WASHINGTON, Oct.4 (Reuters) – US trade negotiator Katherine Tai on Monday pledged to exclude certain Chinese imports from tariffs imposed by former President Donald Trump while pressuring Beijing in “frank” talks on its failure to deliver on promises made in Trump’s trade deal and end harmful industrial policies.
Tai said the United States will keep all options open as it continues to push China to stop paying billions of dollars in state subsidies to its semiconductor, steel and steel industries. others that Washington says are hurting American businesses.
Unveiling the results of a month-long “top-down” review of China’s trade policy, Tai said she would seek to meet with Chinese Vice Premier Liu He in the coming days. to examine China’s non-compliance with trade “Phase 1”. deal launched in February 2020, including a shortfall in promised goods purchases in the United States.
“Above all, we must defend – to the end – our economic interests,” Tai said at an event organized by the think tank Center for Strategic and International Studies. “It means taking whatever steps are necessary to protect ourselves from the waves of damage inflicted over the years by unfair competition.”
Washington was “prepared to deploy all tools and explore new development, including collaborating with other economies and countries,” as it charted a new course to change the course of US-China trade dynamics, she declared.
Tai’s remarks were widely praised by U.S. trading groups, though they criticized the lack of a clear roadmap to ending tariffs on U.S. products that have hit U.S. businesses and consumers. , and expand business opportunities for US companies.
“Our concern is that these tariffs remain in place permanently and that this has a negative effect on the US economy,” said Doug Barry, spokesperson for the US-China Business Council, which represents 200 companies doing business in China.
Tai also said it would re-launch a “targeted” process of approving exclusions for certain Chinese imports from punitive US tariffs, providing some relief to US industry, with additional exclusion processes possible in the future. Most of the previous tariff exclusions had expired by the end of 2020.
However, she did not rule out launching new investigations under Section 301 of the Trade Law, which could lead to new tariffs, saying it would depend on China’s actions.
“We have a lot of work to do,” Tai said. “For too long, China’s lack of adherence to global trade standards has undermined the prosperity of Americans and others around the world.”
Tai said she expected to engage in frank conversations with her counterpart about China’s performance under the Phase 1 deal and gaps in its purchasing commitments, but would also engage directly with Beijing on broader issues.
She rejected the idea of separate “phase 2” talks being considered by Trump to tackle issues such as massive subsidies to domestic industries, saying they would be discussed in future talks.
The two-year Phase 1 agreement was reached in late 2019, just as the coronavirus epidemic was emerging in China. The ensuing COVID-19 pandemic caused the biggest drop in global GDP since the Great Depression of the 1930s, wreaking havoc on trade flows and global supply chains, which continue to struggle as demand increases. straightens.
China agreed to buy an additional $ 200 billion in agricultural and manufactured goods, energy and services from the United States over 2017 levels over the two-year agreement, but only reached 62% of target, estimated by Chad Bown, senior researcher at the Peterson Institute for International Economics.
Tai said she has yet to speak to Chinese officials about the factors limiting her purchases.
The Trump-era trade deal, which helps defuse a trade war that has placed tariffs on hundreds of billions of dollars in goods from the two countries, also called on China to improve protections for certain US intellectual property and market access for US biotechnology and financial services. companies.
US President Joe Biden upheld the tariffs imposed by Trump as Tai undertook a top-down review of China’s trade policy and Washington focused on rebuilding ties with US allies to present a more united front in Beijing.
Tai said the Biden administration will continue to invest in technology, education and stronger supply chains to boost the competitiveness of the United States, while working with other major democracies to combat behavior. China’s “non-market”.
CHINA ‘CANNOT CHANGE’
Tai has walked through the history of China’s failure to meet its trade and reform commitments over the past two decades, from its membership of the World Trade Organization to the Phase 1 agreement, and said that ‘It was increasingly clear that Beijing had no plan to address US concerns.
“We recognize that China simply will not change and that we need to have a strategy that treats China as it is, rather than as we would like it to be,” a senior administration official said on Sunday. Biden.
Asked about China’s decoupling, Tai said it was unrealistic for the world’s two largest economies to stop trading with each other. “I think maybe the problem is what are the goals that we are looking for in some kind of ‘recoupling’.”
Reporting by David Lawder and Andrea Shalal; additional reports from Nandita Bose; Editing by Heather Timmons, Lincoln Feast and Marguerita Choy
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