U.S. trade representative Tai vows to enforce phase 1 trade deal with China

FAN Editor

US Trade Representative Katherine Tai testifies before the Senate Finance Committee on Capitol Hill in Washington, DC, on May 12, 2021.

Pete Marovich | AFP | Getty Images

Washington must enforce the U.S.-China phase one trade agreement and will raise broader policy concerns with Beijing, U.S. Trade Representative Katherine Tai will say on Monday, according to her press office.

“Today, I will lay out the starting point of our Administration’s strategic vision for realigning our trade policies towards China to defend the interests of America’s workers, businesses, farmers and producers, and strengthen our middle class,” according to remarks prepared for delivery at the Center for Strategic and International Studies.

“China made commitments intended to benefit certain American industries, including agriculture that we must enforce,” Tai is expected to say.

CNBC reported last week that the top trade advisor would announce that Beijing has not complied with the phase one deal that was reached under former President Donald Trump’s administration.

Tai is set to deliver a speech on Monday, outlining the Biden administration’s China trade strategy. She will be speaking at the Washington think-tank, the Center for Strategic and International Studies, at 10 a.m. ET.

According to the prepared remarks, Tai will say the U.S. has “serious concerns” about China’s “state-centered and non-market trade practices” that were not addressed in the phase one deal.

“As we work to enforce the terms of Phase One, we will raise these broader policy concerns with Beijing,” she will say.

Phase one agreement

In the trade deal, signed in January 2020, Beijing pledged to buy at least $200 billion more U.S. goods and services over 2020 and 2021, compared to 2017. The agreement paused a trade fight between the U.S. and China which dragged on for about two years.

As of August, however, China had only reached 62% of that target, based on U.S. export data compiled by think tank Peterson Institute for International Economics.

A senior administration official told reporters that U.S. President Joe Biden believes the phase one deal “did not meaningfully address our fundamental concerns with China’s trade practices.”

“Unlike his predecessor, President Biden is going to hold China to account where China is falling short of its commitments,” the official said during a background call.

The U.S. Trade Representative will say on Monday: “We will use the full range of tools we have and develop new tools as needed to defend American economic interests from harmful policies and practices.”

She is also expected to announce a targeted tariff exclusion process for firms to avoid punitive levies, and have “frank conversations” with Chinese counterparts in the coming days.

U.S. officials said during the background call that the phase one agreement will be revisited, and that Washington will not seek negotiations on a phase two deal.

“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,” an official said.

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