Biden and Blinken are trying to restore faith in the Atlantic Alliance, hoping that the EU (especially Germany) will forget that the Trump administration ever happened. This is why Blinken talks about a "rules-based world order" and "international institutions". These were ideas which Trump very publicly rejected. Biden and the State Dept. need to convince these crucial US allies that Trump was an aberration, and will not come back in a slightly different form later down the line as Josh Hawley or someone else.

China is countering the Biden narrative by pointing out all the US domestic social problems which the US has such as BLM etc. Underlying this narrative to Europe and the rest of the world is that while the US is more predictable under Biden, the wheels are likely to come off in the future because of its huge social problems which have been allowed to build up over time, and which the Biden administration is not likely to be able to address in its own limited timeframe, mainly because of strong Republican opposition to Biden and the Democrats. Trump was not an aberration; he is a symptom of a deep American disease which the US is not able to address, and is now forcing the US into decline. China may have its serious shortcomings (Xinjiang, Taiwan, HK), but it is very predictable, and a force for stability, unlike the US. By criticizing China over Xinjiang human rights issues, the western media is attempting to divert attention away from more important and major issues in a futile effort to buy time.

US domestic politics is affecting US foreign policy in a way it never has before, and which most Americans are not used to understanding. Domestic social and political instability figures into how US allies and challengers make their calculations.

As for CAI, I believe Beijing is willing to shelve it or have it defeated in the short-term without seeing it as a major loss. If the Republicans win in the 2022 mid-terms, and US politics becomes more crazy and volatile, Beijing can pull it off the shelf and re-negotiate it and likely have it pass. If this happens, it will confirm Beijing's narrative that the US is in decline, and the EU will move more independently of the US re China.

In short, if the US is going to stay in the game with China, the Democrats need to win the 2022 mid-terms and the 2024 presidential election. If they don't, all bets are off for the US.