Biden Administration to Change Trade Policy on China

After an extensive review found China isn’t meeting its commitments under the Phase One trade deal, Biden administration announced on Monday changes in trade policy with China while considering other punitive actions, Fox News reports.

China’s refusal to follow through on unfilled commitments under Trump’s Phase One trade deal, lays the groundwork for the Biden administration to keep in place Trump-era tariffs, US Trade Representative Katherine Tai stressed.

She pointed that the US plans to use “all available tools” aimed at forcing China to implement the Phase One Trade agreement, declining to specifically say what enforcement mechanisms the administration would be using.

Tai plans to address China’s coercive and predatory trade practices and highlight the China’s history of trade abuses since its accession into the World Trade Organization in 2001.

Within the deal struck by former President Donald Trump’s administration, China agreed to purchase an additional $200 billion in US goods during a two-year period, a pledge it has so far failed to follow through on, running at 62% of the targets for purchases of US goods and services.

This will be the first time the administration to forcefully push back against China while Tai plans to resume direct negotiations to emphasize the need for China to follow through on the rest of their commitments.

After Biden criticized Trump’s trade strategy on the campaign trail, American businesses and importers waited months to hear what he’ll do with the trade war with China he inherited from his predecessor, but while his administration was conducting its months-long review of US trade policy toward China, Biden maintained tariffs on billions of dollar worth of goods since taking office in January.

Biden’s strategy, reportedly, was not to escalate trade tensions with China or double down on Trump’s flawed strategy.

According to senior administration officials, part of Biden administration’s new plan envisions the US restarting a targeted tariff exclusion process on top of engagement with allies in hopes of promoting fair, competitive, international trading.

Though he does not expect China to meaningfully change its practices and his administration not seeking to open negotiations on a Phase Two agreement, Biden is trying to craft a trade strategy for China that extends beyond tariffs after the review of the Trump’s Phase One trade deal concluded that it failed to address fundamental concerns over issues like China’s IP theft and support for state-owned enterprises.

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