U.S. Trade Representative Indicates New Playbook Is Needed For China

The U.S. Trade Representative has once again come down hard on China’s economic policies and practices, and their global effects.

The nation’s “20-year distortions” and its “state-centered and non-market trade practices” require that the U.S. develop strategic responses beyond defensive tariffs, Katherine Tai told a forum in late December.

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An uptick in low-priced Chinese imports has caused Americans to lose jobs and manufacturing capabilities to decline, Tai said, calling the impact “real and devastating.” The effects have hurt labor rights and environmental standards as well.

The U.S. government has typically responded with measures such as anti-dumping countervailing duties, but its tactics have not been able to ward off the “hollowing out” of certain American industries that are essential for national security. So, the U.S. must shift gears, said Tai.

“China’s growth and development over the past 20 years in particular has profoundly changed the global economy and created pressures and distortions that we need to correct for,” she said.

“That frame guides how we must responsibly manage this economic relationship,” Tai continued.

While President Biden and Chinese President Xi Jinping met in Indonesia in November, the relationship between the two countries is uneasy as an intense technology war continues.

In September, Tai said that punitive tariffs on imported Chinese goods would not diminish until China changed its ways and adopted more market-oriented trade and economic principles. Earlier, in July, the White House had considered reducing the tariffs to ease inflation. But 400 requests to keep them in place were logged with Tai’s office, many from pro-Biden trade unions.

In late December, the office announced it would extend China Section 301 tariff exclusions for another nine months on 352 Chinese import product categories. They were set to expire at the end of 2022.

Meanwhile, Tai said the United States was “looking for more choices” in using the Indo-Pacific Economic Framework to its benefit, given the integration with China of supply chains in the region.