Who initiated the call between Chinese President Xi Jinping and US President Joe Biden on the eve of the Lunar New Year? That does not matter, it was what was said that matters.

Relations between the United States and China deteriorated to their lowest point since 1972 after the previous administration took a hostile approach toward China, with then president Donald Trump blaming China for the decline in manufacturing jobs in the US, even though it was US corporations who chose to outsource their manufacturing to China due to its low cost and high productivity.

The trade war launched by the Trump administration against China has proven futile at best and backfired at worst. First, as tariffs were increased on imports from China, US companies paid higher tariffs when importing parts from China and US factory jobs declined by 0.7 percent between July 2018 and January 2020. Worse, my joint research offers empirical evidence that US companies have raised their prices to offset the increased tariffs on products imported from China, thereby hurting US consumers. Second, while the US trade deficit with China has decreased during this period, its trade deficit with the rest of the world hit a record high by the end of 2019.Third, despite higher tariffs and the ongoing novel coronavirus pandemic, US imports from China were surging as 2020 drew to a close.

So, what can President Joe Biden do to save the day for the US while benefiting the world in the process? First, Biden could make good on the campaign promise he made in an interview when he said he would reverse Trump's China policies, especially the tariffs, without delay. Specifically, he should immediately stop waging the trade war against China to allow both countries to reset their priorities with business-like pragmatism. Currently, everything is "under review" but Biden's first 100 days in office will be ending soon.

Second, Biden could make a strategic move by leveraging President Xi's public remarks on the world's critical problems during the World Economic Forum Virtual Event of the Davos Agenda on Jan 25. Specifically, Biden should propose that the US and China will jointly lead "cooperative" efforts to address four common problems that the whole world is facing.

In the immediate term, the US and China should help control the pandemic by working with all nations to produce, distribute and administer vaccines in every corner of the world. Also, both countries should coordinate their climate change strategies to help the world achieve carbon neutrality.

In the medium term, both countries should think about ways to fight poverty since the US has not yet won the "war on poverty "declared by former president Lyndon Johnson in 1964 while China's income inequality is a serious concern. Moreover, both countries need to reassess their respective industrial policies to ensure uninterrupted worker employment as their production lines increasingly adopt advanced robotics and automation.

Fostering cooperation with China should be well received because President Xi called for cooperation during his Davos conference remarks entitled "Let the Torch of Multilateralism Light Up Humanity's Way Forward". By focusing on solving common problems, the US and China can transform their current antagonistic confrontation into a win-win partnership. At the same time, both leaders will be seen as collaborating to solve the many critical problems facing the world.

Third, in addition to establishing a sustainable public health supply chain for essential products such as medicine and medical supplies and a resilient supply chain for semiconductors, President Biden should develop a national policy with industry and university leaders to compete with China on semiconductor and 5G technologies and industry 4.0 technologies such as 3D printing and drones. Also, the US should re-energize its space program because it can spark new technological innovations as NASA did with its successful moonshot.

Finally, despite Trump's hasty withdrawal from the original Trans-Pacific Partnership, Biden should find ways to join its successor-the Comprehensive and Progressive Agreement for Trans-Pacific Partnership-to stimulate more multilateral trade. It is worth noting that even though the United Kingdom is not located near the Pacific Ocean, it applied to join this free trade pact in late January. With the US as a member, the CPTPP could counterbalance the Regional Comprehensive Economic Partnership that China has joined in November 2019.

The relationship between the US and China is symbiotic and deep rooted. Therefore, aiming for a "draw" in this competitive game may be the wisest long-term strategy. History has shown that starting a war is easy and costly. Maintaining peace during trying times takes true leadership.

Christopher S. Tang is a distinguished professor and Edward W.Carter chairs in business administration at the UCLA Anderson School of Management. The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.