U.S. Economic Policies Toward China Have Had Mixed Success

Between 2017 and 2024, U.S. economic policies toward China have focused on promoting fair trade and defending U.S. interests. A new RAND report explores this period of heightened tensions between Washington and Beijing, assessing the effectiveness of U.S. tariffs, restrictions on investment and exports, supply chain diversification, and efforts to boost domestic manufacturing.

Overall, the authors find that these policies have had mixed results. For instance, U.S. tariffs have succeeded in reducing imports and the bilateral trade deficit with China. Washington has also had some success in reducing China's access to sensitive U.S. technologies through lawful means. However, U.S. policies have largely failed at ensuring fairer treatment for American firms in China and at persuading Beijing to stop its unfair trade practices.

America’s approach has not been without costs. Some policies—particularly tariff increases—have come at a price, such as reduced U.S. economic growth and losses in U.S. manufacturing jobs, output, and exports.

The authors offer several recommendations that could help advance U.S. goals. For example, Washington could maintain higher tariffs on select Chinese imports, while offering to reduce certain U.S. tariffs in exchange for reductions of Chinese tariffs on U.S. exports. It could also consider ending subsidies to companies in sectors that are not vital for U.S. national security and in which Chinese firms have a clear advantage. And U.S. leaders could signal that Chinese foreign direct investments that do not threaten national security are welcome.