties have been vying to influence how the Bureau of Industry and Security, under the Biden administration, will approach a technology relationship with China.WASHINGTON — As tensions between the United States and China escalate, a little-known federal agency is at the center of a debate in the Biden administration about how tough an approach to take when it comes to protecting American technology.The Bureau of Industry and Security, a division of the Commerce Department, wields significant power given its role in determining the types of technology that companies can export and that foreign businesses can have access to.In recent months, Washington lawmakers, lobbyists and other interested parties have been vying to influence how the agency, under the Biden administration, will approach a technology relationship with China that is both crucial for American industry and national security.China hawks, including a collection of national security experts, congressional Republicans and progressive Democrats, say that in the past, American industry has held too much sway over the bureau. They have been pressing the administration to select a leader for the agency who will take a more aggressive approach to regulating the technology that the United States exports, according to people familiar with the discussions.Their opponents, including some current and former Commerce Department employees, and many in industry and Washington think tanks, caution that putting a hard-liner at the helm could backfire and harm U.S. national security by starving American industry of revenue it needs to stay on the cutting edge of research and encouraging it to relocate offshore.“It’s a very complicated relationship between the economic and national security interest,” said Lindsay Gorman, a fellow for emerging technologies at the German Marshall Fund. “The fine line the Commerce Department has to walk is protecting against national security risks that may not be top of mind for the industry in the short run, without killing the golden goose.”The bureau’s powers became clear during the Trump administration, which wielded its authority aggressively, though somewhat erratically, using the agency to curb exports of advanced technology goods like semiconductors to the telecommunications company Huawei and other Chinese businesses. It weaponized the bureau’s so-called entity list, adding hundreds of Chinese companies to a list that blocks exports of American products to companies or organizations that pose a national security threat.But many of these regulations were enacted haphazardly and often did less to restrict Chinese access to American technology than the Trump administration intended. And at times, President Donald J. Trump offered Chinese companies concessions from these punishments to try to advance a trade deal with China, including offering a reprieve for the Chinese telecom company ZTE and licenses so companies could continue supplying goods to Huawei and Semiconductor Manufacturing International Corporation.The Biden administration is still carrying out a review of its China policies and has not indicated how it plans to use the bureau’s powers. Its initial engagement with China got off to an acrimonious start last week at a meeting in Anchorage, and President Biden, in his first news conference on Thursday, emphasized investing heavily in new technologies to compete with Beijing.“The future lies in who can, in fact, own the future as it relates to technology, quantum computing, a whole range of things, including in medical fields,” Mr. Biden said.“I see stiff competition with China,” he added. “They have an overall goal to become the leading country in the world, the wealthiest country in the world and the most powerful country in the world. That’s not going to happen on my watch because the United States are going to continue to grow and expand.”Last week, the Commerce Department said it had issued subpoenas to multiple Chinese technology companies asking them to provide more information on their activities, potentially presaging tighter restrictions on their use and transfer of American data.U.S. officials will soon need to make difficult choices about specific policy actions. That includes how to use the Commerce Department’s powers, including whether to block more exports of American technology, whether to keep or scrap Mr. Trump’s tariffs on foreign metals, and how to set the standards for national security reviews of foreign investments.The complication stems from China’s position as both the largest export market for many multinational companies, and America’s biggest acknowledged security threat.China’s authoritarian leaders have proposed plans to expand their market share in emerging industries like semiconductors, artificial intelligence and quantum computing, while easing the country’s dependence on foreign energy and technology. And as Beijing’s economic influence and technological capacities grow, so will its military and geopolitical influence.