US President Joe Biden urged his successor Donald Trump to tackle China’s “overcapacity” and dominance in clean energy supply chain, calling it a competition the US “must win”.
In a departing message delivered on Monday, a week before leaving office, Biden said the US is in a stronger position in a long-term competition with China, and claimed that the Chinese economy “will never suppress” that of the US owing to his efforts in making the country more competitive.
“When I took office, you all recall, and the experts believe ... it was inevitable that China’s economy would surpass ours. But we in this room said, no, we make the investments in ourselves, we protect our workers and technology. That will not happen now,” Biden said at the US State Department.
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He also claimed China has become “weaker” thanks to the US efforts with allies in countering Beijing in hi-tech, trade, and the Indo-Pacific during the four years of his tenure.
“It’s clear my administration is leaving the next administration with a very strong hand to play ... We’re leaving them an America with more friends and strong reliance, whose adversaries are weaker and under pressure.”
Biden’s efforts to encourage US allies to jointly address the challenges that China poses economically and militarily, as its companies gain global market share and its naval presence grows emerged as a central part of the president’s foreign policy, has had broad support from Democrats and from some in Trump’s party.
Some countries have joined Washington in curbing semiconductor exports to China and imposing tariffs on the country’s leading clean-energy products, including electric vehicles, to counter what they called China’s manufacturing overcapacity.
Biden has also worked with Indo-Pacific nations and with the EU in creating a critical mineral security partnerships, aiming to reduce Beijing’s influence in the global technology supply chain, where China accounts for over 60 per cent of the world’s rare earth production and upwards of 90 per cent of refining.
On Monday, Biden urged his successor to continue American efforts in tackling challenges brought by China in this area.
“Some in the incoming administration are sceptical about the need for clean energy,” he said. “China is trying to dominate the clean energy manufacturing, critical material supply chains. They want to capture the market in the future and create new dependencies. The United States must win that contest.”
“Chinese used to control the supply chains and these materials, but not for long.”
Trump, who will be sworn in on January 20, is known for his scepticism over climate change and the need for a clean energy transition, calling efforts on this front a “green new scam”.
He vowed, for example, to repeal the Inflation Reduction Act (IRA), legislation championed by Biden, which earmarked billions of US dollars in subsidies for companies manufacturing clean energy components in America, among other environmental initiatives launched by Biden.
However, Trump may find that gutting the law may run counter to his campaign trail pledges to boost employment and competitiveness against China.
Samantha Gross, a fellow specialising in climate and energy at the Brookings Institution, a Washington think tank, said job creation would also be an advantage the Trump team would not overlook.
“If you care about American competitiveness in the world, if you care about job creation and keeping manufacturing going here in the United States, you care about this stuff, don’t kick the IRA out,” Gross said in a Brookings panel discussion on Monday.
“Don’t focus only on tariffs, focus on making the US globally competitive, not just in fossil but in clean [energy] as well.”
According to a report released in September by E2, a business group committed to “an economically sound approach to environmental issues”, clean energy and clean vehicle companies added nearly 150,000 new jobs in the US in 2023, the first full year that the IRA was in effect.
On Chinese manufacturing “overcapacity”, Trump has signalled that he will address the issue through tariffs, a tool that he has threatened to wield broadly as part of his “America first” agenda.
The incoming president has long accused Beijing of pursuing unfair trade practices that have led to wide surpluses with the US, a charge that his first presidential administration used to start a trade war in 2018.
Biden kept those tariffs in place throughout his term and some allies have also put up tariff barriers. But it remains to be seen how committed will Trump be in working with US allies to continue countering China, in the Indo-Pacific, which has increasingly become a flashpoint between the two superpowers amid heightening tensions in the Taiwan Strait.
Trump has long criticised many of Washington’s allies for what he calls a lack of burden sharing in defence partnerships. During his election campaign, the president-elect even asked Taiwan to pay the US for its defence.
Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the United States, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governing island by force and is bound by the Taiwan Relations Act to support Taipei’s defence capability.
In his speech on Monday, Biden touted his legacy in the Indo-Pacific and called for continued alignment with allies on China.
“United States should take full advantage of our diplomatic and geopolitical opportunities we’ve created, keep bringing countries together to deal with challenges posed by China,” he said.
“We listed our allies and partners that join us, building more convergence among our allies on a shared approach to China than ever existed, and showing that it’s more effective to deal with China alongside of partners, rather than going alone.”
Additional reporting by Laura Zhou in Washington
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