The Struggle of Hegemony: The Future of the U.S.-China Relationship

By: Ruhi Ramesh and Emily Lieberman

When President Joe Biden took office in January, the United States’ global reputation and global partnerships were falling into disarray. The Trump administration aggravated tensions with numerous countries around the world — both allies and adversaries. But, in particular, the relationship between the U.S. and China suffered greatly, with the economic, trade, and diplomatic relations turning sour and geopolitical tensions increasing.

Biden’s leadership in the White House comes at a pivotal time for the world. When COVID-19 continues to ravage the world; and the development of competing vaccines, the creation of vaccine passports and the race to distribute them to countries in need are fueling U.S.-China tensions. Foreign policy leadership under the new administration undoubtedly has a different outlook on foreign affairs than the previous administration — with engagement, global cooperation and multilateralism at the forefront of decision making. 

The relationship between China and the United States is a nuanced one; the two countries are both rivals and partners in different sectors. And the integrated and globalized economy means that the decisions of one great power undoubtedly impact the fate of the other — and vice versa. This article will provide a brief overview of what those main issue areas are, and how the Biden administration is expected to approach each area in light of U.S.-China relations. 

Navigating Trade and the Global Economy

An increasingly confrontational relationship between the United States and China continues to test global diplomacy and international trade, as the two countries struggle for economic and political power. 

In 2016, former President Donald Trump accused China of being one of the primary reasons for losses in U.S. manufacturing jobs, igniting a complex U.S.-China trade war. In 2018, the United States imposed tariffs on more than $360 billion worth of Chinese goods, causing China to retaliate by imposing tariffs on U.S. products. As tensions grew, the January 2020 $200 billion trade deal between China and the United States failed to solve economic hardship stemming from the multi-year trade war. 

But this tension is built on complex cooperation. China is the United States’ largest supplier of imported goods. Trump’s tariffs policy encouraged U.S. consumers to buy national products, making imported goods rise in prices. This strained the U.S.-China relationship, increasing tensions and making international trade more expensive. 

And currently, large disruptions in global trade resulting from the COVID-19 pandemic has provoked executive action in an attempt to reduce U.S. dependence on internationally sourced materials. On February 24, Biden signed a new Executive Order on U.S. a supply chain, requiring his administration to review supply chains and bolster American manufacturing output, beginning long-term efforts to insulate the U.S. economy from future shortages of critical manufacturing goods. The order calls for a yearlong review of six sectors and a 100-day review of four critical manufactured imports: high-capacity batteries, pharmaceuticals, semiconductors, and critical minerals. Early on in the pandemic, China diverted protective equipment against COVID-19 to local hospitals and proposed bans on critical minerals, leaving international buyers, including the United States, empty handed. Biden’s new executive order began an important step for creating jobs and making the U.S. economy more resilient in the face of ever growing global threats.

On March 1, the Biden administration released the 2021 Trade Policy Agenda and 2020 Annual Report. The document specifies that the United States will use “all available tools” to address “China’s unfair trade practices that continue to harm U.S. workers and businesses.” The report  reinforces statements previously by the Biden administration in their strategy towards China on trade policy. 

“Addressing the China challenge will require a comprehensive strategy and more systematic approach than the piecemeal approach of the recent past,” the report read. 

Furthermore, the report outlines that it will be a top priority of the Biden administration to work with allies to ensure China fulfills its trade obligations. Although this report does not outline specific steps for trade policy moving forward, it solidifies Biden’s trade stance with China. 

Trump’s U.S.-China trade relationship left the Biden administration with several other economic complications. A December 2020 report from the Center for Economics and Business Research (CEBR) in the United Kingdom indicates that early lockdowns and stability from the COVID-19 pandemic has tipped economic recovery in China’s favor. The report predicts that after a strong economic recovery in 2021, the U.S. economy will grow about 1.9% annually from 2022-2024, and slow to 1.6% in the following years. By contrast, China’s economy is expected to grow 5.7% annually through 2025. 

Although China was the first country hit by COVID-19, aggressive action prevented the country from being affected by the same economic hardship as many others. By contrast, the U.S. economy has been hit hard by COVID-19, as the nation struggles to recover from over 30 million cumulative cases nationwide. The national economic damage has been cushioned by fiscal stimulus, but disagreements and prolonged passage of the $900 billion Consolidated Appropriations Act left millions of Americans struggling into the new year. 

On January 20, the Biden administration announced the American Rescue Plan, which intends to provide immediate economic relief to communities struggling from the effects of COVID-19, send grants and funding to struggling businesses, and assist state and local economies. Signed March 11, this plan will bolster U.S. economic growth and send much-needed relief to Americans and their families. This bill, combined with the American Jobs Plan — which aims to create millions of jobs to rebuild U.S. infrastructure and “position the United States to out-compete China” — will serve as major steps towards repairing the U.S. economy. 

As the United States recovers from the COVID-19 pandemic and begins to determine its trade policies with China moving forward, it will continue to test and enforce trade relations with China. 

The Growing Challenge of Cyber Security

In May 2020, the Trump administration attempted to block American telecommunications firms from installing foreign made equipment that could pose a threat to national security. This included an attempt to restrict the sales of Huawei computer chips within the United States and restrict Huawei from building its 5G wireless networks for fear of global spying. 

Further, hacking concerns in May 2020 caused the Federal Bureau of Investigation (FBI) and the Cybersecurity and Infrastructure Security Agency (CISA) to issue warnings of an imminent threat to U.S. based healthcare, pharmaceutical and research sectors working on COVID-19 response. However, this strategy failed to dissuade further cybertheft. 

