As US long-term unemployment reportedly rose to a “dangerous level” and US politicians said the virus-hit economy has stalled, calls are mounting for the Biden administration to review the arbitrary trade and tech war against China and its damage to the US economy.
The US January jobs report on Friday showed that although 49,000 jobs were added in the month, the country’s long-term unemployment is approaching a historical peak, marking an “especially dangerous period of unemployment.”
The unemployment rate fell to 6.3 percent, the first decrease in two months, but almost 40 percent of jobless workers in the month were long-term unemployed, according to the US Bureau of Labor Statistics’ January jobs report.
The share has surged to the record set in April 2010, in the aftermath of the Great Recession, during which nearly 46 percent of the unemployed were out of work for at least six months, CNBC reported, adding that it’s an especially “dangerous period” of unemployment, citing labor economists.
The severe challenge to the COVID-19-hit US economy was amplified by the stalling of hiring, with Heather Boushey, a member of the White House’s Council of Economic Advisers, saying that the jobs numbers are showing “an economy that has been stalling,” Reuters reported.
US President Joe Biden on Friday cited the weak employment data in support of the $1.9 trillion stimulus plan, which is reported likely to break into smaller packages to help businesses and individuals to counter pandemic impacts.
While the third round of stimulus checks might be able to temporarily bail out the underclass in the US who bore the brunt of the coronavirus impact, it’s high time for the Biden administration to face the wrong course of the US’ China containment strategy and its damage to the US economy, if Biden wants to pull the US economy out of the current predicament, Chinese experts said.
Although there are still discussions about whether the current US economic predicament is more due to the trade war or the pandemic, there is no doubt that the Trump administration’s arbitrary trade war and suppression on Chinese technology companies has damaged the US economy.
The Biden administration can no longer shun this issue, said Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing.
Despite fighting for more than two years, the US’ reckless trade war and tech decoupling strategies against China have failed to meet almost all of its set goals while incurring significant losses to the US, and there is no shortage of proof in sectors including chipsets, finance and agriculture.
The overall US trade deficit surged to a 12-year high of $678.7 billion in 2020, US Commerce Department data showed on Friday, and the brunt of additional tariffs the Trump administration imposed on Chinese companies are mostly paid by its own companies and consumers, whose fallout is exacerbated amid the pandemic as a growing number of US firms went bankrupt and families saw less income.
The tariffs led to an income loss for US consumers of about $16.8 billion in 2018, Bloomberg reported, citing a report released by the US National Bureau of Economic Research in May 2019.
Impeded by Trump’s ban on chip supplies to leading Chinese technology companies, US chipmaker Qualcomm on Wednesday reported its earnings that slightly missed expectations of $8.27 billion for the quarter ending December.
“Before Trump’s chip supply ban, about 65 percent of global chipsets were sold to Chinese companies every year, a large part of which was bought from US producers,” Cao Heping, a professor at the School of Economics of Peking University, told the Global Times on Saturday.
The superposition of tech decoupling and tariffs against Chinese goods is a blunder rather than a small mistake in the US strategy against China, which has caused substantial losses to the US economy, Cao added.
According to a recent business report of the US-China Business Council, the trade war with China has caused a peak loss of 245,000 US jobs, but a gradual scaling back of tariffs on both sides would boost growth and lead to an additional 145,000 jobs by 2025, Reuters reported.
After the White House last week announced that the Biden administration will review the China-US phase one trade deal signed in January 2020, a series of Western media outlets said that China missed the set purchase goal last year.
The US exported $28.75 billion in agricultural goods and related products to China in 2020, data from the US Department of Agriculture showed on Friday, missing the $36.5 billion target under the phase one trade deal, Reuters said.
Chinese experts pointed out that China has shown great sincerity and won recognition from US agricultural producers in 2020 amid great difficulty caused by the global COVID-19 crisis, and blaming China is groundless.
“It would be more appropriate to say that it’s the US agricultural production capacity and logistics that have problems fulfilling the delivery in 2020 amid the pandemic,” Gao noted.
In Western media outlets, US farmers said that China’s concrete efforts in purchasing agricultural products have benefited them and helped them endure the challenging year.
The China-US phase one trade deal led to a record pace of Chinese purchases in many sectors, boosting agricultural commodity prices, said the US Department of Agriculture in its 2020 accomplishments.
The real problem with the US economic predicament is a domestic recession and the pandemic. The contain China strategy has proven to be wrong, and just by injecting cash into the economy is not an efficient way to promote economic recovery, said Cao, adding that the margin effect of the relief package is also weakening.
The US urgently needs to reverse its strategy of putting all resources into hegemony, and adjust its policy focus as soon as possible to repair the damage of the trade war, promote the recovery of the global economy, and advance technological progress, Cao said.