Last week U.S. Treasury Secretary Janet Yellen in a speech said the United States wasn’t seeking a “winner take all” competition with Communist China. This week, another high-ranking Biden administration official backed that sentiment up. “Our objective is not autarky,” said national Security Advisor Jake Sullivan, busting out the thesaurus in his own speech Thursday at a Washington, DC think tank. “It’s resilience and security in our supply chains.”
Sullivan’s remarks were ostensibly about the administration’s wider international economic agenda, and he did lay out the White House’s reasoning for heavy domestic investment …
“That is the core of our economic approach: to build, to build capacity, to build resilience, to build inclusiveness at home and with partners around the world. The capacity to produce and innovate and to deliver public goods like strong physical and digital infrastructure and clean energy at scale. The resilience to withstand natural disasters and geopolitical shocks and the inclusiveness to ensure a strong, vibrant American middle class and greater opportunity for working people around the world. All of that is part of what we have called a ‘foreign policy for the middle class.’ And the first step is laying a new foundation at home with a modern American industrial strategy.”
He expanded on the idea of “American industrial strategy”:
“A modern American industrial strategy identifies specific sectors that are foundational to economic growth, strategic from a national security perspective, and where private industry on its own isn’t poised to make the investments needed to secure our national ambitions. It deploys targeted public investments in these areas that unlock the power and ingenuity of private markets, capitalism, and competition to lay a foundation for long-term growth. It helps enable American business to do what American business does best: innovate, scale, and compete. This is about crowding-in private investment, not replacing it. It’s about making long-term investments in sectors vital to our national well-being, not picking winners and losers. And it has a long tradition in this country.”
And he also spoke on the administration’s pause on trade agreements:
“We do intend to pursue modern trade agreements. But to define or measure our entire policy based on tariff reduction misses something important. Asking what our trade policy is now, narrowly framed as plans to reduce tariffs further, is simply the wrong question. The right question is how does trade fit into our international economic policy? And what problems is it seeking to solve? The project of the 2020s and the 2030s is different than the project of the 1990s.”
But a large part of this speech was obviously about the U.S.-Communist China economic relationship, which despite being worth hundreds of billions of dollars annually has grown pretty frosty in the past few years. And Sullivan – like Yellen and also U.S. Trade Representative Katherine Tai – has now pointedly tamped down the idea that relations will inevitably deteriorate.
His speech, in fact, even used the same language European political leaders have used in discussing economic engagement with Communist China. Ursula von der Leyen, the European Commission president, has been saying “de-risk” rather than “de-couple” for months now. So did Sullivan today. That kind of subtle language is meant to convey to Chinese leaders that economic engagement is on the table, given the right parameters.
Despite everyone appearing to be in agreement, word around the campfire – or at least according to a Washington Post foreign policy columnist – is “public declarations of unity mask a growing tension inside the administration about the policy direction.”
That may be so. While they figure out their feelings, though, the United States should maintain the tariff regime its erected against Chinese imports and push forward with implementing the “American industrial strategy” Washington has begun to put in place.
“At the end of the day, what we are trying to do is build the capacity to make things and deploy them and the resilience to be able to withstand the shocks in today’s world, from the climate crisis to a global pandemic to a war,” said Sullivan during his remarks.
Hear hear! You can watch the national security advisor’s whole speech here: