US to have 'frank conversations' with China on trade
The United States said it will soon have "frank conversations" with China on trade as Washington believes the Asian giant has not honored its commitments under a 2020 agreement, but raising tensions between the economic powers is not the goal.
She also warned that President Joe Biden's administration is "prepared to deploy all tools and explore the development of new ones" to "protect ourselves against the waves of damage inflicted over the years through unfair competition."
Tai announced the launch of "a targeted tariff exclusion process" for exemptions from customs tariffs imposed on $370 billion worth of Chinese goods a year implemented under former president Donald Trump.
The punitive tariffs, imposed in retaliation for Chinese trade practices deemed "unfair," are criticized by many companies.
In August influential US business groups urged Biden to reduce the surcharges, pointing out that American industries faced "increased costs" as the tariffs are paid by importers.
A senior US official, speaking on condition of anonymity, said the tariffs "will remain in place" for the duration of the exemption procedure.
"We continue to have serious concerns with China's state-centered and non-market trade practices" that were not addressed in the "Phase One" agreement signed early last year to calm a trade war between the countries, Tai said.
"As we work to enforce the terms of Phase One, we will raise these broader policy concerns with Beijing."
The deal signed by Trump and Tai's opposite number, Vice Premier Liu He, committed Beijing to adding an extra $200 billion in purchases of US exports, including energy, agricultural and manufactured products through 2021.
That is far from happening, trade analysts say.
The Biden administration official did not specify the extent of the shortfall, while indicating that Washington is unsatisfied.
"There are some commitments that have not been met and we think the results overall of the agreement have been mixed," the official said, while stressing the US objective "is not to escalate trade tension."
Work with our allies
Tai's speech highlighted the administration's strategy of teaming up with allied democracies in its competition with China.
These include massive state subsidies for national companies, intellectual property theft and other factors creating a heavily uneven playing field.
"The core of our strategy is a commitment to ensuring we work with our allies to create fair and open markets," Tai said.
Tai also stressed that the US-China trade relationship "is one of profound consequence."
"As the two largest economies in the world, how we relate to each other does not just affect our two countries. It impacts the entire world and billions of workers."
Overall, Washington sees a bleak outlook, with the administration official saying "we know that China is unlikely to make meaningful reforms right now" and that there is no push for starting long-awaited Phase Two negotiations.
"Beijing is increasingly explicit that it is doubling down on its authoritarian, state-centric approach, and is resistant to addressing our structural concerns," the official said.
President of the National Foreign Trade Council Jake Colvin said Tai's remarks indicate "the Biden administration recognizes that decoupling is not an option" for the rival nations.
He called it "encouraging" to see "the outlines of a comprehensive strategy to engage China firmly and directly while giving American businesses and workers the tools they need to compete effectively in the global marketplace."