In a development that buttresses the previous U.S. Administration’s point of view, U.S. Trade Representative Katherine Tai stated, the United States faces “very large challenges” in its economic relationship with China; the challenge requires the Biden Administration’s full attention across the board.
“During their candid exchange, Ambassador Tai discussed the guiding principles of the Biden-Harris administration’s worker-centered trade policy and her ongoing review of the U.S.-China trade relationship, while also raising issues of concern,” said the USTR.
“Both sides view the development of bilateral trade as very important. (Both sides) exchanged views on issues of mutual concern and agreed to maintain communication,” said the Chinese Ministry of Commerce and described the talks as “a candid, pragmatic and constructive exchange”.
The meeting was the first formal engagement between the trade chiefs of both countries and comes at a time when the Biden Administration is in the process of rallying other nations from the Group of 7, to form a united front against China.
China’s handling of the Wuhan Coronavirus, which has so far killed more than 3 million people across the globe has rattled Washington and its allies.
The Biden Administration has ordered aides to investigate theories subscribed by U.S. intelligence agencies on the origin of the Wuhan Coronavirus, including the likelihood of it escaping from a level 4 lab in China.
Ahead of the expiry of the Phase 1 trade deal, which comes to an end in 2021, the current administration is conducting a comprehensive review of U.S.-China trade policy.
“The overall challenges that we have with China are also still there and they are very large,” said Tai while adding, “The Phase 1 trade deal should be seen in the context of the overall U.S.-China trade, and economic relationship which is very, very challenging. And requires our attention all across the board,” said Tai.
The Biden administration has quietly removed many trade barriers put in place by the Trump Administration but has promised a similar muscular pushback on China’s state-driven economic model.
With just seven months to go before the Phase 1 deal comes to an end, despite Beijing’s commitments it is 40% short of its purchase commitments in 2020 and continues to lag behind in its imports this year.
According to the Peterson Institute for International Economics, through 2020, China’s total imports of covered products from the U.S. was $99.9 billion, compared with its commitment of $173.1 billion,
China has also promised to take steps to protect U.S. intellectual property as well as ease barriers in its financial services, and agricultural sector and ease regulations in the biotechnology sector.
The Phase 1 trade deal does not address fundamental U.S. concerns about forced technology transfers by China, as well as the massive subsidies state-owned companies receive in China. The Trump Administration had said it would address these concerns in the second phase of the trade deal.