Ambassador Katherine Tai, U.S. Trade Representative on President Joseph R. Biden's Cabinet, spoke on the United State's trade relationship with China when she testified recently before the House Ways and Means Committee.
Tai said in her opening remarks at the WMC's Trade Policy Agenda Hearing that President Biden sees trade as a way to bolster the middle class and confront inequality "if we get the rules right." Tai updated the committee on the agency's progress in meeting the President's goals with policy victories around the world before addressing the "realignment of the U.S. – China trade relationship."
Tai reported that the USTR entered into a dialogue last October with trade officials from the People's Republic of China (PRC) to discuss disproportions in the two countries' trade relationship, including the PRC's failure to honor purchase agreements entered into with the U.S. during the previous administration.
U.S. Census data found China not only failed to purchase $200 billion worth of U.S. goods, energy and services above 2017 levels, per its Phase 1 Trade Deal agreement, the PRC didn't even reach 2017 levels, the Globe Banner reported in February.
In her testimony, Tai said such behavior is typical of the PRC.
"However, over time it became clear that the PRC would only comply with those trade obligations that fit its own interests," Tai testified. "This is a familiar pattern with the PRC – from their actions at the WTO and in various bilateral high-level dialogues. The United States has repeatedly sought and obtained commitments from China, only to find that follow-through or real change remains elusive."
Tai described how the USTR studied the effects of those trade policies on industries and workers in the U.S. as well as on U.S. allies, and on the global supply chain.
"We have seen what happened in the steel and solar industries when existing mechanisms were too slow or ill-suited to effectively address the distortions wrought by China’s targeting of those sectors," Tai testified. "In the meantime, we know that the PRC is targeting critical industrial and high-tech sectors, like electric vehicles, batteries, semiconductors and others."
Tai said the U.S. would continue to be open to conversations with China on its responsibility to honor trade agreements but that it is time for the U.S. to "turn the page on the old playbook with China." Instead of only pressing China to change its behavior, Tai said in testimony, the U.S. strategy should also include "vigorously defending our values and economic interests from the negative impacts of the PRC’s unfair economic policies and practices.”
