The U.S. Strategy as to U.S. – China Trade Relations — Is Biden Same as Trump But without the Tweets? We’ll See.

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The United States Trade Representative Katherine Tai recently delivered remarks at the Center for Strategic and International Studies (CSIS) outlining the Biden-Harris Administration’s new approach to the U.S.-China bilateral trade relationship. Not clear how different Biden’s trade policy is from Trump’s concerning China. We’ll see, hopefully it will be. Here’s my summary of those remarks.

  • I have said this before and I will continue to say it: the U.S.-China trade and economic relationship is one of profound consequence.  As the two largest economies in the world, how we relate to each other does not just affect our two countries. It impacts the entire world and billions of workers.
  • This bilateral relationship is complex and competitive.  President Biden welcomes that competition to support American workers, grow our economy, and create jobs at home.  
  • He believes we need to manage the competition responsibly – and ensure that it is fair.  
  • We will start a targeted tariff exclusion process.  We will ensure that the existing enforcement structure optimally serves our economic interests.  We will keep open the potential for additional exclusion processes, as warranted. 
  • 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.  
  • And we will use the full range of tools we have and develop new tools as needed to defend American economic interests from harmful policies and practices.
  • Finally and critically, we will continue 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.
  • We focused on dispute settlement cases at the WTO.  We brought 27 cases against China, including some I litigated myself, and through collaboration with our allies.  We secured victories in every case that was decided.  Still, even when China changed the specific practices we challenged, it did not change the underlying policies, and meaningful reforms by China remained elusive.  
  • It launched an investigation focused on China’s forced IP and technology transfer policies – longstanding and serious problems.  This led to substantial U.S. tariffs on imports from China – and retaliation by China.  Against this backdrop of rising tensions, in January 2020, the previous administration and China agreed to what is commonly referred to as the “Phase One Agreement.”  
  • Every steel plant that shuttered left hundreds of workers without livelihoods.  It also left communities reeling, as small businesses dependent on plants also closed their doors and blighted buildings brought down real estate values. 
  • We see the impact of China’s unfair policies in the production of photovoltaic solar cells.  The United States was once a global leader in what was then an emerging industry.  But as China built out its own industry, our companies were forced to close their doors.  
  • U.S. agriculture has not been spared either.  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 line.  
  • We also see troubling dynamics playing out today with the semiconductor industry.  In 2014, China issued an industrial plan to announce, “the goal of establishing a world-leading semiconductor industry…by 2030.”  Reportedly, China has already spent at least $150 billion on this effort, with more on the way.  Its intentions are clear, just as they were with steel and solar.  
  • And we will also directly engage with China on its industrial policies. Our objective is not to inflame trade tensions with China.
  • But above all else, we must defend – to the hilt – our economic interests.  
  • I have been working to strengthen our alliances through bilateral, regional, and multilateral engagement.  And I will continue to do so.

Tai’s Comments at CSIS on US-Chia Trade Strategy (October 4, 2021).

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
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