The U.S. administration of President Joe Biden said Monday it will start talks with China soon to press the world's second-largest economy to comply with a bilateral trade deal signed by his predecessor Donald Trump, without ruling out the use of new tariffs.
Following a months-long review of trade policy with China, U.S. Trade Representative Katherine Tai said the "phase one" deal has not fully addressed concerns over China's unfair trade practices, while Beijing is falling short of some of its commitments included in the deal.
"Our analysis indicates that while commitments in certain areas have been met, and certain business interests have seen benefits, there have been shortfalls in others," she told an event organized by the Center for Strategic and International Studies, a Washington think tank.
Tai said she intends to have "frank" conversations with her Chinese counterpart "in the coming days," which will include discussions regarding China's performance under the phase-one agreement.
Her remarks came ahead of a looming deadline for China to meet its promise to increase its purchases of U.S. goods, such as farm products, and services by at least $200 billion for the two-year period through the end of 2021, as compared to 2017 levels.
China has also agreed to strengthen intellectual property protections and pursue financial services liberalization, while committing to address allegations of forced technology transfer and currency manipulation to boost exports.
Tai said the phase-one deal "stabilized the market," especially for U.S. agricultural exports.
"But the reality is, this agreement did not meaningfully address the fundamental concerns that we have with China's trade practices and their harmful impacts on the U.S. economy," she said.
The pact, which took effect in February last year, led to an immediate rollback of some of the U.S. tariffs imposed on China amid their trade war, which the Trump administration started as it sought to reduce the U.S. trade deficit with Beijing and rectify its concerns over intellectual property theft, forced technology transfers and other issues.
But the remaining punitive tariffs, affecting hundreds of billions of dollars' worth of Chinese products with a rate of up to 25 percent, have been left intact through the Biden administration.
A senior U.S. official said earlier that the Biden administration's objective is "not to escalate trade tensions with China" or "double down on the previous administration's flawed strategy."
Biden has been critical of Trump's unilateralist "America First" foreign and trade policy, which had undermined alliances and multilateralism while resulting in a bruising tit-for-tat tariff war between the United States and China.
While pursuing phase-one enforcement, the Biden administration will start a "targeted tariff exclusion process," indicating it will allow an exemption from the duties for specific imports. Such a process was created by the Trump administration but has expired, according to U.S. media.
U.S. officials said the Biden administration is not seeking a "phase two" negotiation, which the previous administration vowed to pursue to address more of the key U.S. concerns over China's economic practices, such as its extensive use of industrial subsidies.
Tai said she is not expecting China to conduct "meaningful reforms," but emphasized that she has "serious concerns" with China's state-centered and non-market trade practices left unaddressed in the phase-one deal.
"As we work to enforce the terms of phase one, we will raise these broader policy concerns with Beijing," she said, adding, "We will use the full range of tools we have and develop new tools as needed to defend American economic interests from harmful policies and practices."