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Trump’s China trade deal is ‘starting point’ for Biden

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The Biden administration wants to reshape former President Trump’s historic phase one trade deal with China but acknowledged the former president laid the groundwork.

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U.S. Trade Representative Katherine Tai on Monday laid out her vision for trade relations between the world’s two largest economic powers, and admitted there is a zero-sum dynamic where China’s economic prosperity comes at the expense of workers and economic opportunity in the U.S.

“We need to take a new holistic and pragmatic approach in our relationship,” Tai said during a discussion with Bill Reinsch, senior adviser and Scholl Chair in international business at the Center for Strategic and International Studies.

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She added that Trump’s trade deal is “the starting point” for talks and that the administration will “have to address where the relationship goes from the starting point.”

Tai said China will be held to the commitments it made as part of the phase one trade deal that benefit certain industries, but that the administration plans to roll back some tariffs that have not produced strategic benefits and raised costs on Americans.

The administration also plans to address state-centered and non-market trade practices that include propping up state-owned enterprises and theft of American intellectual property.

The plan includes working with U.S. allies and partners instead of taking the unilateral approach that was preferred by the Trump administration. Tai’s office says the Trump administration’s unilateral approach “alienated our allies and partners and hurt select sectors of the American economy.”

Tai has spoken to Liu He, her Chinese counterpart, once since her appointment, but did not discuss whether China intends to keep its end of the agreement.

So far, China is lagging behind the commitments it made as part of the historic trade pact that was signed in January 2020.

Beijing agreed to purchase an additional $200 billion of U.S. products over the next two years, and also included promises to halt intellectual property theft, refrain from currency manipulation and cooperate in financial services.

However, a recent assessment of the deal, conducted by the Peterson Institute for International Economics, found that Beijing is lagging well behind its commitments.

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Chinese import data shows the country has purchased $89.4 billion of U.S. goods since the beginning of the deal, or 69% of the $129.9 billion target for August. Beijing has committed to import $207.4 billion worth of goods through this year.

China lags even further behind its commitment when using U.S. trade figures. Export data shows $70.6 billion of goods, or 62% of the $113 billion target, have been shipped to China through August. The deal calls for the U.S. to have exported $193.3 billion of goods by the end of 2021.

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