Biden administration to press China on complying with Trump-era trade pact

The Biden administration plans to begin direct talks with China about its failure to comply with aspects of the so-called phase one trade agreement brokered under the Trump administration, according to senior administration officials.

U.S. Trade Representative Katherine Tai on Monday will deliver a speech about the Biden administration’s approach to the trade relationship with China. In it, Tai will detail how China’s unfair trade practices have harmed U.S. workers and industries and given Beijing a leg up in the global trade system, a senior administration official said on a call with reporters previewing the speech.

Tai will also say that she plans to begin “frank conversations” with her Chinese counterpart about Beijing’s performance under the phase one deal, which then-President Trump heralded as a major accomplishment.

“Unlike the past, this administration will engage from a position of strength because we are investing in our workers and our infrastructure. Repairing our roads and bridges, modernizing our ports, and delivering expanded broadband are the kinds of investments that will begin to give American workers and American businesses the boost needed to embrace their global competitiveness,” Tai will say, according to excerpts of her prepared remarks.

“Beyond our domestic investments, in the coming days, I intend to have frank conversations with my counterpart in China. That will include discussion over China’s performance under the Phase One Agreement. And we will also directly engage with China on its industrial policies,” Tai will say.

The speech, which Tai will deliver at the Center for Strategic and International Studies in Washington, will be the first detailed look at the Biden administration’s approach to U.S.-China trade ties since President Biden took office in January.

The administration has undertaken a months-long review of U.S. trade policy toward China.

Biden administration officials describe the Trump administration’s approach to China trade policy as flawed and say they are working to ensure that it doesn’t hurt American industries, arguing U.S. strategy is better coordinated with allies and partners.

Still, for now, the Biden administration is keeping the Trump-era trade agreement in place but will pressure China to live up to its commitments under the deal.

As part of the deal brokered at the end of 2019, which deescalated a damaging tit-for-tat trade war between the superpowers, China agreed to buy $200 billion more in American goods and services in 2020 and 2021. Data has showed that China fell short of its commitments last year. The phase one agreement is set to expire at the end of this year. 

Biden administration officials did not offer details on specific actions they would take if China does not comply, nor did they lay out a particular timeline on which they want to see Beijing show progress.

 

“We are not going to predetermine what the outcomes of those conversations are, but based on the data that we’ve seen there are some commitments that have not been met, and we think the results overall of the agreement are mixed,” the senior administration official said.

Tai is expected to resume direct talks with her Chinese counterpart in the coming days, the official said.

The Biden administration is also keeping current tariffs on China in place. The administration plans to restart a “targeted” tariff exclusion process, the official said, whereby importers subject to the tariffs could apply for relief from them.

“Our objective is not to escalate trade tensions with China or double down on the previous administration’s flawed strategy,” the official said.

“At the same time, we’re trying to continue to pursue its unfair and coercive practices. We will use the full range of our tools to help ensure that the U.S.-China trade relationship works for American workers, our industries and our supply chains,” the official continued.