U.S. Trade Representative Katherine Tai came under fire from Republicans Wednesday for China's failure to meet its 2020 commitments to buy U.S. agricultural products, but she said the Biden administration has kept pressure on the Chinese leadership by maintaining Trump-era tariffs.
“We know that China is not living up to the purchase commitments that they made under the last administration and under President Trump's Phase One deal,” Sen. Marsha Blackburn, R-Tenn., told USTR Katherine Tai at a Senate Finance Committee hearing Wednesday. “So, what are you doing to hold China to account for those purchase commitments?”
“I think that we're staying very, very strong on not giving them more space,” Tai responded. “Over the course of the last three years, we have faced a lot of calls to release the tariffs on China.” But the U.S. has not seen any action from China that would merit a lifting of the tariffs, largely left in place since Donald Trump left office, she said.
Blackburn, however, wasn’t done. “We have cotton and soybean producers that are saying, ‘Hey, wait a minute. Who is going to stand up for us?’ And unfortunately, when they look at USTR and this administration, they don't see people that are going to bat for them, because you have had … no new [enforcement] cases.”
Tai made the same point she has made repeatedly, that the administration does not want U.S. farmers to lose business because of Chinese retaliation.
Saying Blackburn’s view of the situation is “a narrow way of looking at it,” Tai said, “We've also not brought more retaliation on our farmers…. That is a really important part of our trade policy, which is to continue to improve the export opportunities for our farmers.”
Trump’s January 2020 Phase One deal committed China to average at least $40 billion of purchases and imports of ag goods for two years, for a total of $80 billion. But analyses show China actually bought much less.
The overall agreement was larger than ag, but in the end, “China bought only 58 percent of the U.S. exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war,” the Peterson Institute for International Economics said in 2022. “Put differently, China bought none of the additional $200 billion of exports Trump's deal had promised.”
On the agriculture promise, in 2020 and 2021 “China’s imports of covered agricultural products from the United were $61.4 billion and U.S. exports were $61.1 billion. In the end, China's purchases of covered agricultural products reached 77% (Chinese imports) or 83% (U.S. exports) of the Phase one commitment,” the institute said.
Tai announced Wednesday that the administration would investigate claims of unfair practices in China’s shipbuilding industry. But Republican senators hammered Tai both on China and on the administration’s unwillingness to negotiate free-trade agreements that lower tariffs for U.S. producers seeking expanded markets.
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Answering Sen. John Cornyn, R-Texas, who asked when the administration had last brought a WTO complaint against China, Tai started to mention Wednesday’s shipbuilding announcement, but added that the U.S. has “in the past, taken lots of actions against China.”
When pressed by Cornyn on the Biden administration’s record on enforcement, however, Tai said, “It’s been ineffective, Sen. Cornyn. Which is why we no longer do the things that aren’t effective.”
China recently brought a WTO complaint complaining of the Inflation Reduction Act’s funding for electric vehicles.
Tai also assured senators from potato-producing states, including committee Chairman Ron Wyden, D-Ore., that USTR continues to push Japan to allow imports of U.S. table stock (also known as “fresh”) potatoes. She said USTR has raised the issues in all four meetings of the U.S.-Japan Partnership On Trade.
She added that “in the person of our very dynamic ambassador to Japan, [Rahm] Emanuel, USTR has the strongest and most active of partners in advancing this particular issue.”
On another subject, Tai said USTR would complete “very soon” its Section 301 investigation into China’s “unreasonable or discriminatory” acts, policies and practices in the areas of technology transfer, intellectual property and innovation.
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