Lack of specifics on US’ China policy frustrates those seeking change from Trade Representative Katherine Tai

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US Trade Representative Katherine Tai speaks in Washington on Monday. Photo: Bloomberg

U.S. trade chief: Biden will build from Trump-era tariffs to confront China

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Tai’s office later announced that she will deliver a speech Monday on the administration’s approach to trade with China at the Center for Strategic and International Studies in Washington.

Her office has been conducting a “top-to-bottom” review of U.S. trade policy toward China since her confirmation in March. She said during the interview that the review would be completed “very soon” but would not specify when.

The administration has spent its first eight months rallying key trading partners — including the European Union, Australia and Japan — to join together to confront Beijing’s economic behavior.

Tai was here in Pittsburgh this week seeking to unite with EU officials on tackling pressing trade and technology issues, including market-distorting behaviors that the U.S. has long accused Beijing of perpetuating, such as forced technology transfer and industrial subsidies.

Though the U.S.-EU joint statement after the summit never mentions China by name, it is clearly the prime target.

“The relationship with the EU is extremely important in that respect, and I do think that there is every reason for us, because of our shared interests, to build on the relationship between us,” Tai said. “For itself, because it is inherently valuable, but also to build on that relationship on a collaborative basis for taking on the challenges that we are both experiencing.”

The Phase One trade deal signed by former President Donald Trump will expire at the end of the year, and data show that China is falling short on its commitment to purchase an additional $200 billion in U.S. goods. The Biden administration will need to decide how to address the shortfall with Beijing, and whether to negotiate a follow-on agreement.

Tai would not comment on whether there were imminent plans for a meeting with her Chinese counterpart, Vice Premier Liu He. The pair are supposed to meet every six months under the terms of the Phase One deal, but nothing has been scheduled since Tai was confirmed in March.

The Biden administration has so far also resisted pressure from American companies to lift tariffs on billions of dollars of Chinese goods. The Trump administration imposed those duties and then subsequently excluded certain goods, but those exclusions expired at the end of last year and Biden has not moved to renew most of them.

Those Section 301 tariffs, which Trump imposed based on a rarely used 1974 trade law, have “had the effect of getting a lot of people’s attention,” Tai said. That includes U.S. companies, their workers, trading partners and, obviously, China, she said.

“In that sense, I would say that the 301 tariffs are a tool for creating the kind of effective policies, and [are] something for us to build on and to use in terms of defending to the hilt the interests of the American economy, the American worker and American businesses and our farmers, too,” she said.

She also challenged the notion that tariffs are ultimately paid by American consumers, saying it’s a more complicated calculation than many suggest.

“The interests of our economy and the way our stakeholders are arrayed in our economy is very complex, and you have to bring an appreciation for that complexity to something as important as navigating the U.S.-China trade and economic relationship,” she said.

Past U.S. trade representatives have had to grapple with the China challenge, and now she must find new approaches where they have come up short. She said she remains open to new ways of exerting pressure on China to reform its practices.

“There are a lot of lessons that we can take,” she said. “I think we’ve always had our intentions in the right place in terms of engagement on the one hand, enforcement on the other hand. But over time, we have to gauge how effective we have been.”

Ultimately, the path forward will be most effective if the U.S. brings other democratic allies along. She said the Biden administration has focused on “mending” the trans-Atlantic relationship, though it came under fresh strain last week after a dispute with France.

The inaugural meeting of the U.S.-EU Trade and Technology Council in Pittsburgh this week was part of strengthening those ties. As one of the council’s five co-chairs, Tai said she “couldn’t be more pleased” with progress the two sides have made toward aligning their policies since the group was announced in June.

“Relationships between governments are both abstract, but they are also about relationships of people who comprise those governments,” Tai said. “We will continue to build, and when challenges crop up, you have to be able to work through them, talk through them. That’s what makes the relationship stronger.”

U.S. Signals No Thaw in Trade Relations With China

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In the past month, the United States has announced a new deal to provide nuclear-powered submarines to Australia, an effort to push back on Beijing’s military modernization and its claims of territory in the South China Sea. Mr. Biden also met at the White House with the leaders of Japan, Australia and India, aiming to put the major democracies of the region in accord on how to deal with China’s influence and authoritarianism. And the United States and China are both seeking technological advantage, even if it means cutting off each other’s access to key goods.

China, having repressed dissent in Hong Kong and essentially wiped away its guarantees to Britain about keeping its hands off the territory for decades, is now regularly threatening Taiwan. The United States formally protested some of China’s actions on Sunday, after dozens of military aircraft flew on Friday and Saturday into Taiwan’s air defense identification zone, although not over the island itself. While U.S. officials do not expect Beijing to move against Taiwan, they are increasingly concerned about the possibility of an accidental conflict.

Trade was one area — along with climate — where mutual interest might steer the two countries to some agreements, even as they compete in other areas. But it is unclear whether they can find a way to reach an accord amid other tensions.

Mr. Trump’s deal halted the trade war, but it did not put an end to economic hostilities. China still maintains tariffs on 58.3 percent of its imports from the United States; the United States imposes tariffs on 66.4 percent of the products it brings in from China, according to Mr. Bown.

Some Biden officials, like many economists, have made clear that they see the tariffs as counterproductive and taking a toll on American consumers and manufacturers as well as Chinese businesses. Treasury Secretary Janet L. Yellen said in July that the China deal had “hurt American consumers.”

Asked if they would consider additional tariffs on China, officials said the Biden administration would not be taking any tools off the table. The administration planned to use the enforcement mechanism established in the trade deal, they said, which would allow the United States to resort to further tariffs if consultations were unsuccessful.