In July 2020, the FBI and the U.S. Department of Justice issued charges to Chinese hackers after an attempt to gain intelligence on U.S. intellectual property, including COVID-19 research. In September 2020, the Center for Strategic and International Studies revealed that Chinese hackers had been monitoring U.S. government and private networks for over a year in search of vulnerabilities. 

Following incidents of intellectual theft from U.S.-based companies and despite U.S. efforts to prevent major companies such as Huawei from dominating the field of telecommunications, China continues to grow as a limitless threat in the cybersphere. The United States’ vulnerability to China’s international cyber reach leaves the Biden administration with several immediate online threats to combat and weaknesses to secure. 

The Trump administration challenged China’s technology industry through sanctions and executive orders. Early actions from the Biden administration indicate Biden will maintain a similar approach. 

In the 2021 Virtual Munich Security Conference, Biden said that “we must shape the rules that will govern the advance of technology and the norms of behavior in cyberspace, artificial intelligence, biotechnology so that they are used to lift people up, not used to pin them down.” Statements like this display the administration’s tough stance on proliferating technology concerns. 

Biden may potentially continue the Trump administration’s efforts to exclude Chinese companies from next-generation 5G mobile networks. Trump’s executive order gives the U.S. government the power to block technology transactions that pose “an unacceptable risk to the national security of the United States.” 

Only time will tell what the Biden administration will do to tackle cyber security on a global scale. However, one thing is certain: the conversation of technology, global security, and cyber dominance will continue under the Biden administration. 

Emerging Technology and Media Concerns

The technology standoff between the U.S. and Chinese administrations was one item in the laundry list of tensions between the two countries that dominated headlines over the past year. As a staunch proponent of American superiority, Trump seemed determined to undercut any sort of relationship with China that was perceived as a security threat. In February 2020, officials discussed placing restrictions on export licenses of goods from American companies in order to restrict sales to China and reduce their technological advantage. 

American technology companies voiced strong concerns and opposition to any sort of embargo. They insisted that these restrictions would actually undercut American business abroad, as many foreign and American companies were locked into symbiotic business relationships. While these specific restrictions were never enacted, the threat of implementation was enough for some foreign companies to begin cutting ties with American tech corporations. In particular, the semiconductor industry was among one of the most affected industries as the Trump administration placed strict limitations on sales of sensitive microchip technologies to China in January 2020. 

The U.S.-China technology war goes beyond the trade of technological raw materials. In September 2020, as the Chinese app TikTok gained massive global traction, Trump signed an executive order that demanded Bytedance, the app’s parent company, to sell TikTok’s American operations to a U.S.-based company. Trump also banned WeChat, the popular Chinese messaging and communications app, from app stores on Android and iOS platforms. These restrictions were the culmination of U.S. suspicions regarding how these apps utilized personal user information; many in the administration believed the apps were delivering sensitive information directly to Chinese intelligence. As the Trump administration exited the White House, the New York Stock Exchange was ordered to delist the stocks of three Chinese telecommunications companies.

Many believe that the strict hardline stance against Chinese technologies will continue under the Biden administration. The U.S. continues to state that Chinese technologies pose an economic and national security threat to American interests. While many American companies attempted to block such acts from being implemented, the Biden administration is reportedly allowing a Trump-era sanction against Chinese technologies to come into effect later this year. This rule would allow the U.S. Department of Commerce to unilaterally ban any Chinese technologies that it perceives as a threat to national security, paving the way for a great deal of uncertainty among CEOs of American technology giants. However, the Biden administration has taken a step back from Trump’s bans on WeChat and TikTok, allowing the Commerce Department to review these sanctions and determine whether they are necessary. 

Looking Forward

China poses one of the largest long-term threats to U.S. national security. As a growing global influence, China will continue to shape the international sphere through free speech and censorship methods, economic trade policies, and cyber domination.

Tensions regarding trade tariffs and economic recovery will continue as the globe recovers from the COVID-19 pandemic. As China and the United States recover from economic hardship, both countries may aim to improve trade relations. However, this seems increasingly unlikely, as recently passed U.S. legislation aims to outcompete Chinese manufacturing and economic prosperity. 

Cyber security and growing concerns over censorship will continue throughout 2021. Following cases of lapses in cyber security, the U.S. will need to bolster its stability in the cybersphere. The U.S.-China technology war will likely continue under the Biden administration — as the U.S. looks to secure its position as a global hegemonic power. Over the course of the trade war with China, the U.S. administration seeks to also become less reliant on Chinese manufacturing and more self-sufficient. 

Another point of contention that gained international traction last year is the treatment of the Muslim Uighur population in China. The issue attracted massive media coverage when reports of camps filled with Uighurs in the north-western Xinjiang region of China were leaked to international media. While the Chinese government was openly criticized for its actions, President Trump supposedly voiced approval of the treatment — news that became public following the release of former National Security Advisor John Bolton’s memoir. President Trump also delayed sanctions against China’s treatment of the Uighurs in order to facilitate a trade deal. Shortly before leaving the White House, the Trump administration changed course and publicly denounced the treatment of the Uighurs. The Biden campaign was vehemently opposed to the issue but it remains to be seen whether the administration will pursue a more hardline stance against this particular humanitarian issue.

The U.S.-China relationship will continue to evolve over the next four years under the Biden administration. As tensions continue to rise, only time will tell if the United States and China will be able to resolve hegemonic conflicts and improve diplomatic relations.