The Paradox of Protectionism

The Paradox of Protectionism

Biden’s tariffs on Chinese goods will inadvertently undermine U.S. strategic interests in the Indo-Pacific.

The Biden administration’s expansion of tariff rates on Chinese manufactured goods risks undermining the “free and open Indo-Pacific” that he pledged to defend. By applying tax rates of up to 100 percent on Chinese goods, the Biden team is not only preventing Chinese exports to the United States but also disrupting regional trade and supply networks, including those involving key U.S. allies and partners.

In doing so, the White House’s industrial policies are undermining economic integration and shared growth in Asia, arguably the single biggest contributor to peace and stability in the Indo-Pacific since the end of the Cold War. The implications for long-term U.S. strategic engagement in the Indo-Pacific are profound.

The primary contradiction in the administration’s Indo-Pacific policies lies in the region’s value chains (RVCs), which are the densest in the world, particularly in high-tech sectors. While RVCs in Europe and North America have declined in recent years, those in “Factory Asia” have noticeably increased due to China’s economic centrality in the region.

Therefore, any effort to limit Chinese exports will inevitably impact other regional states, especially as China has prioritized RVC expansion and economic integration across Asia. For example, tariffs on batteries, battery components, and critical minerals will impact Southeast Asian states like Indonesia, Malaysia, and Thailand. These countries are integrated into Chinese-centric RVCs and will face higher production costs and supply chain disruptions as a result.

Tariffs on Chinese electric vehicles will similarly affect Japan and South Korea—two key regional allies—as production and sourcing costs impact automotive companies like Honda and Hyundai that rely on parts from China. Similarly, new tariffs on Chinese solar cells will likely lead to supply chain disruptions for states and economies like India and Taiwan, which rely on trade with China for their solar PV and green supply chains.

Vietnam will likely experience more negative secondary effects from the new trade restrictions than any other Asian state. Having emerged as the primary “China-plus-one” destination, Vietnam will suffer from increased production costs, supply chain disruptions, trade diversion, market losses, unemployment, and potential disinvestment, as it remains highly dependent on Chinese suppliers for its manufacturing base.

This downside for Vietnam is particularly significant for American foreign and security policy, as successive U.S. administrations have worked to cultivate closer ties with Hanoi as a counterpoint to Chinese regional influence. Should Vietnamese leadership come to view the U.S. as an obstacle to its manufacturing and industrial development, the states’ bilateral relations will likely deteriorate.

While the Biden administration justifies its new tariffs on national security grounds, this rationale rings hollow across the Indo-Pacific, particularly in Southeast Asia, which serves as the beating heart of the U.S. Indo-Pacific strategy. Asian states are resistant to U.S. policies that securitize regional trade and investments since they view such policies as antithetical to their own security interests. ASEAN member states, for instance, prioritize socio-economic stability and growth as their primary security concerns, according to regional polling. Where U.S. policies undermine regional economic integration, energy security, food security, and employment, Asian states’ opposition to such policies will grow, as seen in the case of U.S. support for Ukraine.

Biden’s new tariffs complicate—if not entirely undermine—the U.S. strategic narrative in Asia, which is predicated on maintaining a ‘free and open, connected, prosperous, secure, and resilient’ Indo-Pacific. Central to that vision, as outlined in the 2022 National Security Strategy and the 2022 Indo-Pacific Strategy, is the U.S. commitment to underpin the region’s existing rules-based order to ensure its stability and security.

Rather than operating in line with the very rules it has propagated, including those advocated through the Indo-Pacific Economic Framework (IPEF), Biden has instead chosen a policy direction that reinforces regional perceptions of American hypocrisy, where Washington ignores rules, norms, and laws when it suits its strategic purpose. Regional cynicism about America’s willingness to play by the rules undermines American messaging on international law, human rights, and China’s economic coercion—key components of Washington’s diplomatic narrative in Asia.

Whatever strategic advantages Biden hoped the tariffs might provide the United States in Asia are outweighed by these strategic disadvantages, particularly concerning its overall reputation and prestige. Regional sentiment has already largely shifted against Washington, with more Asian states preferring China as their partner of choice. The sense that Biden is essentially implementing an America First-type regional strategy will undoubtedly further sour Asian states on the idea of U.S. leadership and credibility.

The Biden administration apparently determined that it must become more like China to effectively compete with China, particularly by conflating U.S. industrial and security strategies. In doing so, it risks Asian states viewing it as little different from Beijing in intent, albeit less effective in application. This recalibration of America’s image in Asia would be disastrous to its long-term strategic interests. The White House clearly has some difficult decisions to make.

Jeffrey Reeves is a Senior Washington Research Fellow with the Institute of Peace and Diplomacy, as well as an associate professor with the Naval War College at the Naval Postgraduate School.  Prior to his current position, he was Vice President for Research and Strategy with the Asia Pacific Foundation of Canada and Director of Asia Studies with the U.S. Army War College. The views expressed in this article are his alone.

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