The United States Trade Representative (USTR) Katherine Tai raised concerns about China’s state-led economic policies in a meeting with China’s Commerce Minister Wang Wentao last Friday, with the Chinese counterpart objecting to US tariffs and trade policies. Despite this, both sides emphasized the importance of maintaining communication on trade. The US Trade Representative’s office stated that Tai emphasized the need to address the critical imbalances caused by China’s state-led, non-market approach to the economy and trade policy. Tai also raised concerns about the actions taken by the People’s Republic of China (PRC) against US companies that operated in the country.
China’s Commerce Ministry said in a statement that Wang raised complaints about US economic and trade policies toward China, including US tariffs on Chinese goods and economic and trade issues related to Taiwan. China also complained about the US-led Indo-Pacific Economic Framework (IPEF), which excludes China. Tai, who will hold a ministerial meeting of countries in the IPEF talks on Saturday, has been emphasizing objections to China’s attempts to dominate certain industries using massive state subsidies. She said that such issues continue to come up in the relationship.
The USTR is conducting a four-year review of US tariffs on hundreds of billions of dollars’ worth of Chinese imports, imposed in 2018 and 2019 by the Trump administration. Tai was asked during a press conference whether the US would resort to using further trade tools to address China’s practices, such as a new “Section 301” investigation that could lead to more US tariffs. In response, Tai said that “aspects” of the Biden administration’s response were already evident in US economic policies. She emphasized the importance of sitting down and having a conversation with the Beijing interlocutors to understand each other’s economies better.
The meetings between Wang and Tai, and Wang and US Commerce Secretary Gina Raimondo in Washington, were the first Cabinet-level exchanges in months between US and Chinese officials, following a series of setbacks that raised tensions between the world’s two largest economies. Tai stressed the importance of maintaining open lines of communication between Washington and Beijing.
U.S. President Joe Biden and Chinese President Xi Jinping pledged more frequent communications at a Group of 20 summit in Indonesia last November to avoid tensions between the two countries from escalating into a new cold war. However, these plans suffered several setbacks, starting with the downing of a suspected Chinese spy balloon in U.S. coastal waters. These irritants continued through last Sunday, when Group of Seven leaders pledged to resist China’s “economic coercion,” and Beijing responded by declaring the US memory chip maker Micron Technology a national security risk, banning its sales to major domestic industries.
In summary, the US Trade Representative highlighted concerns while meeting with China’s Commerce Minister, and China also objected to US policies towards China that included tariffs on Chinese goods, risks related to Taiwan, and on the US-led Indo-Pacific Economic Framework that excludes China. Despite these differences, the US and China emphasized the need for open communication. US President Joe Biden and Chinese President Xi Jinping pledged more frequent communication to avoid tensions from escalating, but incidents have continued to raise tensions between the two countries.
