The Biden administration began defining its China trade policy Monday, saying it aims to launch new talks with Beijing but will keep existing tariffs in place, while also restoring the ability of U.S. importers to seek exemptions from those levies.
The new policy, outlined by U.S. Trade Representative Katherine Tai on Monday, largely builds on the China trade policy initiated by former President Donald Trump, who launched the biggest trade war since the 1930s in an attempt to get China to buy more U.S. goods and to stop it from pressuring American companies to hand over their trade secrets.
Ms. Tai said the U.S. would press China to carry out pledges it made as part of the Phase One accord signed in January 2020—including by maintaining steep tariffs put in place by Mr. Trump on what is currently about half of China’s exports to the U.S. But she said there were no plans to launch an investigation into Chinese trade practices, which had been under discussion within the administration.
“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,” Ms. Tai said in a speech at the Center for Strategic and International Studies, a Washington think tank.
At the same time, she said, the U.S. will reopen a process for U.S. companies to seek exemptions from tariffs. That exemption process ended after President Biden took office, drawing complaints from manufacturers and others who say they have no cost-effective alternatives to certain Chinese components.
Taking questions after her speech, Ms. Tai said the U.S. wouldn’t take any specific new actions until after she has talked with her Chinese counterpart, Chinese Vice Premier Liu He.
She declined, for instance, to start enforcement action allowed under the Phase One deal. She also deferred for now an administration plan to start a trade action aimed at getting China to reduce its use of industrial subsidies. In her talk she said such subsidies have hurt the U.S. steel and solar-panel industries.
“She offered a reasonable synopsis of the shortcomings of China’s implementation of commitments” under the Phase One deal, said Daniel Rosen, a partner in Rhodium Group, a China research group. “But as concerns a way forward, she didn’t offer any specifics.”
In keeping the tariffs, “this administration is learning some of the same lessons we learned over the course of four years,” said Kelly Ann Shaw, a senior trade adviser in the Trump White House who is now a partner in the international trade practice at law firm Hogan Lovells. “Tariffs are a blunt instrument but seem to be the only tool we have. “
Ms. Tai’s remarks were received in Beijing with a mix of relief and caution. Some officials saw positive signs in that she didn’t outright accuse China of failing to meet the Phase One agreement and wants to restart trade talks with her Chinese counterpart. China’s Embassy in Washington didn’t respond to a request for comment on Monday.