The Biden administration, represented by US Ambassador Nicholas Burns, is taking measures to avert a ‘second China shock’ by imposing tariffs on Chinese goods, particularly in the EV industry. Burns emphasized the need for international cooperation to address China’s overproduction and hinted at possible sanctions against Chinese entities supplying goods to Russia. He highlighted a historical precedent where reliance on Chinese imports resulted in significant job losses in the U.S.
The Biden administration asserts its resolve to prevent a second wave of economic upheaval from China, known as the ‘second China shock,’ according to Nicholas Burns, the US ambassador to China. In a virtual address during the Transatlantic Forum on GeoEconomics held by the Atlantic Council, Ambassador Burns described the United States’ strategy of imposing tariffs on imports to mitigate the impact of China’s increasing influence, particularly in the electric vehicle (EV) sector and other industries. He emphasized the necessity for a collaborative international approach, urging European allies to join forces in addressing the oversupply issues caused by China. Additionally, Ambassador Burns issued a warning that further sanctions may be implemented against Chinese entities if China continues to supply dual-use goods that could bolster Russia’s military efforts in the ongoing conflict in Ukraine. He reflected on previous lessons learned from the pandemic, stating, “I think that all of us around the world, in every single country, learned from the pandemic, don’t be reliant on a single source for critical materials.”
The term ‘second China shock’ refers to the potential for significant disruptions to global markets and economies that could arise from increased Chinese exports, particularly in the wake of the challenges posed by the COVID-19 pandemic and geopolitical tensions. The prior ‘China shock’ in the 2000s saw vast increases in Chinese imports to the US, resulting in substantial job losses in American manufacturing sectors. This historical context illuminates the concerns expressed by US officials, who are wary of becoming overly reliant on one nation for critical goods, especially as they highlight the importance of securing supply chains amid rising geopolitical tensions related to China and its support for Russia.
In conclusion, the Biden administration, represented by Ambassador Nicholas Burns, is actively working to prevent a resurgence of economic disruptions stemming from China’s growth. By imposing tariffs and potentially extending sanctions against Chinese companies, the U.S. aims to counteract the effects of overcapacity in Chinese industries while fostering a united front with international allies to uphold economic stability and safeguard national security against the backdrop of China’s relations with Russia.
Original Source: www.scmp.com