“China is the only country with the economic, diplomatic, military, and technological power to seriously challenge the stable and open international system — all the rules, values, and relationships that make the world work the way we want it to,” Secretary of State Antony J. Blinken said this month in his first major address, in which he called the U.S. relationship with China “the biggest geopolitical test of the 21st century.”The Commerce Department is responsible for promoting the interests of American business and has always had a close relationship with industry. But as the China tech competition has intensified, the department has taken on a larger role in regulating company activity, as well. In 2018, Congress updated its laws governing export controls, giving the Bureau of Industry and Security more power to determine what kind of emerging technologies cannot be shared with China and other geopolitical rivals.A semiconductor factory in Nantong, China. The country accounts for about one-third of the industry’s revenue.Agence France-Presse — Getty ImagesBut critics say the bureau has given companies and industry groups too much influence over its regulatory process and failed to adopt to the new realities of global competition.“The industry viewpoint has been the commerce viewpoint since the fall of the Soviet Union, and they’re not able to make the adjustment that the world has changed,” said Derek Scissors, a resident scholar at the American Enterprise Institute who advocates stronger export restrictions.“The industry capture is not, in my view, industry saying, ‘Hey, meet me at the Jefferson Memorial and I have a suitcase of money for you.’ It’s that these guys have been trained for 30 years to think that exports are good for America and that’s that,” Mr. Scissors said. “So surprise, they don’t want tighter export controls.”But distancing the bureau from industry may have repercussions, too. Critics say that without the guidance of industry on complex technological issues, regulations can easily backfire, harming the American economy while doing little to combat security threats from China. And any policy that hamstrings innovation could in turn hold back the American military, which acquires most of its technology from the private sector.John Neuffer, the chief executive of the Semiconductor Industry Association, said that China accounted for about one-third of his industry’s revenue, and that it would be “disastrous” for semiconductor companies to not have access to such a huge and growing market.“When you start cutting off capital profits that can flow into R&D, many of them coming from the huge Chinese market, you really undermine our ability to stay at the tip of the spear in terms of semiconductor innovation,” Mr. Neuffer said.“The sense of urgency in recent years inclined our leadership to make decisions without reference to what industry thought,” said Daniel H. Rosen, a founding partner of Rhodium Group. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”The Biden administration has already run into the political minefield surrounding the bureau. In her confirmation hearing in January, Gina Raimondo, the new secretary of commerce, attracted criticism from Republicans when she declined to commit to keeping Huawei on the bureau’s entity list. Ms. Raimondo later said that she would use the entity list “to its full effect,” and that Huawei and ZTE should be on the list.With Ms. Raimondo sworn in to her post this month, the Biden administration is considering candidates to lead the Bureau of Industry and Security. It has become a contentious process, a kind of proxy battle among trade advisers, industry groups and lawmakers of both parties for the future of the United States’ tech strategy.One early contender, Kevin Wolf, a partner in the international trade group at the law firm Akin Gump, has run into resistance from some China hawks in Washington over his industry ties. Mr. Wolf, who was previously assistant secretary at the bureau, issued the sanctions against ZTE. He has consistently argued that restrictions that are unclear and unpredictable can backfire, “harming the very interests they were designed to protect.”But critics have found fault with his work on behalf of industry since leaving the government, including counseling clients on what is permitted under Mr. Trump’s regulations, and trying to obtain licenses for his clients to supply products to Huawei and S.M.I.C.Mr. Wolf said that he had merely helped companies understand the new rules, as other export control lawyers do, and that it was the Trump administration that was responsible for creating a new process to grant companies licenses to supply products to listed entities. Some who believe the Bureau of Industry and Security requires a more fundamental transformation have instead pushed for James Mulvenon, an expert on the Chinese military at research firm Defense Group, who has publicly called for refocusing the bureau’s mandate to place national security interests before those “of Silicon Valley, Wall Street and other multinationals.”The administration may also be considering less prominent candidates for the bureau’s three Senate-confirmed posts, like Brian Nillson, a former employee of the Bureau of Industry and Security and the State Department, or export control lawyers like Douglas Jacobson and Greta Lichtenbaum, people familiar with the deliberations say.Whoever leads the bureau, officials at the National Security Council are likely to play a guiding role, according to people familiar with the deliberations. More

