Prof. ST Hsieh
Director, US-China Energy Industry Forum
626-376-7460
February 1, 2022
Happy New Lunar Year of Tiger. While the world is fixated with the US-Russia confrontation over Ukraine, the US-China trade relation is not moving forward. The following news report quoted the United States Trade Representative Katherine Tai saying that “Trade relations between Washington and Beijing are at a “difficult” stage.”
It is not easy to appreciate that, after one-full year of Biden Administration, the US-China trade relation is still difficult, means not moving forward. Specifically, the United States entered 2021 with a newly elected President Joe Biden. It was clear from the beginning that the key issue for the new president would be relations with the People’s Republic of China (PRC). The perspective of bilateral relations between the United States and China, there was supposed to be a “new opening”. Right now, there is absolutely no major development or expectation between the US and China, especially in terms of trade.
Certainly, the COVID-19 pandemic is a major roadblock constrained diplomatic engagements. The US and China did manage a few face-to-face encounters and a virtual summit between President Biden and President Xi. Clearly, these encounters only harden each party’s positions rather than open any new doors. There were three bilateral working teams established: security, trade, and military. These teams are at the” working level” for maintaining routine contacts so they are not in-charge of any negotiations for moving forward.
It is critical to recognize that the US-China Phase-One Trade Agreement was a hand-shake deal made by President Trump and President Xi. Now the US has had the (new) President Biden administration since January 2021, it is not too much to ask for a new hand-shake trade deal made by President Biden and President Xi. Unfortunately, so far, they have had no chance for focused discussions on trades.
The USTR is still reviewing the US-China trade policy and the US has not revealed to the public Biden’s “China Strategy.” It means that the US administration is not yet ready to fully engage China for a “reset” of bilateral relation. Unfortunately, there is no time to waste or wait. The US is already bogged down by her domestic politics and political agenda: the mid-term election is heating up day by day. The pressure on President Biden is that his party may lose the majority control of the House, Senate, or both. Either way it means, after November 2022 (ten months away), President Biden could be a lamb duck with little political chips to advance his agenda. China has her active political calendar in 2022 with a general party convention and re-shuffling of key personnel.
However, the US-China trade relation can improve. If the US and China leadership can realize the trade benefits to their nations and to the world and take actions personally to manage the bilateral relation with practical approaches. Or, at least, they can appreciate the detrimental impacts of US-China conflict to the world.
With our best hope, the world may emerge from the shadow of the COVID-19 pandemic in 2022. But the global economy desperately needs to recover from three years of Pandemic. There is no hope for the world economy if US and China are still engaging trade wars.
US-China trade relations in ‘difficult’ stage: Tai
Mon, January 31, 2022, 12:55 PM
Trade relations between Washington and Beijing are at a “difficult” stage but President Biden’s administration is committed to protecting the US economy from negative impacts of China’s policies, the top American trade official said Monday.
United States Trade Representative Katherine Tai said her team will “engage robustly” with China in ongoing talks over Beijing’s commitments to buy American goods under a deal signed under former president Donald Trump.
“We’re in a very difficult stage of this trade relationship,” Tai said, adding that “the conversations are not easy.”
The two countries signed a so-called “phase one” agreement in January 2020, in which Beijing pledged to increase its purchases of American products and services by at least $200 billion over 2020 and 2021.
But amid the Covid-19 pandemic, Beijing has fallen fall short of those targets.
Calling the relationship “one of the defining issues we work on,” Tai said she has started the “step one” discussions with China on the trade deal but they have not yielded results as yet.
The administration’s broader aim is to “defend the American economy, our workers and our businesses from the negative impacts” of China’s nonmarket policies, she said in a fireside chat with the National Asian Pacific American Bar Association.
Biden recently said he is not yet ready to remove the tariffs his predecessor imposed in 2018 on Chinese products worth $370 billion, citing “unfair” trade practices.
In her comments Monday, Tai also said she is “heartened” by the prospects of reforming the World Trade Organization.
She pointed to a “universal commitment… that the WTO as an institution is important, and deserves our attention.”
The Trump administration paralyzed the WTO’s dispute resolution body, but Tai pledged the US would take a leadership role in the reform effort.
“We might have different visions about what we would like the WTO to be specifically, but let’s engage in that process,” she said.
STH: WTO is an organization that the US has to fully “reengage” after Trump’s actions. US pledges to take a leadership role in the leadership role will have to be proven by solid and consistent actions. How the US can assure the world that after 2024, the US will keep the “universal commitment?” Especially, how the US can prevent a Trump rerun in 2024?