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3 min read . Updated: 16 Feb 2022, 07:41 PM IST New report says Biden administration is prepared to take action to address shortfall but doesn’t outline specific actions
The Biden administration faulted China for failing to meet its commitments to purchase U.S. goods under the 2020 trade deal, and said it was prepared to take further action to level the competitive playing field with Beijing.
China has “fallen far short of implementing its commitments to purchase U.S. goods and services in 2020 and 2021," the Office of the U.S. Trade Representative said in a report to Congress.
“To the extent that China’s unfair, nonmarket and distortive policies and practices persist, the United States is prepared to use domestic trade tools strategically as needed in order to achieve a more level playing field with China for U.S. workers and businesses," the report said.
The report stopped short of detailing any specific actions that it may take, however, nor did it provide any guidance as to how quickly the administration might act.
The assessment of the shortfall came in a report to Congress on China’s compliance with its international trade obligations and put forth some of the administration’s most detailed thinking on China yet.
The report criticized the terms of the 2020 trade deal brokered by the former Trump administration, saying it “did not meaningfully address the more fundamental concerns that the United States has with China’s state-led, nonmarket policies and practices and their harmful impact on the U.S. economy and U.S. workers and businesses."
The USTR said it would continue pressing China to fulfill its commitments under the deal. China missed its goals for purchasing U.S. agriculture, energy products and manufactured goods by well over $100 billion.
China implemented many of the deal’s commitments on other steps, such as opening its market to new agricultural products, U.S. financial services, but didn’t fulfill all of these commitments either.
“As an initial step, the United States is working to ensure that China lives up to its existing trade commitments, including the ones that China made in the Phase One Agreement," the USTR said. “It is important for the bilateral relationship to demonstrate that commitments matter."
The Chinese Embassy in Washington didn’t immediately respond to a request for comment. In the past, China has said its implementation of the deal was disrupted by the pandemic but that it was working to fulfill the commitments.
The USTR highlighted, in particular, that China didn’t undertake steps toward studying ractopamine, a feed additive widely used in the U.S. to make leaner pork and beef—but which is banned in China. The issue has long been a priority for U.S. meat exporters who say China’s acceptance of the additive would boost their industry.
The USTR also signaled it was prepared to take new actions to address China’s industrial policies that it says put U.S. competitors at a disadvantage.
Since last year, however, the Biden administration has been considering confronting China more directly over its use of massive industrial subsidies. The administration has been considering launching an investigation into Chinese subsidies under Section 301 of the U.S. trade law, which could lead to new tariffs.
The U.S. could also take more targeted actions such as modifying the existing tariffs against China or stepping up use of the existing system of antidumping and countervailing duty tariffs that can lead to duties on heavily subsidized goods.
A new Section 301 investigation, for example, requires a monthslong process and a detailed report on the trade practices of concern, before any new tariffs would actually be imposed.
The Trump administration also initially sought, but ultimately failed, to get China to make any changes in its subsidy practices as part of the Phase One deal it negotiated. Such issues were intended to be addressed in a Phase Two deal, but serious negotiations for a second phase didn’t begin during the Trump presidency and haven't been pursued by Biden.
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