US accuses China of violating trade agreement

Most of the Trump-era US tariffs on China will remain in place following remarks from US Trade Representative Katherine Tai

US Trade Representative Katherine Tai testifies before the Senate Finance Committee on Capitol Hill in May, 2021.
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The United States on Monday accused China of violating aspects of a trade agreement signed under former president Donald Trump last year, dimming prospects that both countries would end the trade war anytime soon.

US Trade Representative Katherine Tai said that Beijing has fallen short of some of its commitments under the phase one trade agreement, concluding a months-long review of US trade policy with China launched under President Joe Biden.

“Our analysis indicates that while commitments in certain areas have been met, that certain business interests have seen benefits, there have also been shortfalls in others,” Ms Tai said during a speech at the Centre for Strategic and International Studies.

“But the reality is this agreement did not meaningfully address the fundamental concerns that we have with China’s trade practices and their harmful impacts on the US economy.”

As part of the phase one trade agreement negotiated under Mr Trump, China made a series of commitments on intellectual property, technology transfers, improved market access and the purchase of American products.

Washington says China has not lived up to its commitment under the agreement to purchase $200 billion worth of US-made goods.

“Even with the phase one agreement in place, China’s government continues to pour billions of dollars into targeted industries and continues to shape its economy to the will of the state, hurting the interests of workers here in the US and around the world,” said Ms Tai.

Ms Tai said she intends to hold “frank conversations” with her Chinese counterpart, Vice Premier Liu He.

“That will include discussions over China’s performance under the phase one agreement, and we will also directly engage with China on its industrial policies,” said Ms Tai.

“Our objective is not to inflame trade tensions with China. Durable coexistence requires accountability and respect of the enormous consequences of our actions.”

Mr Trump first sparked a trade war with China – and several US allies – in 2018 by slapping tariffs on 58 per cent of Chinese imports into the United States.

The United States currently maintains tariffs on 66.4 per cent of Chinse imports, and China maintains tariffs on 58.3 per cent of US imports, according to data from the Peterson Institute for International Economics.

And while the Biden administration seems likely to keep the Trump-era tariffs in place for now, Ms Tai did say that her office will extend tariff exclusions for some goods.

Several US businesses had pushed for increased tariff exclusions, which exempts companies from certain tariffs if there is no available domestically produced alternative to a certain good.

“As our economic relationship with China evolves, so too must our tactics to defend our interests,” said Ms Tai.

Updated: October 04, 2021, 3:40 PM