United States Trade Representative Katherine Tai on Monday outlined the Biden administration’s strategy regarding U.S. trade with China.
“For too long, China’s lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world,” Ambassador Tai said. “In recent years, Beijing has doubled down on its state-centered economic system. It is increasingly clear that China’s plans do not include meaningful reforms to address the concerns that have been shared by the United States and many other countries. We have a lot of work to do.”
Ambassador Tai said USTR plans to discuss China’s “performance under the Phase One Agreement,” including a specific mention of China’s commitments to purchase American agricultural products.
She said the U.S. will start a “targeted” tariff exclusion process, but ultimately will maintain tariffs on Chinese imports put in place by former President Trump.
Third, Ambassador Tai said she intends to raise concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One Agreement.
Finally, she said the U.S. plans to work with allies to “shape the rules for fair trade in the 21st century, and facilitate a race to the top for market economies and democracies.”
Ambassador Tai noted that the Phase One Agreement was pursued with a strategy of unilateral U.S. pressure to try to change Beijing’s practices and produced a set of commitments that include market stability for U.S. agricultural exports. However, “the reality is, this agreement did not meaningfully address the fundamental concerns that we have with China’s trade practices and their harmful impacts on the U.S. economy.” She noted multiple industries in which China has heavily subsidized domestic producers and flooded the global market with cheap products.
Specifically noting agriculture, Tai said “While we have seen more exports to China in recent years, market share is shrinking and agriculture remains an unpredictable sector for U.S. farmers and ranchers who have come to rely heavily on this market. China’s regulatory authorities continue to deploy measures that limit or threaten the market access for our producers – and their bottom lines.”
“That is why we need to take a new, holistic, and pragmatic approach in our relationship with China that can actually further our strategic and economic objectives – for the near-term and the long-term,” she said.
She concluded by summarizing the significance of U.S. infrastructure investment and the importance of bilateral, trilateral, and multi-lateral agreements with U.S. allies to bring pressure on China to change its economic and trade practices.
