October 18, 2021 | Policy Brief

U.S. Trade Representative Outlines Roadmap for China Trade Policy, But Provides Few Details

October 18, 2021 | Policy Brief

U.S. Trade Representative Outlines Roadmap for China Trade Policy, But Provides Few Details

U.S. Trade Representative (USTR) Katherine Tai announced during a speech last week an initial roadmap for managing trade disputes with China. However, Tai’s address, which followed a lengthy internal policy review, disclosed little about how the Biden administration intends to hold China accountable for its failure to live up to its existing trade obligations.

“For too long,” Tai remarked, “China’s lack of adherence to global trading norms has undercut the prosperity of Americans and others around the world.” Yet Tai did not elaborate on any plans to counter structural imbalances in the U.S.-China relationship. While Tai noted that the United States has fallen behind in steel, solar panel, agricultural, and semiconductor production, she largely refrained from specifying where China has fallen short in its bilateral obligations.

Tai did note that China has not upheld its commitments outlined in a phase-one trade agreement from 2020. Tai said the United States will “work to enforce the terms of phase one,” which preserves tariffs on China, and will “use the full range of tools we have, and develop new tools as needed.” In this sense, although President Joe Biden decried his predecessor’s use of tariffs against China, he appears intent on pursuing a similar approach in his own dealings with Beijing.

Yet besides mentioning the need for “unilateral U.S. pressure” and deferring to lawyers when asked about initiating a new Section 301 investigation, which would determine whether China’s policies discriminate against U.S. commerce, Tai said little about what specific “new tools” the administration is considering. When pressed for additional details during a Q&A session, Tai could not say more other than, “We are working on plans. I can tell you that.”

Tai also presented contradictory messaging regarding the efficacy of trying to alter China’s trade behavior. For instance, Tai said she would engage in “frank conversations with [her] counterpart in China.” But she also expressed pessimism that doing so would affect Beijing’s strategic calculus, noting, “It is increasingly clear that China’s plans do not include meaningful reforms.” These and other inconsistencies raise questions about what Tai intends to achieve through bilateral exchanges with Beijing.

Also notably absent from Tai’s speech was a discussion about reform of the World Trade Organization (WTO), including whether or how the administration intends to resolve longstanding problems with the WTO’s dispute settlement system. Moreover, Tai avoided commenting on the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), including whether the United States should consider joining it as part of a campaign to strengthen America’s economic leverage in the region. In light of China’s recent efforts to accede to the CPTPP, Congress should hold hearings about the merits of CPTPP membership and provide its own input on the USTR’s nascent trade strategy.

In an attempt to distinguish Biden’s trade strategy from his predecessor’s, Tai also stressed the importance of U.S. allies, promising that the administration “will work closely with our allies and likeminded partners towards building truly fair international trade.” She added that Washington seeks to “strengthen our alliances through bilateral, regional, and multilateral engagement.” But she said nothing about what this engagement would look like in practice.

In fact, after nearly 10 months in office, Biden has yet to hold bilateral engagements with any Southeast Asian leaders — a fact that has certainly not gone unnoticed in the region. As White House Indo-Pacific Coordinator Kurt Campbell has said, “For an effective Asia strategy, for an effective Indo-Pacific approach, you must do more in Southeast Asia.”

Addressing this issue, along with China’s abusive trade policies, will be key to the administration’s ultimate success or failure in stifling Beijing’s hegemonic ambitions.

Zane Zovak is a research analyst at the Foundation for Defense of Democracies (FDD), where Craig Singleton, a national security expert and former U.S. diplomat, is an adjunct fellow. They both contribute to FDD’s China Program and Center on Economic and Financial Power (CEFP). For more analysis from the authors, the China Program, and CEFP, please subscribe HERE. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.