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ICYMI: Biden Administration outlines "new approach" to trade war with China

Hello Readers,

Allow me to introduce myself —I'm Kristin, the new Editor-in-Chief of The Balance.

I'm so excited to start this journey, and I appreciate all of you joining me for the ride! You'll frequently hear from me in this newsletter, starting with ICYMI, a new weekly recap where I'll share a finance, business, or policy story you may not have heard about.

I know the last 18 months have been some of the most uncertain of our lives, and many of you have questions about the markets, the economy, and your finances. And I promise, we have answers for you.

If you ever need to get in touch, or want to send some feedback, please reach out to me here: newsletters@thebalance.com.

ICYMI: Biden Administration Outlines 'New Approach' to Trade War With China

In case you missed it, this week the Biden administration finally shared details on its China trade policy. Remember when the U.S.-China trade war dominated news headlines and preoccupied the markets? Well, those days could be coming back.

What's in the Plan

So far, the White House has been a little light on details. But for starters, the Biden administration looks to build on the policy laid out by the Trump administration and is keeping many of the measures—like tariffs—in place.

U.S. Trade Representative Katherine Tai is also seeking fresh talks with China that could de-escalate the tensions between the world's two largest economies. Tariff exemptions are back on the table, which should be a relief to many American manufacturers who have argued they couldn't get cost-effective alternatives to some Chinese products. However, the United States hasn't ruled out the possibility of imposing new penalties against China.

Why You Should Care

While tariffs were meant to pressure the Chinese, Americans have undeniably felt the financial costs. Consumer goods are more expensive because of the trade war, and it led U.S. companies to cut wages and even jobs. Coupled with supply chain constraints and inflation, the upcoming holiday season could be costlier now than it was before.

And if you're an investor, be prepared for more volatility. Headlines around the trade war have caused market fluctuations in the past.

What Happens Next?

It depends. The United States has opened up the door for talks with China—and signaled it would work with other countries to increase the pressure—but we'll see how China responds.

- Kristin

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