U.S. Trade Representative Katherine Tai on Monday said she plans to raise “serious concerns” about China’s trade practices in direct talks with her Chinese counterpart in the coming days that will also focus on enforcing Beijing’s commitments under a Trump-era trade pact.
“China made commitments that benefit certain American industries, including agriculture, that we must enforce,” Tai said of the commitments Beijing made under the so-called “phase one” trade pact negotiated by the Trump administration.
“We continue to have serious concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One deal. As we work to enforce the terms of Phase One, we will raise these broader policy concerns with Beijing,” Tai said during a speech at the Center for Strategic and International Studies.
Tai said that the Biden administration’s goal “is not to inflame trade tensions with China” but rather to chart a path forward to “durable coexistence” for both the U.S. and China in the trade arena.
Tai’s remarks offered the first extensive look at how President Biden’s administration will tackle the trade relationship with China.
While Biden administration officials have described the Trump administration’s approach as flawed and erratic, they plan to work to enforce the Trump-era trade pact negotiated with China in 2019 which helped deescalate a tit-for-tat tariff war.
Tai wouldn’t go into detail on Monday on the aspects of the trade pact on which China is falling short but said she plans to have “honest conversations” with Beijing about their commitments.
“Our assessment is something most importantly that we have to take up with China,” Tai said.
Tai also would not rule out launching a Section 301 investigation into Chinese subsidies, which the Biden administration has reportedly weighed.
“It depends,” Tai said when asked about the possibility following her speech. “We will look at all available tools in addressing our concerns and ensuring that we are able to defend the interests of the American economy.”
The Biden administration is keeping existing tariffs on Chinese goods in place but Tai announced that officials would resume a “a targeted tariff exclusion process” to offer relief to businesses that have been impacted by the tariffs.
“We place a lot of weight in what we hear from our businesses,” Tai said, noting the impacts on small- and medium-sized businesses in particular. “That is certainly why we are restarting a tariff exclusion process.”
Tai described the forthcoming engagements with her Chinese counterpart, Vice Premier Liu He, as the first step in determining how the Biden administration will approach the U.S.-China trade relationship in the near and long term.
The strategy she outlined will also rely on investing in U.S. physical infrastructure and accomplishing Biden’s broader economic vision in order to strengthen American competitiveness. That hinges on Congress passing the bipartisan infrastructure bill and a larger reconciliation package.
“Unlike the past, this administration will engage from a position of strength because we are investing in our workers and our infrastructure,” Tai said. “If we are going to compete in the global market, we need to make equal or greater investments here at home.”