New U.S. Task Force Tackles China’s Economic Bullying

The United States has set up a dedicated team within the State Department to assist allies facing economic coercion from China. This team, created with the intent that the U.S. will not stand idly by as China economically pressures countries like South Korea or Australia, is known to operate like a consulting organization.

According to Bloomberg, on the 29th (local time), the U.S. established this team to support allies against China’s economic coercion after China economically pressured Lithuania, which established a contact office with Taiwan in 2021.

Economic coercion refers to China leveraging its massive market to pressure other countries. Previously, when the U.S. forces in South Korea officially decided to deploy the THAAD system in March 2017, China retaliated by effectively banning tourism to South Korea through Chinese travel agencies. China also responded with trade retaliation, such as halting imports of Australian wine, beef, lobster, coal, etc., or imposing high tariffs, when Australia joined the U.S.-led security cooperation body, the Quad, in 2020.

The dedicated team within the U.S. State Department created to counter such Chinese coercion consists of eight members led by Melanie Hart, the China Policy Coordinator. According to Bloomberg, the firm is informally referred to as the team. The firm operates like a company dealing with clients, offering tailored consulting and solutions.

Specifically, the first step involves economists within the State Department analyzing the trade vulnerabilities of the requesting country with China. They then seek ways to diversify export markets beyond China, and if requested, the U.S. publicly expresses its support. They also conduct hypothetical tabletop exercises (TTX) to explore various responses to China’s actions.

Wendy Cutler, former Deputy U.S. Trade Representative and Vice President of the Asia Society Policy Institute (ASPI) diagnosed that this U.S. strategy originated from the perception that the U.S. did not provide enough support when China pressured South Korea or Australia in the past.

Under Secretary of State Jose Fernandez said, “We’ve seen this movie before, and we’ve decided it’s time to stop the film,” acknowledging the criticism that U.S. support for its allies was insufficient as “a valid critique.”