WASHINGTON — In addition to a deadly pandemic and a weakened economy, President-elect Joseph R. Biden Jr. will inherit one more challenge when he takes office in January: a toxic relationship with the world’s second-largest economy.
President Trump has placed tariffs on hundreds of billions of dollars of products from China, imposed sanctions on Chinese companies and restricted Chinese businesses from buying American technology — a multiyear onslaught aimed at forcing Beijing to change its trade practices and as punishment for its authoritarian ways. He shows no sign of letting up in his final days in office: On Thursday, Mr. Trump issued an executive order barring investments in Chinese firms with military ties.
The hard choices for Mr. Biden will include deciding whether to maintain tariffs on about $360 billion worth of Chinese imports, which have raised costs for American businesses and consumers, or whether to relax those levies in exchange for concessions on economic issues or other fronts, like climate change.
Mr. Biden will need to walk a careful line. He and his advisers view many of Mr. Trump’s measures, which were aimed at severing ties between the Chinese and American economies, as clumsy, costly and unstrategic. They say they want to take a smarter approach that combines working with the Chinese on some issues like global warming and the pandemic, while competing with them on technological leadership and confronting them on other issues like military expansionism, human rights violations or unfair trade.
In a speech on Monday, Mr. Biden promised to make significant investments into American industry, including $300 billion in technology industries that he said would create three million “good-paying” jobs, as well as channeling more government dollars into purchasing American products like automobiles and pharmaceuticals.
“We’re going to invest in American workers and make them more competitive,” Mr. Biden said. He added that he would ensure that labor unions and environment groups were “at the table” in any trade negotiations and push for the United States, rather than China, to set the world’s trading rules, along with other democracies.
“The idea that we are poking our finger in the eyes of our friends and embracing autocrats makes no sense to me,” Mr. Biden said.
Even if Mr. Biden departs from Mr. Trump’s punishing approach, his administration will be eager to maintain leverage over China to accomplish its own policy goals. And the new administration will face pressure from lawmakers in both parties who view China as a national security threat and have introduced legislation aimed at penalizing Beijing for its human rights abuses, global influence operations and economic practices.
“This is likely going to be a period of continuing uncertainty on the U.S.-China front,” said Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce. “There is no question that President Trump has adopted a tough stance on China, and this probably doesn’t give President-elect Biden a lot of political flexibility early on, but we expect a significant departure in tone, style and process.”
Mr. Biden has given few details about his plans for U.S.-China relations, other than saying he wants to recruit American allies such as Europe and Japan to pressure China to make economic reforms, like protecting intellectual property. He has pledged to devote more resources to enhancing American manufacturing capacity, infrastructure and technological development, to ensure the United States retains an edge over China even as it invests huge sums in fields like telecommunications, artificial intelligence and semiconductors.
But Mr. Biden will face pressure from both parties not to revert to the approach that he and many of his predecessors had earlier embraced in trying to transform China’s economic practices by bringing it into the global economy.
Like many Democrats and Republicans in the 1990s and early 2000s, Mr. Biden argued that integrating China into the global trading system would force Beijing to play by international rules, to the benefit of American workers. In 2000, he voted to grant China permanent normal trading relations, which paved the way for China’s entry into the World Trade Organization and deeper global economic ties.
In 2016, Mr. Trump won the presidency in part by loudly rejecting that approach, arguing that the United States needed to isolate, not integrate, Beijing.
Two decades later, Mr. Biden acknowledges that China exploited the international system, and he has called for a more aggressive approach. Mr. Biden has said the United States must get “tough with China,” and referred to Xi Jinping, the Chinese leader, as a “thug.”
Congress is also relatively unified on taking a tough stance on China. Hundreds of China-related bills are circulating, including several bipartisan efforts that echo Mr. Biden’s emphasis on competing with China by investing in American industries like quantum computing and artificial intelligence.
Mr. Biden’s first moves could also be dictated by Mr. Trump’s final months. Many trade experts say they are concerned that Mr. Trump, who has promised to make China “pay” for not doing enough to contain the coronavirus, could amp up his economic fight. Several of Mr. Trump’s aides are bitter at China for its role as the source of the coronavirus, which they see as a major contributor to Mr. Trump’s loss, people familiar with their thinking say.
