US-China trade relations strained, Biden team maintains Trump’s difficult stance

The prospects for trade relations between the US and China are likely to be challenged after this week’s high-level diplomatic talks showed that President Joe Biden’s team does not intend to abandon the Trump administration’s tough tone in talks with Beijing. .

Although Washington and Beijing have reached a ceasefire in their trade dispute with last year’s “phase one” agreement, representatives from both sides are still dissatisfied with the status quo and regard the other as a major economic competitor. .

That competition was fully visible on Thursday, when the states began two days of meetings in Anchorage, Alaska.

Foreign Minister Antony Blinken began his remarks by noting that the US would be deeply concerned about China’s actions, including cyberattacks on the United States in Xinjiang, Hong Kong, Taiwan. [and] economic coercion towards our allies. ‘

Yang Jiechi, director of the Central Communist Party’s Foreign Affairs Committee of the Chinese Communist Party, said the US “does not have the qualification to say it wants to talk to China from a strong position.”

Although the talks were seen more as a diplomatic exercise than an economic exercise, the thorny exchange is likely an early snapshot of the bitter battles ahead for the Biden trading team. And at stake is one of the most valuable trade relations in the world.

China is currently the United States’ third largest trading partner with $ 558.1 billion total (two-way) trade in 2019, according to the office of the USTR. The massive trade volume is expected to support 911,000 U.S. jobs as of 2015, with 601,000 due to merchandise exports and 309,000 from services exports.

China is also the third largest export market for American farmers and the annual trade in agricultural commodities amounted to $ 14 billion two years ago. China is the United States’ largest supplier of goods imports.

Clete Willems, a former World Trade Organization litigator at the USTR, told OilGasJobz on Friday that he was not surprised by the lack of progress in Anchorage.

Willems, who was once a member of Trump’s trading team and is now a current partner at law firm Akin Gump, said the Anchorage meetings are more of a chance to officially air complaints and less a realistic economic effort. remedy.

“I had low expectations for Alaska and it was met,” Willems, tongue in cheek, said of the talks.

“I think [the Chinese government] misread the situation with the Biden team, and they thought these guys would roll in all the Trump measures, “he added. I think they’re finding out that’s not going to be the case. But I think they should hear it directly from Blinken. ‘

The trade negotiations with China are of commercial importance, but are also an opportunity to protect US national security interests and facilitate access to critical technologies.

Weeks before the meetings in Anchorage, Alaska, the Biden government drafted an executive order directing government departments to review key supply chains, including those for semiconductors, high-capacity batteries, medical supplies and rare earths.

“The Biden administration has indicated that trade is not their position at all costs and that they will not limit their views and backlash to human rights or national security (for example) to have a ‘good’ trade relationship,” he said. Dewardric McNeal, an Obama-era policy analyst at the Department of Defense, said in an email Friday.

Although China’s name was not mentioned by Biden, it ordered agencies to review gaps in local manufacturing and supply chains that are dominated by “countries that will become unfriendly or unstable or dominated”.

The directive was widely regarded as China, one of the largest exporters of rare earth metals, a group of materials used in the manufacture of computer monitors, modern weapons and electric vehicles.

US Secretary of State Antony Blinken (2nd R) talks to National Security Adviser Jake Sullivan (R) as he faces Yang Jiechi (2nd L), director of the Central Commission on Foreign Affairs, and Wang Yi (L), China’s foreign minister during the opening session of US and China talks at the Captain Cook Hotel in Anchorage, Alaska, on March 18, 2021.

Frederic J. Brown | AFP | Getty Images

Yet Chinese negotiators, including Foreign Minister Wang Yi, could have hoped for a warmer reception from Blinken after a turbulent four years under President Donald Trump and his top diplomat, Mike Pompeo.

The Trump administration has made a habit of imposing punitive tariffs and sanctions to address persistent complaints about China’s lack of intellectual property protection, required technology transfers and other unfair business practices.

“The Biden team understands the complex interrelationships between trade and commerce between the two countries and hopes to be more purposeful and predictable in identifying and managing issues and issues (more surgical and less totally destructive) in competition and in collaboration, “McNeal said. , a senior policy analyst at Longview Global, added Friday.

As of Friday afternoon, the U.S. team in Alaska has taken no steps to ease U.S. sales to Chinese businesses, including telecommunications giant Huawei, relax visa restrictions on Communist Party members or reopen the Chinese consulate in Houston.

Negotiations with Beijing are likely to be a top priority for newly confirmed US trade representative Katherine Tai.

The unanimous vote of the Senate to confirm her nomination, a first for the Biden government, reflects the dual belief in her ability as a knowledgeable and trained commercial lawyer.

“Katherine Tai is just the kind of qualified and mainstream person who is able to serve President Biden and the country fairly well,” Senate minority leader Mitch McConnell said on the Senate floor ahead of the confirmation of the vote earlier in March.

Katherine C. Tai addresses the hearings of the Senate Finance Committee to examine her appointment as United States Trade Representative, with the rank of Ambassador, in Washington, DC on February 25, 2021.

Bill O’Leary | Swimming Pool | Reuters

Tai will soon face a number of trade disputes fueled by the Trump administration, but is expected to make talks with Beijing a top priority.

She and her team are expected to review Trump’s ongoing policies, including duties on Chinese steel, aluminum and consumer goods, as well as components of the Phase One agreement.

“She knows how to be tough on China and she knows how to do it in cooperation with others,” said Willems, who previously represented the United States at the WTO with Tai. He added that it would be important for Tai to be sure that he would serve a voice for US trade interests in a government with a deep diplomatic bank.

“You have an administration with a very strong Secretary of State, very strong national security advisers, who are very close to President Biden and who use a lot of oxygen for US policy in general. And she will have to pass that.”

OilGasJobz’s Nate Rattner and Yen Nee Lee reported.

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