The Center for Strategic International Studies (CSIS), a Washington think tank, hosted Ambassador Katherine Tai, United States Trade Representative (USTR), to share the Biden Administration’s trade vision and strategies with China.
In her opening remarks, Tai acknowledged President Biden’s intention to create global competitiveness through smart domestic investments, such as research and development and clean energy technology, while also incentivizing companies to buy American-made products.
China, through the Phase One agreement, “made commitments that benefit certain American industries, including agriculture, that we must enforce,” Tai says.
To enforce China’s commitments, a meeting will be held to share U.S.-China trade industrial policy mismatch and the impacts on our economies.
“The architecture of this agreement is where we have to start. How we proceed from here is going to involve the principles I laid out in my speech: what will be in the interest of the American economy, how much traction we get with China and to what degree we have to take our own measure to defend our interest,” says Tai.
She says defending America’s current economic interest does not mean increasing or decreasing Trump’s previously established tariffs. However, if China does not acknowledge U.S. concerns, further trade restrictions are likely.
“I am committed to working through the many challenges ahead of us in this bilateral process in order to deliver meaningful results. But above all else, we must defend — to the hilt — our economic interests,” Tai said.
Host Bill Reinsch, Senior Adviser and Scholl Chair in International Business at CSIS, inquired as to what sectors Tai’s team at the USTR office are targeting. She said she’d like to reframe our traditional targeted trade tactics.
“There is a thirst in our business sector for increased market access to China. The traditional lines of how we’ve thought about trade has been very focused on securing market access. Our traditional approach to trade has run into a lot of realities that are, today, causing us to open our eyes and question whether we are looking for more liberalized trade or are we looking for smarter, resilient trade.”
Manufacturing activity is vital to the feedback loop of research and development and, therefore, resiliency, according to Tai. She says America’s main concern has been efficiency when we should also be heavily considering resiliency, as the COVID-19 pandemic has shown our lack of manufacturing resiliency when compared to China.
“In terms of China’s scale—the direction of their industrial policies and the speed in which we have seen China accomplish many of its goals—there are a number of sectors in our economy where we can no longer just wish for the best, we need to address it,” says Tai.
House Agriculture Committee Republic Leader Glenn Thompson rang in on Tai’s remarks saying:
“Phase I of the U.S.-China trade agreement, negotiated by the Trump Administration, has yielded a robust recovery in the U.S. agricultural economy, and I expect the Biden Administration to press China to stand by its commitment,” said Thompson. “The focus should be ensuring accountability for any unfulfilled promises while pushing to address additional barriers China maintains against our ag exports in a second phase. China must play by the rules, which includes upholding its compliance with the terms of its WTO membership.”
While the office of the USTR has not set a time to meet with China, they intend to do so before the Phase One agreement’s two-year anniversary on Feb. 15, 2022.