One area of focus is the trade deal that Mr. Trump signed with Chinese officials in January. While China has largely kept commitments to open up its markets to American companies and Mr. Trump’s advisers have continued to defend the pact, Beijing has fallen far behind schedule in its promise to buy an additional $200 billion of goods and services by the end of next year.
Mr. Trump’s most likely path will be to leave the deal intact, said Chris Rogers, a global trade and logistics analyst at Panjiva. But he wouldn’t rule out “a scorched-earth policy where China is declared to be in violation of its Phase 1 trade deal commitments and there’s a return to tariff escalation,” he said.
“President-elect Biden will be left holding the pieces if the deal is broken,” Mr. Rogers added.
And the president shows no signs of backing off a confrontational approach in other areas. On Friday, his administration is expected to begin economic talks with Taiwan that are likely to rankle Beijing. His advisers are considering other measures to punish China in the coming weeks, including sanctions related to China’s security crackdowns in Hong Kong and the Xinjiang region, where the Chinese government has carried out mass detentions and harsh policing of ethnic minorities.
“We are worried that he’s going to do some rash things that aren’t going to make sense for the future of the country or global stability,” said Rufus Yerxa, the president of the National Foreign Trade Council, which represents major multinational companies. “Given the history of President Trump’s use of executive authority, we’re taking nothing for granted in these next few months.”
Still, “most of what he could do is through executive orders and executive actions, which can be reversed by a Biden administration,” Mr. Yerxa added.
Whether Mr. Biden opts to roll back Mr. Trump’s more punitive measures will depend, at least in part, on China’s future behavior, including whether it pursues more aggressive incursions into the South China Sea, Taiwan and Hong Kong, people close to his campaign say.
Beijing has recently endorsed a policy of greater technological self-reliance and a stronger military to protect itself from a more antagonistic United States, and moved ahead with cementing other economic partnerships. On Sunday, China signed the Regional Comprehensive Economic Partnership, a pan-Asian trade pact that includes Japan, South Korea, Australia, New Zealand, Thailand and Vietnam, and will help cement China’s image as the dominant economic power in the region.
In his remarks Monday, Mr. Biden argued for America to regain leadership in the trade sphere.
“We make up 25 percent of the world’s trading capacity of the economy in the world,” he said. “We need to be aligned with the other democracies, another 25 percent or more, so that we can set the rules of the road instead of having China and others dictate outcomes because they are the only game in town.”
Mr. Biden’s appointments for trade and foreign policy posts could help determine his approach toward China, though it remains unclear whom he might nominate for such critical jobs as secretary of state and commerce and the United States trade representative.
Similar to Mr. Biden himself, many of his closest advisers have a moderate track record on trade and China, believing they can work with Chinese leaders on some issues even as they challenge them on others. But several of his national security advisers are more skeptical of China.
No matter the path, business groups, economists and others are hoping for a coherent strategy that does not result in the type of economic brinkmanship Mr. Trump appeared to thrive on.
While Democrats and Republicans have credited Mr. Trump with drawing attention to China’s security threats, and its unfair economic practices like intellectual property theft, his dealings with China have also been transactional and inconsistent. In an attempt to secure a trade deal, Mr. Trump lavished praise on Mr. Xi, delayed sanctions against China’s human rights violations for months and pardoned the Chinese company ZTE for running afoul of U.S. law. And he has employed racist and xenophobic language, like calling the coronavirus the “kung flu,” that has fueled attacks on people of Asian descent around the country.
“The Trump administration never did lay out a coherent, comprehensive, engaged trade strategy,” said Thea M. Lee, an economist and the president of the Economic Policy Institute. “It was much more scattershot: Throw up a tariff here, do a deal with China, disparate elements that didn’t seem to talk to each other.”
“But there are a lot of tools in that toolbox, and I would like to see the Biden administration be thoughtful and strategic about how to use them,” Ms. Lee said.