U.S. Trade Representative Katherine Tai called for a change in how the United States trades with China and gave testimony to a U.S. House of Representatives committee, detailing problems noticed since the rise of the Chinese economy.
During her March 30 testimony, Tai argued that battling to change the behavior of the Chinese Government was a waste of time. Instead, she advocated for a defensive strategy, according to her testimony.
“While we continue to keep the door open to conversations with China, including on its Phase One commitments, we also need to acknowledge the agreement’s limitations and turn the page on the old playbook with China, which focused on changing its behavior,” she said. “Instead, our strategy must expand beyond only pressing China for change and include vigorously defending our values and economic interests from the negative impacts of the [People’s Republic of China’s] unfair economic policies and practices.”
Tai gave her opinion of the best strategy to move forward in trading with China. Her testimony before the U.S. House of Representatives Ways and Means Committee included her take on the success of current trade strategies.
In 2020, both countries signed the “phase one” trade agreement. Under the agreement, Washington agreed to ease off tariffs the Trump administration imposed 2 years earlier in exchange for China buying an additional $200 billion of American exports through 2021.
Tia said Beijing fell short of those targets when the COVID-19 pandemic struck. She told lawmakers that while the U.S. keeps the door open to conversations with China.
Washington’s trade war with China began with the belief that Beijing was subsidizing its goods to undermine the U.S. industry, said Katherine Tia. Her testimony claimed that under Biden, the U.S. forgave numerous trade tariffs. A recent decision ended the trade dispute with the United Kingdom over its steel and aluminum exports. The U.S. has sought to appease its allies affected by trade disputes in the late-2010s, according to Industry Week.
Industry Week reports Tai’s proposal for a defensive trade strategy with China has already begun in Congress. The U.S. trade realignment includes two new pieces of proposed legislation to impact the technology sector, which is affected by the arrival of cheap imports from Beijing. Tai said U.S. strategy must now “expand beyond only pressing China” into abandoning trade practices Washington views as unfair.
Shu Jueting, a spokeswoman for the Commerce Ministry in Beijing, said that cooperation between the two countries was the only viable option and that normal communications are being maintained, according to Investing.com.
“We hope the U.S. could adopt a practical and reasonable trade policy on China and work together with China to push forward a healthy and stable development of bilateral trade ties,” she said.
During Tai’s testimony, she talked about solar and steel industries, explaining that the U.S. acted too slowly to protect those industries from being overrun by Chinese products in the 2000s. Tai explained that realigning the U.S. trade policy toward China was the only way to avoid the persistent erosion of U.S. industries.
“To ensure that our industries remain competitive, we must develop new domestic tools targeted at defending our economic interests and make strategic investments in our economy,” Katherine Tai said. “We have already made significant progress through the American Rescue Plan, the [Biden] Administration’s focus on supply chain resilience, the Made in America Office, and the Bipartisan Infrastructure law. But to truly boost America’s competitiveness, we urge Congress to quickly pass the Bipartisan Innovation Act.”