Washington should focus on gaining economic independence from China instead of pressuring it to change its “unfair” trade practices, US Trade Representative (USTR) Katherine Tai said on Wednesday.
In a hearing before the House Ways and Means Committee, President Joe Biden’s commerce chief acknowledged that the strategy of imposing massive tariffs on Beijing, pioneered by former President Donald Trump, has had little or no effect.
“This has not incentivized China to change,” he said.
Washington has accused Beijing of subsidizing its exports and shutting down industries in both the United States and Europe, forcing companies to transfer technology in exchange for doing business in China and stealing intellectual property.
In 2020, both countries signed the “phase one” trade deal under which Washington agreed to ease tariffs that the Trump administration had imposed two years earlier, in exchange for China buying $200 billion in US exports through 2021.
But Beijing fell short of those goals due to the Covid-19 pandemic, with Tai telling lawmakers: “While we continue to keep the door open for talks with China … we also need to recognize the limitations of the deal and give turn the page of the old manual with China that focused on changing their behavior.
-Go beyond “pressure China”-
Since taking office in January 2021, Biden has resolved a series of trade disputes with US allies, including a deal announced last week to lift tariffs on British steel and aluminum that Trump had imposed.
But progress has not been similar with China, despite Tai’s renewed negotiations with his officials.
Last week, Washington agreed to extend tariff exemptions to 352 products imported from the Asian country after companies complained that such levies raised costs amid inflation facing the United States.
Tai stressed that the new approach must “include vigorous defense of our economic values and interests against the negative impact of China’s unfair economic policies and practices.”
While Beijing aims to conquer key sectors such as high-tech, electric cars and semiconductors, Tai advocated “strategic investments” from the United States that are no longer dependent on China.
The head of commerce asked legislators to approve the bipartisan Innovation Law, which would allocate 52,000 million dollars in production and research of nationally manufactured semiconductors, as well as incentives for manufacturing and strengthening supply chains