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    Amid Shortfalls, Biden Signs Executive Order to Bolster Critical Supply Chains

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyAmid Shortfalls, Biden Signs Executive Order to Bolster Critical Supply ChainsThe order is intended to help insulate the economy from future shortages of critical imported components by making the United States less reliant on foreign supplies.President Biden on Wednesday signed an executive order requiring his administration to review critical supply chains with the aim of bolstering American manufacturing.Credit…Doug Mills/The New York TimesJim Tankersley and Feb. 24, 2021Updated 7:28 p.m. ETWASHINGTON — Automakers have been forced to halt production because of a lack of computer chips. Health care workers battling the coronavirus pandemic had to make do without masks as the United States waited on supplies from China. And pharmaceutical executives worried that supplies of critical drugs could dry up if countries tried to stockpile key ingredients and block exports.Deep disruptions in the global movement of critical goods during the pandemic prompted President Biden on Wednesday to take steps toward reducing the country’s dependence on foreign materials. He issued an executive order requiring his administration to review critical supply chains with the aim of bolstering American manufacturing of semiconductors, pharmaceuticals and other cutting-edge technologies.In remarks at the White House, the president cast the move as an important step toward creating well-paying jobs and making the economy more resilient in the face of geopolitical threats, pandemics and climate change.“This is about making sure the United States can meet every challenge we face in the new era,” he said.But the effort, which has bipartisan support, will do little to immediately resolve global shortages, including in semiconductors — a key component in cars and electronic devices. A lack of those components has forced several major American auto plants to close or scale back production and sent the administration scrambling to appeal to allies like Taiwan for emergency supplies.Administration officials said the order would not offer a quick fix but would start an effort to insulate the American economy from future shortages of critical imported components.Mr. Biden discussed the issue in the Oval Office on Wednesday afternoon with nearly a dozen Republican and Democratic members of Congress. Senator Chuck Schumer, Democrat of New York and the majority leader, called for the crafting and passage of a bill this spring to address supply chain vulnerabilities.“Right now, semiconductor manufacturing is a dangerous weak spot in our economy and in our national security,” Mr. Schumer said. “Our auto industry is facing significant chip shortages. This is a technology the United States created; we ought to be leading the world in it. The same goes for building-out of 5G, the next generation telecommunications network. There is bipartisan interest on both these issues.”Republicans emerged from the White House meeting optimistic that such efforts could soon move forward. Representative Michael McCaul, Republican of Texas, said he was pleased to see that the White House made the issue a top priority and that the president was receptive. “His words were, ‘Look, I’m all in,’” he said.Mr. McCaul said that much of the conversation revolved around legislation that Congress had passed last year to incentivize the chips industry — but which still needs funding for research grants and a refundable investment tax credit — as well as the current chips shortage and possible looming job losses in the auto industry.“China is looking at investing $1 trillion in their digital economy,” Mr. McCaul said. “If we’re going to be competitive, we have to incentivize these companies to manufacture these advanced chips in the United States.”Mr. Biden called the meeting one of the best of his presidency so far. “It was like the old days,” he said. “People were actually on the same page.”A global semiconductor shortage has led to production delays for American automakers.Credit…Mohamed Sadek for The New York TimesThe president ordered yearlong reviews of six sectors and a 100-day review of four classes of products where American manufacturers rely on imports: semiconductors, high-capacity batteries, pharmaceuticals and their active ingredients, and critical minerals and strategic materials, like rare earths.The Coronavirus Outbreak More

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    Biden and China: Administration Rethinks Relations

