Not ‘sitting on its hands,’ U.S. to up pressure on China, trade czar Tai says

By Andrea Shalal

WASHINGTON (Reuters) – America is finished “sitting on its arms” and can extra actively strain China, the world’s second largest financial system, to vary commerce practices that Washington believes distort the market, high U.S. commerce negotiator Katherine Tai mentioned.

Tai, a commerce lawyer and former congressional staffer appointed by President Joe Biden, inherited troublesome talks with Beijing over a “Section 1” commerce deal negotiated by former President Donald Trump.

In an interview with Reuters this week, Tai mentioned america was making ready a brand new method to China commerce coverage.

With out providing specifics, she mentioned Washington wanted new, more practical instruments to defend its financial pursuits and higher compete with China. New U.S. commerce investigations, which may lead to tariffs and even embargoes in opposition to China, could also be subsequent, sources conversant in the matter mentioned.

“We’re not going to cease pushing China and difficult China to reform and alter. However we will not afford to maintain sitting on our arms and ready for China to make its choice,” mentioned Tai, the primary Asian American within the job and a fluent Mandarin speaker.

“We’re going to want to show the web page on the playbook,” Tai mentioned.

A March report https://ustr.gov/websites/default/information/2022percent20Tradepercent20Policypercent20Agendapercent20andpercent202021percent20Annualpercent20Report.pdf from her workplace mentioned China had “doubled down on its dangerous commerce and financial abuses.” Beijing has failed to purchase a promised $200 billion in extra U.S. items and companies agreed within the deal.

China now faces warnings from america, the world’s largest financial system, to not help Russia’s invasion of Ukraine.

Within the yr since Tai turned commerce czar, some U.S. enterprise executives say they’ve been annoyed by the sluggish progress in punishing China. In the meantime, the U.S. items commerce deficit with China hit $355.3 billion in 2021, the most important recorded since 2018.

Tai acknowledged frustrations, however pointed to longstanding disputes that Washington has resolved with different international locations previously yr, exactly, she mentioned, to give attention to the larger threats China poses.

Washington settled a 17-year dispute over plane subsidies with the EU and Britain, and a four-year battle over U.S. metal and aluminum tariffs with the EU, Britain and Japan, she mentioned.

ALLIES, TARIFFS, CONGRESS

Tai in November revived a trilateral dialogue with the EU and Japan https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/november/joint-statement-trade-ministers-united-states-japan-and-european-union-after-trilateral-meeting begun by the Trump administration, in search of a joint method to China’s industrial subsidies and different “non-market insurance policies and practices,” aimed toward getting World Commerce Group help, a U.S. official mentioned.

Washington is contemplating a brand new Part 301 investigation into Chinese language industrial subsidies that would result in a contemporary spherical of tariffs or embargos, officers say.

The Biden administration may goal China’s violations of mental property protections beneath Part 337 of the Tariff Act of 1930, mentioned William Reinsch on the Middle for Strategic and Worldwide Research.

The U.S. Congress can be contemplating bipartisan laws that will bolster protections in opposition to commerce secret violations and expedite investigatory and exclusionary processes.

Tai, citing considerations about China’s use of compelled labor in its Xinjiang area, can be creating a first-ever USTR commerce technique on the subject.

Jamieson Greer, a accomplice with King & Spalding and former senior U.S. commerce official, mentioned Beijing’s response to the warfare in Ukraine had heightened Europe’s rising unease with China, including Western sanctions in opposition to Russia could present a playbook for future actions in opposition to China.

Tai mentioned a “one measurement matches all” method wouldn’t work.

“These are two completely different international locations, two completely different economies, two completely different conditions. And we actually conflate them at our peril,” she mentioned.

(Reporting by Andrea Shalal; extra reporting by David Lawder; Enhancing by Heather Timmons and Howard Goller)