US to take hard line on Chinese trade practices: administration

White House said it is committed to using tariffs and other tools to combat alleged unfair trade practices by Beijing.

Tariffs remain on about $US370bon in annual imports from China, which the Biden administration is expected to retain as leverage. Picture: AFP

The Biden administration says it will use “all available tools” to respond to alleged unfair trading practices by Beijing as it conducts a comprehensive review of its trade policy with China.

Releasing its first trade agenda on Tuesday AEDT, the administration said it was committed to using tariffs and other tools to combat alleged unfair trade practices by China, including unfair subsidies to favoured industries and use of forced labour that targets Uighurs and other ethnic minorities.

“The Biden administration recognises that China’s coercive and unfair trade practices harm American workers, threaten our technological edge, weaken our supply-chain resiliency and undermine our national interests,” it said. “Addressing the China challenge will require a comprehensive strategy and more systematic approach.”

Beijing has defended its trade practices and its treatment of ­Uighurs, which it says is aimed at preventing terrorist attacks.

Under former president Don­ald Trump, the US negotiated a trade agreement that calls for China to increase its purchases of US goods and services by $US200bn ($257bn) over two years, open its financial markets and ease pressure on US firms to hand over technology.

Since that deal was signed a ­little over a year ago, however, China has fallen behind target for US purchases, in part because of the economic fallout from the COVID-19 pandemic.

Tariffs remain on about $US370bn in annual imports from China, which the Biden administration is expected to retain as leverage to force Beijing to comply with the terms of the deal.

Officials at the Chinese Embassy in Washington did not respond to a request for comment.

Congress requires the president to issue a trade agenda and report annually, which gives the administration a chance to explain its trade policy in detail.

In the new report, the administration said its “worker-centred” trade policy, pledged earlier by President Joe Biden, would feature “extensive engagement” with unions and other worker advocates. Past trade policies would be reviewed for their impact on workers, and labour obligations in existing trade agreements would be fully enforced, it said.

In particular, the administration is committed to using a new mechanism designed to rapidly address violations of labour standards under the US-Mexico-Canada Agreement (USMCA). The agreement was renegotiated by the Trump administration and congress to upgrade the terms of the North American Free Trade Agreement.

“Under the Biden administration, workers will have a seat at the table in the development of trade policies,” the administration said. “Trading partners will not be ­allowed to gain a competitive ­advantage by violating workers’ rights and pursuing unfair trade practices.”

The administration said it would fight alleged currency ­manipulation by other nations seeking to gain a trade advantage through joint efforts between the Office of the US Trade Representative and the Treasury and Commerce departments.

As part of the Biden administration’s broader strategy to address climate change, its trade agenda will include the negotiation and implementation of strong environmental standards in areas such as fisheries, logging and wildlife trafficking.

The report was released by the USTR as Katherine Tai, Mr Biden’s nominee to lead the office, awaits Senate confirmation.

At her confirmation hearing last week, Ms Tai said she would explore “every possible option available” to address the US’s longstanding concerns with China’s intellectual-property theft and inadequate market access.

Ms Tai is a former USTR enforcement lawyer with expertise on China. She was most recently the chief trade counsel for the House of Representatives ways and means committee, and is expected to be confirmed as Mr Biden’s trade chief within the next week or so.

In the new report, the administration said its trade policy was an essential component of Mr Biden’s top policy priorities: fighting the pandemic and ensuring economic recovery. To ensure the country was better prepared for future public health crises, the development and reinforcement of manufacturing supply chains through domestic investment and innovation would be central to the administration’s trade agenda this year.

The report also said the Biden administration would work closely with allies to restore Washington’s leadership in global efforts to tackle labour issues, climate change and unfair trade practices. It would re-engage with the World Trade Organisation to implement necessary reforms, the administration said.

The Wall Street Journal