    #masthead-section-label, #masthead-bar-one { display: none }The Presidential InaugurationHighlightsPhotos From the DayBiden’s SpeechWho Attended?Biden’s Long RoadAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden on ‘Short Leash’ as Administration Rethinks China RelationsThe Biden administration is under intense pressure to maintain former President Donald J. Trump’s curbs on China, even as it tries to develop a more comprehensive and effective strategy.President Biden faces an enormous challenge in trying to formulate a strategy to deal with China at a time when much of Washington treats any relations with Beijing as toxic.Credit…Doug Mills/The New York TimesFeb. 17, 2021, 2:22 p.m. ETWASHINGTON — Biden administration officials have tried to project a tough line on China in their first weeks in office, depicting the authoritarian government as an economic and security challenge to the United States that requires a far more strategic and calculated approach than that of the Trump administration.They have also tried to send a message: While the administration will be staffed by many familiar faces from the Obama administration, China policy will not revert to what it was a decade ago.These early efforts have not concealed the enormous challenge President Biden faces in trying to formulate a strategy to deal with China at a time when any relations with Beijing are treated as thoroughly toxic in Washington. Political adversaries, including Republican lawmakers, have already begun scrutinizing the statements of Mr. Biden’s advisers, ready to pounce on any effort to roll back President Donald J. Trump’s punishments, including tariffs and bans on exporting technology.Ted Cruz, the Republican senator from Texas, has placed a hold on the confirmation of Gina Raimondo, Mr. Biden’s nominee for commerce secretary, delaying a vote on her confirmation, for declining to explicitly commit to keeping the Chinese telecom company Huawei on a national security blacklist. Some Republican lawmakers have also criticized Linda Thomas-Greenfield, Mr. Biden’s pick for U.N. ambassador, for giving a speech at a Confucius Institute, an organization some have described as disseminating Chinese propaganda, and painting a rosy picture of China’s activities in Africa.Several Republicans, including Senator Charles E. Grassley of Iowa, also put out statements last week criticizing a move by the Biden administration to withdraw a rule proposed during the Trump administration that would require universities to disclose their financial ties to Confucius Institutes, organizations set up to teach Chinese language and culture in American schools.“The Biden administration is going to be on a very short leash with respect to doing anything that is perceived as giving China a break,” said Wendy Cutler, a vice president at the Asia Society Policy Institute and a former U.S. trade negotiator.Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China, including dusting off many rarely used policy tools. That includes placing major tariffs on Chinese goods, limiting Beijing’s access to sensitive American technology exports, imposing sanctions on Chinese officials and companies over human rights violations and securing economic concessions from China as part of a trade deal.But Mr. Trump’s critics, including many in the Biden administration, say his spate of executive orders and other actions were inconsistent and piecemeal, and often more symbolic than effective.Even as Mr. Trump issued harsh punishments on some fronts, he also extended a lifeline to the Chinese telecom company ZTE, delayed sanctions related to human rights violations in China’s Xinjiang region and publicly flattered President Xi Jinping of China as he sought his trade deal. Many of the executive actions Mr. Trump took against China were left incomplete, or were riddled with loopholes.And his policies may have worsened American competitiveness in some areas, according to a report published Wednesday by the consulting firm Rhodium Group and the U.S. Chamber of Commerce China Center. The report found steep costs from the kind of economic “decoupling” that Mr. Trump pursued, including a $190 billion annual loss in American economic output by 2025 if all U.S.-China trade was subject to the type of 25 percent tariff that Mr. Trump imposed on $250 billion of Chinese goods.Daniel Rosen, a founding partner at Rhodium Group, said the Biden administration needed to consider more than politics or ideology when forging China policy, including carefully weighing the cost of its approach to industry.“Obviously politics is king right here in this moment, with nobody in leadership or aspiring to leadership wanting to get outflanked on who is tough on China,” he said. “We’re not going to serve the American interests if we don’t consider commercial interests and national security interests at the same time.”The Biden administration has argued that by being more strategic in how it addresses China, it will ultimately be more effective than the Trump administration. It has laid out an ambitious task as it looks to not only crack down on China for what it sees as unfair trade practices but also develop a national strategy that helps build up America’s economic position to better counter Chinese competition.Speaking at the Atlantic Council in late January, Jake Sullivan, the national security adviser, said the United States first needed to “refurbish the fundamental foundations of our democracy” by dealing with issues like economic and racial inequity, as well as making investments in emerging technologies like artificial intelligence, quantum computing and clean energy.Mr. Biden has also emphasized the importance of working with allies and international institutions to impose a tougher global stance, so companies do not sidestep strict American rules by taking their operations offshore.Mr. Biden held his first call with Mr. Xi on Feb. 10, in which he talked about preserving a free and open Indo-Pacific and shared concerns about Beijing’s economic and human rights practices, according to a White House readout.In a town hall-style forum broadcast by CNN on Tuesday night, Mr. Biden, who knows Mr. Xi well from meetings during the Obama administration, said he had taken a tough line on human rights and other issues during their two-hour call.