An agreement announced last week between the United States and China is an important step toward mitigating climate change. But it could unravel under the weight of continuing trade disputes between the world’s two largest economies.
That is particularly relevant in Washington, which often is described as the most trade-dependent state in the nation. With manufacturing and agricultural industries that cater to global markets, and with ports that provide easy access to Asia, Washington relies on both exports and imports to fuel its economy.
China typically ranks as our state’s No. 1 trading partner, although it was surpassed last year by Canada. Part of the reason for the change is the United States’ ongoing trade war with China. In 2018, President Donald Trump launched specious tariffs on various imports, and the inevitable result was retaliatory tariffs from China. President Joe Biden has been shortsighted in failing to eliminate these tariffs, which provide a drag on the economy.
At the time, Trump cited the United States’ trade deficit with China as one of the primary reasons for the tariffs. But as Scott Lincicome of the libertarian Cato Institute told The New York Times: “A bilateral balance doesn’t really tell you anything about what the economy is doing, just like my bilateral deficit with my grocery store doesn’t tell you anything about whether I’m in debt.”
Trump also rightly sought to hold China accountable for the theft of intellectual property. That, indeed, is a serious issue for American innovators and manufacturers. But tariffs, which simply raise prices for U.S. consumers, do little to hold foreign actors accountable for the theft of proprietary information.
Resolving such disputes is the purview of the World Trade Organization, which was created in 1995 and has 164 members representing 98 percent of global GDP.
That is where the recent climate agreement announced by officials in Washington, D.C., and Beijing comes into play.
Having the world’s two largest economies, the United States and China are — by far — the world’s largest emitters of planet-warming carbon. In agreeing on a framework to reduce those emissions, the two sides agreed to “operationalize” a suspended bilateral working group to “engage in dialogue and cooperation to accept concrete climate actions” in this decade.
In the lexicon of diplomatic gobbledygook, “operationalize” deserves exalted status. Real action is needed, not fancy, empty words. And as The Washington Post points out editorially, the vacuum created by such language could be filled by the nations’ enmity over trade.
“This is all happening when the World Trade Organization, the international arbiter for trade disputes for the past quarter-century, has been virtually incapacitated by the budding conflict between China and the United States,” the Post writes.
The United States and China both are seeking to reduce emissions primarily through subsidies for clean energy production. The European Union, meanwhile, focuses on penalties for polluting industries. Indeed, the strategies can work in tandem; our state, for example, is penalizing major polluters and raising money for climate mitigation. But the apparently disparate approaches — additional costs for producers or subsidies for favored industries — inevitably become linked with international trade.
Any agreement between the United States and China regarding climate action is a step in the right direction. But any failure would be particularly damaging to our state.