A group of America’s most influential business groups is urging the Biden administration to resume trade talks with China and cut tariffs on Chinese-made goods that remained in place after the start of the destructive trade war between the two countries.
The groups, representing diverse interests such as potato growers, microchip companies and the pharmaceutical industry, said in a letter Thursday that the Biden administration should take “quick action” to tackle the “troublesome” tariffs. They also called on the White House to work with the Chinese government to ensure it honors commitments made in the trade truce with the Trump administration, which was sealed in early 2020.
The letter, addressed to the Treasury Department and the United States Trade Representative, comes as relations between the world’s two largest economies remain tense. A high-profile visit to China last month by Deputy Secretary of State Wendy R. Sherman began with sharp opening remarks from the Chinese side and ended with little sign of progress. The two have argued over human rights, cyber-attacks and China’s military operations in the South China Sea.
While the Biden administration has mapped out a strategy of confrontation with China on a range of issues, it has said less about the countries’ economic relationship.
It is more than seven months into a review of the trade deal that former President Donald J. Trump signed with China in January 2020, along with other national security measures from the previous administration. Officials have not yet released the results of that investigation.
The January 2020 trade truce essentially froze US tariffs on $360 billion in Chinese imports. That deal also did nothing to stop the Chinese government’s subsidies to strategic industries such as computer chips and electric cars, which worried American competitors. While some provisions of the trade agreement expire at the end of the year, much of the agreement remains in effect.
The industry group’s letter appeared to be an attempt to push the Biden administration into action.
“Due to the tariffs, U.S. industries face higher costs to manufacture products and provide services domestically, making their exports of these products and services less competitive abroad,” the letter, which was reviewed by NewsMadura.
The Treasury Department and the United States Trade Representative did not immediately comment. The existence of the letter was previously reported by The Wall Street Journal.
The letter stated that China had fulfilled some of its obligations as part of the trade agreement, including new measures to open its market to US financial institutions. It added that further talks would be the only way to ensure China fulfills remaining commitments in other sectors, such as intellectual property protection.
Although China has been sourcing US goods on a large scale since the trade war, the amount and composition has fallen short of its commitments to buy US$200 billion worth of US goods and services by 2020 and 2021. According to analysis by the Peterson Institute for International Economics, China lagged 40 percent on those purchases last year and 30 percent this year.
“We strongly urge the government to work with the Chinese government to increase purchases of U.S. goods through the remainder of 2021 and implement all structural commitments of the agreement before the two-year anniversary on February 15, 2022 the letter added.
While the Biden administration questioned whether the trade deal with China was well designed, it has also indicated that it will continue to push China on what it considers unfair trade practices.
In June, President Biden expanded a Trump administration blacklist that prevented Americans from investing in Chinese companies that support the country’s military or oppress religious minorities. Mr Biden included Huawei, a Chinese telecommunications giant, on the list of banned companies. The White House also announced the formation of a trade and technology council with US and European officials, an effort to counter China’s influence by coordinating digital policies between Brussels and Washington.
“We will not hesitate to denounce China’s coercive and unfair trade practices that harm American workers, undermine the multilateral system or violate fundamental human rights,” United States Trade Representative Katherine Tai said in prepared testimony to a Senate hearing in May. “We are building a strong, strategic approach to our trade and economic relationship with China.”