Four decades of policies that encouraged China to become more economically integrated with the world are unravelling.
President Joe Biden’s US nominee for trade representative, Katherine Tai, says she will work to fight a range of “unfair” Chinese trade and economic practices and seek to treat Chinese censorship as a trade barrier.
In written answers to Senate Finance Committee members’ questions following her confirmation hearing last week, Tai said on Monday that she would seek to use the enforcement consultation process in former President Donald Trump’s “Phase 1” trade deal with China to ensure the protection of American intellectual property.
“I am open to exploring a wide range of options to address our long-standing problems with China’s unfair trade practices, including bilateral talks,” Tai wrote. “However, I will not hesitate to act if those talks prove ineffective,” she added, without naming specific consequences.
She said she would work to address market access restrictions that prevent US companies from competing in the Chinese market, including for cloud computing.
On censorship, she told Republican Senator John Cornyn that Chinese government censorship policies also disadvantage US businesses and that, if confirmed, she would work with him “to develop trade policies that treat censorship as a trade barrier”.
Tai’s written answers were seen by Reuters as the US Trade Representative’s Office released a report on the Biden administration’s trade agenda that included consideration of a border adjustment tax on goods from countries with high carbon pollution and a vow to combat China’s use of forced labour in its Xinjiang region.
Tariffs as a tool
Asked how she would handle “Section 301” tariffs on Chinese goods and tariff exclusions that are now expiring, Tai said she would work to “ensure that those tariffs are appropriately responsive to China’s practices and take into account the impact on US businesses, workers and consumers.”
In a nod to the US energy sector, Tai also said she would work with the Department of Energy and the Department of Agriculture to promote market access for American energy exports, including liquefied natural gas and ethanol.
At her hearing, Tai said that China needs to live up to the commitments in its trade pact with the US – the strongest signal yet that the new administration plans to build on the accord brokered by its predecessor rather than scrap it.
Tai received compliments from Democrats and Republicans alike and is widely expected to be easily confirmed by the Senate. Her promise of a process- and consultation-driven approach is welcomed by lawmakers after four years of chaos under Donald Trump, with tariff actions often coming as surprises announced via Twitter.
The US and China fought a trade war under Trump that continues to see tariffs applied on about $335bn of Chinese goods annually. In the agreement reached in 2020, China promised to purchase more American products. Beijing missed its 2020 trade-deal targets as the global pandemic upended shipping and supply chains.