Biden Administration Says It’s Realigning Its China Trade Policy, But Offers Few Details

U.S. Trade Representative Katherine Tai testifies before the Senate Finance Committee on Capitol Hill in Washington, on May 12, 2021. (Pete Marovich/Pool via Reuters)

The United States Trade Representative (USTR) said on March 1 that Washington is realigning its trade approach towards China, adding it is considering all existing tools, and potentially new ones, to combat Beijing’s harmful trade practices. But it offered little new information about how this would be achieved.

In its new 2022 Trade Policy Agenda and 2021 Annual Report, the USTR said the administration is adopting a “new, holistic, and pragmatic approach to our relationship [with China] grounded in the principles of our worker-centered trade policy.”

“We are clear-eyed about China’s doubling down on its harmful trade and economic abuses,” the report added.

However, besides stating that the strategy involved the United States enhancing cooperation with partners and allies, the USTR provided little detail on the specifics of the administration’s approach.

The report came amid growing pressure by lawmakers and industry groups who have asked the administration to clarify its trade policy with respect to the Chinese regime.

It also came after the expiry of the “phase one” U.S.-China trade deal signed in January 2020, which resulted in Beijing falling far short of meeting its purchase commitments.

The Trump administration launched the U.S.-China trade war in 2018 in response to a litany of unfair trade and economic practices engaged by Beijing, including its rampant theft of American intellectual property, forced technology transfer, and domestic subsidies supporting home-grown industries. Hundreds of billions of dollars in tariffs were levied on both sides as a result; the United States still has around $370 billion in tariffs on Chinese imports.

The USTR has called attention to Beijing’s failure to meet the letter and spirit of World Trade Organization rules and obligations. On Feb. 16, the USTR issued a report detailing China’s failure to meet key pledges under the phase one deal, such as the importation of at least $200 billion more of U.S. products and services in 2020-2021 than China purchased in 2017.

The report stressed that Xi Jinping’s regime continues to move away from tentative pro-market reforms undertaken by certain of his predecessors and continues to step up the regime’s massive intervention in the Chinese economy. It emphasized Beijing’s heavy promotion of state-owned enterprises and “national champions” at the expense of foreign suppliers and manufacturers, which are denied access to critical sectors and markets, and the regime’s outright banning of products from countries such as Australia, which has been subject to a range of trade restrictions after calling for an investigation into Beijing’s responsibility for the spread of COVID-19.

U.S. Deputy Trade Representative Sarah Bianchi said last month that high-level conversations between Washington and Beijing over the regime’s failure to meet its obligations under the phase one deal had been “very difficult.”

“It’s not our goal to escalate here. But certainly we’re looking at all the tools we have in our toolbox to make sure they’re held accountable,” Bianchi said on Feb. 1, without providing details.