“There will be repercussions for China, and he knows that,” Mr. Biden said. “What I’m doing is making clear that we, in fact, are going to continue to reassert our role as spokespersons for human rights at the U.N. and other — other agencies that have an impact on their attitude.”Mr. Biden has begun staffing his cabinet with officials who have deep experience with China. Katherine Tai, the Biden administration’s nominee for trade representative, was in charge of litigating cases against China at the World Trade Organization during the Obama administration, and has promised to take a tough line on enforcing American trade rules.President Donald J. Trump criticizing the government of China in May at the White House. Mr. Trump’s supporters credit him with taking a far more aggressive approach than his predecessors to policing China.Credit…Erin Schaff/The New York TimesMr. Biden’s top foreign policy advisers have also espoused views critical of China’s practices, though many see potential for cooperation on issues like the coronavirus pandemic and climate change. That includes Secretary of State Antony J. Blinken, Mr. Sullivan and Kurt Campbell, the National Security Council’s “Asia czar.”Ms. Raimondo, the commerce secretary nominee, will also have purview over economic relations with China, particularly those related to technology. While she had harsh words for China during her confirmation hearing, her refusal to commit to keeping Huawei on a government blacklist drew criticism from Republican lawmakers like Mr. Cruz.Treasury Secretary Janet L. Yellen, who is expected to play a pivotal role in relations with China, took a hawkish tone at her confirmation hearing last month, vowing to use the “full array” of America’s tools to combat “illegal, unfair and abusive” practices. She has also criticized China’s practices of stealing intellectual property and subsidizing state-owned enterprises, but said she did not regard Mr. Trump’s tariffs as “the proper focus” of trade policy.The new administration has given few concrete details about how it will put its strategy into practice, including whether it will implement the many China-related executive orders Mr. Trump introduced, like new restrictions on investments in Chinese companies with ties to the military and bans on Chinese-owned apps, like TikTok, WeChat and Alipay. Instead, the administration has said it would carry out a comprehensive review of Mr. Trump’s tariffs, export controls and other restrictions before making decisions.Another uncertainty is how Mr. Biden and his team will handle Mr. Trump’s initial trade deal with China given that Beijing continues to fall short of its promise to buy hundreds of billions of dollars in American products. The administration may face the choice of using the deal’s enforcement mechanisms — which include consultations and more tariffs for Chinese products — or scrapping the agreement altogether.Scott Kennedy, a senior adviser in Chinese business and economics at the Center for Strategic and International Studies, said the Biden administration had clear foreign policy goals and a large toolbox of measures at its disposal, but had not yet “figured out how to merge strategy and tactics.”On American competitiveness with China, “there’s a much larger conversation that needs to be had,” Mr. Kennedy said. “Are they going to be willing to engage in that conversation and do that thorough analysis and come up with something new? Or are they going to be fearful of political backlash and pull their punches?”Mr. Biden’s plan to engage more closely with U.S. allies to put pressure on China may also be easier said than done.In an interview in January, shortly before he left office, Robert Lighthizer, Mr. Trump’s top trade official, pointed to a recent investment agreement the European Union signed with China, against the wishes of the Biden administration, as “the first piece of evidence” that such multilateral cooperation would be difficult.Chinese officials are already strengthening ties with U.S. allies like New Zealand and South Korea in an effort “to divide and conquer,” Ms. Cutler said.China has emerged from the early stages of the pandemic emboldened, with its factories and businesses outpacing those in the United States and Europe, where the coronavirus continues to hamper the economy. While Chinese leaders are seeking to reset relations with Washington after a tumultuous period under Mr. Trump, they have continued to make sometimes hard-edge statements.In an interview with CBS News on Feb. 7, Mr. Biden said the two countries “need not have a conflict. But there’s going to be extreme competition.”“I’m not going to do it the way Trump did,” Mr. Biden added. “We’re going to focus on international rules of the road.”Alan Rappeport More