Monday, October 18, 2021

Biden administration to offer ‘targeted tariff exclusion’ on Chinese goods

WASHINGTON – The Biden administration will announce its “new strategy” on trade relations with China on Monday, which will include tariff exclusions on some Chinese goods, according to senior administration officials.

US Trade Representative Catherine Tai plans to reveal the Biden administration’s China trade policy in a speech at a Washington think tank on Monday. His announcement will focus on bilateral trade agreements and tariffs on hundreds of billions of dollars of Chinese imports imposed by the previous administration.

“First of all, we do not aim to escalate trade tensions with China or double down on the flawed strategy of the previous administration,” a senior administration official told reporters during a conference call ahead of the announcement on Sunday.

As part of the new trade strategy, the Office of the US Trade Representative (USTR) will revisit the Phase One trade agreement signed between the United States and China in January last year and ask Beijing to abide by its commitments.

The Phase I trade deal signed during the Trump administration requires China to purchase additional US goods and services worth $200 billion during the two-year period of 2020 and 2021. An analysis of Chinese trade data by the Peterson Institute for International Economics showed that China met about 58 percent of its purchase commitments in 2020 and 69 percent by August 2021.

According to the Biden administration, the results of the agreement are mixed, with the agriculture sector benefiting the most from the agreement. Beijing has met about 92 percent of its import target in agriculture, but has failed to meet its commitments in manufactured goods and energy.

After a comprehensive review, the administration plans to use enforcement mechanisms under the agreement to ensure that China meets those commitments.

“Second, we will initiate a targeted tariff exclusion process. We will also keep the possibilities open for additional exclusion procedures in the future,” the official said.

President Joe Biden has maintained tariffs on nearly $360 billion worth of Chinese goods enacted by the previous administration.

But Biden officials believe the previous administration’s tariff campaign did not address China’s unfair trade practices and, instead, hurt select sectors of the economy.

While it is unclear which goods or sectors will benefit from the tariff exclusion process, the administration says it will “align existing tariffs” with its priorities, which aim to protect American workers and producers.

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“We will see how China responds to what Ambassador Tai will elaborate on tomorrow, and we will adjust accordingly,” the official said. “But we don’t want to take a choice off the table or box ourselves into an already determined course of action.”

The administration also said it recognized the fact that “China cannot change easily” and that “we have to devise a strategy that treats China the way we want to.”

The Trump administration had previously indicated that tariffs on Chinese goods were appropriate to address Beijing’s unfair trade policies, which included intellectual property theft, forced technology transfers and massive government subsidies for its companies.

During the signing of the phase one agreement, then-President Donald Trump said he would maintain the tariffs on Chinese goods as leverage for the next round of talks.

The Biden administration says it has no plans to pursue a second phase of the deal with Beijing.

“We will focus on the first phase of participation,” the senior administration official said. “We will express concern over industrial policies, but we are not seeking a second phase of negotiations.”

Biden has repeatedly indicated that his strategy would be to tackle China “from a position of strength” by building closer ties with domestic investments and allies as a way to address China’s unfair practices.

Ambassador Tai is expected to hold talks “soon” with his Chinese counterparts to discuss the trade deal and progress made in China’s industrial policies.

Companies and trade unions are pushing hard against tariffs imposed on Chinese goods. More than 6,000 US firms, including Ford, Tesla and Home Depot, filed lawsuits in the US Court of International Trade seeking to increase these tariffs.

The companies also sent a letter to Biden asking him to settle the lawsuit. He said the levies are “not tough on China” but “tough on American companies, American workers and consumers, who have paid these tariffs as taxes out of their own pockets.”

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Amell Akan is a White House economic policy reporter in Washington, DC, having previously worked in the financial sector as an investment banker at JPMorgan and an advisor at PwC. He graduated from Georgetown University with a master’s degree in business administration.

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This News Originally From – The Epoch Times

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