Washington is weighing up more aggressive economic measures against China amid rising anger over Beijing’s handling of the pandemic, threatening the commercial truce reached less than four months ago. As the disease swept across the US killing tens of thousands of people and devastating the economy, US President Donald Trump accused China of covering up its coronavirus outbreak and failing to prevent its spread around the world. The White House and Capitol Hill are now looking to match the anti-Beijing rhetoric with steps to curb supply chains and investment flows, according to public remarks by administration officials, congressional aides, and industry lobbyists in Washington. However, it is unclear how far they are willing to go, given fears of inflicting more damage to the US economy.
“US-China tension was an issue before Covid-19 for sure, but Covid-19 has acted as an accelerator,” said Stephanie Segal, a former US Treasury official and senior fellow at the Center for Strategic and International Studies. “You could have foreseen a scenario where there was a recognition that the pandemic requires multilateral co-operation and co-ordination. Instead, it has devolved where both sides are blaming the other for the state of the world,” she said.
The deterioration in US-China relations has been particularly jarring given the trade truce reached in January by Mr Trump and China’s President Xi Jinping, which ended almost two years of tariff threats between the world’s largest economies. While limited in its scope, the agreement raised hopes that it could deliver some stability to the economic relationship until after November’s US presidential election. But Mr Trump is now warning China that Washington could ditch the agreement if Beijing fails to follow through on its planned purchases of American goods, reviving the threat of higher tariffs on Chinese imports.
“If they don’t buy, we’ll terminate the deal. Very simple,” the US president said during a Fox News town hall meeting on Sunday night. For Mr. Trump, there is a pressing political rationale for reverting to a tough stance towards China: his re-election bid is less than six months away, and Joe Biden, his presumptive Democratic challenger, has attacked him for playing down the threat of the virus while praising Mr Xi’s leadership in the final stages of the trade talks. The White House has already taken some economicsteps that will unnerve Beijing. It has tightened export controls curbing semiconductor sales to China, opened the door for the government pension fund to stop investing in some