The Biden administration will place the trade deal with China under Donald Trump’s control, while the United States’ broader relationship with Beijing is assessed, the White House said on Friday.
The ‘phase 1’ trade deal signed in early 2020 ended a rapidly escalating trade war between Washington and Beijing that had rocked global markets and led to multibillion-dollar tariffs on goods. exchanged.
According to the treat, whose scope is widely seen as limited, China has pledged to significantly increase its purchases of US products such as soybeans and energy products.
However, China also fight to keep pace with its purchasing commitments, leading business analysts to question whether promises to buy a targeted amount of U.S. products can be kept.
When asked if Joe Biden considers the Phase 1 trade deal to be still in effect, White House press secretary Jen Psaki said on Friday that “everything the previous administration has put in place is under review ”.
“I’m not assuming things are progressing,” Ms. Psaki said. “We’re just looking at what the way forward looks like, and doing it, again, from a position of strength, which means coordinating with our allies, members of Congress and making a decision before we commit further.
Under the deal, China agreed to buy $ 200 billion more in U.S. goods and services than in 2017, before the trade dispute began, over a two-year period until the end of 2021. .
However, Chinese and US trade data shows that Chinese purchases of US goods are far behind unofficial pro-rata targets one year after the deal goes into effect.
According to an analysis by the Peterson Institute for International Economics, Beijing only bought 58% of US exports expected according to its projections, based on data at the end of last month.
Chinese imports of U.S. products covered by the trade deal’s purchase commitments amounted to $ 100 billion at the end of December, against a prorated target of $ 173.1 billion, the institute said.
The deficit presents a challenge for the Biden administration as it decided how much of the Trump administration’s trade policy on China should it maintain, including whether to retain U.S. tariffs on billions of dollars in Chinese imports?
Robert Lighthizer, who as Donald Trump’s chief trade official oversaw U.S. trade talks with Chinese officials, said earlier this month that the phase 1 offer contained more than just purchase commitments, citing changes in intellectual property protections and new rules on the forced transfer of technology.
Nonetheless, the deal came under sustained political pressure, especially from Mr. Trump who, before stepping down, threatened Beijing with even more tariffs.
In a speech this month, Katherine Tai, the new US trade representative, said that “strengthening competition from a growing and ambitious China” would be one of the most important questions in her brief.
Additional reporting by Lauren Fedor