Yahoo Finance Why Biden’s Commerce chief is wary of expanding the economic clash with China: 'Jobs'
Will the U.S. take more economic actions targeting the People's Republic of China beyond current limited measures?
Commerce Secretary Gina Raimondo oversees U.S. export control efforts towards China. She was succinct this week when asked if those measures would be expanded anytime soon. “I don't see that,” she said during a Yahoo Finance Live interview on Monday. (Video above)
Unlike the approach to Russia, America's export control measures aimed at China are tailored specifically to semiconductors and China’s military capabilities—as opposed to its larger economy. On another front, Trump-era tariffs remain in place and high by historical standard, but have been largely untouched in the two years since President Biden took office.
In a nod to the costs that would come from expanding the economic confrontation between the two superpowers, Biden’s commerce chief added “The United States does a great deal of trade with China. We should continue to do that. It supports a lot of American jobs, and so we don't want to reduce that, but we do want to be really focused on the technology that we need to be focused on.”
Raimondo’s export control focus remains semiconductor focused. She wants to protect and develop the valuable technology—and this week's conversation came on top of a long-awaited announcement from her department Tuesday. Specifically: what semiconductor companies will need to provide to get money from President Biden's CHIPs and Science act.
If needed, 'we will take action'
But the big he question is this: will economic status quo hold, especially if China decides to take a more provocative role in Russia’s war in the Ukraine—or potentially in Taiwan?
In recent days, reports that China is considering providing Russia with weapons for use in their war with Ukraine have raised fears that tensions with the U.S. could reach new heights. National Security Adviser Jake Sullivan reiterated this weekend in a CNN interview that there would be “real costs” for China if it takes that step.
Raimondo says for now export controls will remain narrowly designed to keep U.S. chip technology away from the Chinese military. “We know they're trying to get our technology to advance their military capability and every time we get information about that happening, we will take action with our export controls,” she said.
Export controls are measures that Washington can impose on companies to limit the movement of certain goods and technologies overseas. Valuable semiconductors designs are a key item that the U.S. tries to control — often in concert with allies like Taiwan and South Korea.
On the tariffs question, Raimondo said that a review from Amb. Katherine Tai, the United States Trade Representative, remains underway; once the results are in “the President will decide what, if any, action he wants to take.”
'They would be destroying their own critical economic interests'
China may also have economic concerns top of mind as is considers whether to increase tensions. During a recent Yahoo Finance live interview, Eurasia Group President Ian Bremmer suggested that they could be paramount for China for now, at least when it comes to Taiwan.
Bremmer said that if China knows they would also put a crucial supply of semiconductors in jeopardy if they intervene militarily. “I think the likelihood that the Chinese would invade Taiwan in the near future, two, three years is virtually zero because they understand that they would be destroying their own critical economic interests,” Bremmer said.
Biden also recently addressed the issue and suggested that global corporations would also be a factor in China’s decision-making. The president says he recently reminded Chinese President Xi Jinping that “600 corporations pulled out” of Russia last year following the invasion and a similar fate could befall China if it allies itself strongly with Vladimir Putin.
“I’d just keep an eye on that,” the President added.
Ben Werschkul is Washington correspondent for Yahoo Finance.
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