Illustration: Chen Xia/Global Times
With just six months to go before the US midterm elections in November, the Biden administration’s poor handling of the US economy and a number of international crises has become a political albatross for Democrats, who worry about losing their majorities in both houses of Congress and Biden. become a lame duck president in his first two years.
Recent opinion polls show the numbers are worrying for Biden and Democrats. Over the past 16 months, the administration has been indulging in concocting narratives that fit only its own needs or beliefs, but they are patently detached from the facts.
Much to the chagrin of many in the United States and around the world, the administration’s narratives are simply based on illusions and very often border on a lie. Increasingly, American voters feel duped and cheated, which is part of why Biden’s approval ratings have plummeted to around 40%.
When President Biden asked fellow Democrats in the Senate and House of Representatives to pass his controversial $1.9 trillion fiscal stimulus package in early 2021, a number of leading economists, including the ex-Treasury Secretary and Harvard professor Lawrence Summers, sent out blunt warnings about inflation. to the White House. But dissenting voices from Summers and others against Biden’s extravagant stimulus spending have been dismissed, heckled and even ridiculed.
When US inflation accelerated in July and August, the world heard Biden’s tale: don’t worry about the economy, and US inflation is only “transitional.”
Inflation is now the number one kitchen table topic across the country after hitting heights not seen in more than four decades, with the Biden administration rapidly spinning a new narrative, blaming Russia and President Putin for the price boom. Last week, the US stock market crashed after the Federal Reserve hiked interest rates 50 basis points to contain inflation. Will Biden continue to blame the stock market rout and inflation on Russia and Putin? Let’s wait and see.
Anyone with a basic knowledge of economics would know that it was the madness of the US government and the mismanagement of the economy by Biden’s team that caused the current difficulties facing Americans. With interest rates forced to hike to curb soaring inflation, the US economy is now on edge and is set to experience a hard landing in the coming months. It is not yet known whether the country could avoid another fierce financial tremor like the global financial crisis of 2008-09.
The International Monetary Fund (IMF) has warned that the global economy could grow by just 3.6% this year due to various headwinds, and the Chinese Foreign Ministry has called on the US government to set aside its Cold War mindset and end its zero-sum games with the world’s major economies, in order to propel global cooperation and economic recovery.
However, China’s persistent focus and call for a win-win economic engagement between the world’s two largest economies fell on deaf ears within the Biden administration. It is well known that Donald Trump’s massive trade and technology war with China has significantly damaged the US economy, while seriously disrupting and derailing the global supply chain.
From the start, Chinese economists warned that the tariffs and technology blockages imposed by Washington on China would inevitably lead to high consumer prices and inflation in the United States, reducing the standard of living for tens of thousands. of Americans.
But so far, the Biden administration has left most tariffs untouched, while tightening tech sanctions against a host of Chinese companies, such as Huawei, SMIC and Hikvision. As a result, Americans have seen commodity prices in their supermarkets continue to rise.
Both Trump and Biden officials have said that punitive tariffs on Chinese imports and restrictions on technology supplies to Chinese companies were necessary to counter China’s “bad human rights and human rights practices.” the theft of U.S. intellectual property rights, as well as pivoting to the bilateral trade balance.” This narrative, repeated hundreds of times, seems easily acceptable to many American voters.
However, the real intention of the US government is to suppress China’s economic competitiveness and contain China’s rise, even though most US officials know full well that a trade and technology confrontation will lead to higher inflation. and a decline in economic growth in the United States.
Last week, an episode widely reported by the American media implicitly revealed the intentions of the Biden administration.
As the United States begins a review of tariffs imposed on $360 billion in Chinese goods, some policymakers, like Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo, are calling for the elimination of tariffs to provide relief to consumers Americans facing inflation, Katherine Tai, the trade representative, said she was worried about “giving up leverage” to China. “But the tariffs increase our domestic prices,” Yellen said.
Average tariffs on Chinese goods are now 19.3%, according to the Peterson Institute for International Economics (PIIE), and cover more than two-thirds of all goods the United States buys from China. PIIE estimated that a trade liberalization policy equivalent to a 2 percentage point reduction in tariffs could reduce US inflation by 1.3 percentage points.
The tariff and technology barriers established by the United States are a clear form of self-harm, but the Biden administration’s so-called China hawks are reluctant to give up influence to counter China, even as ordinary American households in pay the cost.
In short, it’s time for the hawks in the Biden administration to think carefully about tariffs on US inflation and stop concocting false narratives or engaging in misinformation to mislead US voters, or the world will continue to watch United States playing with fire to the detriment of the global economy.
The author is an editor at the Global Times. [email protected]