China’s ‘unfair’ trade practices, ‘distortions’ in focus with US to stress economic independence
China’s ‘unfair’ trade practices, ‘distortions’ in focus with US to stress economic independence
- When US Trade Representative Katherine Tai speaks to the House of Representatives, it is expected to mark a significant shift in Washington’s approach to China
- ‘Strategic investments’ in the United States could help it no longer depend on China
The United States should focus on achieving economic independence from China rather than pressuring Beijing to change “unfair” trade practices, US Trade Representative Katherine Tai will suggest on Wednesday, marking a shift in strategy toward the Asian giant.
The new approach takes into account Washington’s inability to force fundamental changes in business practices under a trade agreement signed by the previous administration, she will argue, according to an advance copy of her speech shared with the media.
“While we continue to keep the door open to conversations with China … we also need to acknowledge the agreement’s limitations, and turn the page on the old playbook with China, which focused on changing its behaviour,” she will tell the House of Representatives.
The phase-one trade deal, signed by former president Donald Trump, went into effect in early 2020 and expired at the end of last year.
In her appearance before the US Congress, Tai will stress that the strategy must now “expand beyond only pressing China” into abandoning trade practices that Washington deems unfair.
The new approach must “include vigorously defending our values and economic interests from the negative impacts of the PRC’s unfair economic policies and practices,” she will say, using the acronym for the People’s Republic of China.
When she joined the administration of President Joe Biden in early 2021, Tai asked her staff to analyse the impact of these practices on US industry and workers, as well as on those of US allies.
“We have seen what happened in the steel and solar industries when existing mechanisms were too slow or ill-suited to effectively address the distortions wrought by China’s targeting of those sectors,” she will say.
While China is also targeting critical industries such as hi-tech, electric cars and semiconductors, Tai is advocating for “strategic investments” in the US to help it no longer depend on China.
In her opinion, “significant progress” has already been made in the American Rescue Plan that helped businesses hit by the coronavirus pandemic, and in the emphasis it placed on making supply chains more resilient.
“But to truly boost America’s competitiveness, we urge Congress to quickly pass the Bipartisan Innovation Act,” she will say, referring to a bill that would, among other things, facilitate the production of crucial technologies.
