Top trade executives to provide details of Biden strategy, as tariffs linger and talks push to restart business
Trade groups are pressing the Biden administration for clarity, including whether the White House plans to begin talks with Beijing for a phase one trade deal struck in January 2020 and whether tariffs on Chinese imports will continue.
“We need to ask ourselves, do we really want those additional tariffs forever,” said Craig Allen, president of the US China Business Council, a trade group that represents US companies with large Chinese operations. Mr Allen said he is concerned the Biden administration is comfortable leaving so many tariffs on for so long. “This is going to ruin US-China relations forever,” he said.
Since taking office in March, Ms Tai has largely brushed off questions about China, citing the administration’s review process. She has said she will operate within the parameters of the Trump administration’s Phase I deal, including a yet-to-be-tested mechanism for enforcement if a country is falling short on its commitments.
Ms. Tai’s remarks at the Center for Strategic and International Studies in Washington are likely to be her most detailed assessment of China’s strategy, although many specific policies have to be implemented through a regulatory process and not fully laid out in a speech. can go.
The Trump administration imposed tariffs on about $370 billion in imports from China in 2018. The Biden administration has yet to touch on those tariffs, although the levies no longer have the effect they once did.
Importers have shifted goods from China that were not affected by the tariffs, and earlier this year the tariffs only covered $250 billion in trade.
Many US importers – those who pay the duty – have been angered because they have not been able to apply for duty relief. The Trump administration had created a process by which US importers could apply for exclusions.
The Biden administration, however, allowed the process to end, saying it should review it. This left many companies in a situation where they were forced to pay tariffs, but their Chinese competitors were not.
Another issue to be resolved is the extension of China’s commitment to purchase American goods. A focus of the Phase I trade deal was Beijing’s promise to boost purchases of soybeans, corn, meat, energy products and manufactured goods.
The agreement called on China to increase purchases of goods and services by an additional $200 billion during 2020 and 2021. According to calculations by Chad Boun, a senior partner in China, it missed the 2020 goods purchase target by about 40% in 2020. Peterson Institute for International Economics which is tracking this effort. With four months left in 2021, China is on pace to fall 30% short of its target.
The economic disruption caused by the coronavirus pandemic has made achieving goals more difficult than expected. So far, missing the targets by such a huge margin has yielded no results for China.
The first phase of the deal had specific targets for 2020 and 2021, meaning that aspect of the deal will end with effect from the end of this year.
“I am not convinced that the buy-commitment approach had much of an impact on China,” Mr. Boun said. “After almost two years, it seems that China bought what it needed — a lot of agricultural products and semiconductors — but it didn’t buy a lot of the airplanes or cars that the Trump administration wanted.”
One area where the Biden administration has voiced its discontent is China’s policies toward intellectual property. In an April report, the USTR said China should do more to protect American intellectual property. While China has changed many of its intellectual property laws in accordance with the deal, it has also adopted new tactics that critics say once again threaten to undermine US patents.
The Trump administration called its deal phase one because the two sides would quickly begin talks on phase 2. But even after almost two years, no such talks have started.
—Yuka Hayashi contributed to this article.
write to Josh Zumbrun at [email protected]