Top U.S. trade negotiator Katherine Tai on Oct. 4 vowed to unwind some Trump-era tariffs on Chinese goods, and press the Chinese regime for “frank” talks in a bid to end Beijing’s unfair trade practices.
Over the past decades, Beijing poured billions in state subsidies into targeted industries such as steel, solar, and agriculture, causing the shuttering of American factories and a “zero-sum dynamic in the world economy,” Tai told an Oct. 4 panel hosted by Washington-based think tank Center for Strategic and International Studies.
“Above all else, we must defend—to the hilt—our economic interests,” she said at the event, explaining that she would be “taking all steps necessary to protect ourselves against the waves of damage inflicted over the years through unfair competition.”
Tai said that her office has conducted a comprehensive review of the phase-one trade agreement the United States reached with China last year during the Trump administration. She is expected to have a telephone call with her Chinese counterpart, Vice Premier Liu He to discuss China’s performance.
She said that Washington will start a “targeted tariff exclusion process” to exempt some Chinese imports from punitive U.S. tariffs with potential additional exclusion processes in the future.
Tai stopped short of saying whether China had fulfilled its commitments under the deal but said that “most importantly, we have to take up with China.”
The phase one trade deal signed during the Trump administration requires China to buy $200 billion worth of additional U.S. goods and services during the two-year period of 2020 and 2021. Analysis of Chinese trade data by the Peterson Institute for International Economics showed that China has met about 58 percent of its purchase commitments in 2020 and 69 percent through Aug. 2021.
Tai shared her reservations about the trade deal, saying that it had not addressed China’s state-centered and non-market trade practices. However, the official added that she would not rule out levying new tariffs to force China to make good on its word.
The United States will not pursue “Phase two” negotiations with China on deeper structural issues such as massive subsidies to vital industries that skew global markets, because Beijing is “doubling down on its authoritarian state-centric approach,” senior administration officials said during a press call on Sunday.
“We recognize that China simply may not change, and that we have to have a strategy that deals with China as it is, rather than as we might wish it to be,” one of the officials said.
Emel Akan and Reuters contributed to this report.