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USTR Katherine Tai vows to implement Section 1 deal

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U.S. Trade Representative Katherine Tai testifies before the Senate Finance Committee on Capitol Hill in Washington DC on May 12, 2021.

Pete Marovich | AFP | Getty Images

Washington must enforce the US-China Phase 1 trade deal and will raise broader political concerns about Beijing, US Trade Representative Katherine Tai said Monday, according to her press office.

“Today I am going to set out the starting point of our government’s strategic vision to realign our trade policy with China in order to defend the interests of American workers, businesses, farmers and producers and to strengthen our middle class,” the remarks made by the center read for strategic and international studies.

“China has made commitments to benefit certain American industries, including agriculture, that we must enforce,” Tai is likely to say.

CNBC reported last week that the top trade advisor would announce that Beijing has failed to honor the Phase 1 deal reached under the administration of former President Donald Trump.

Tai will deliver a speech on Monday outlining the Biden government’s Chinese trade strategy. She will speak at the Washington think tank, the Center for Strategic and International Studies, at 10 a.m. ET.

According to the prepared remarks, Tai will say the US has “serious concerns” about China’s “state-centered and non-market-oriented trade practices,” which were not addressed in the first phase of the deal.

“As we work to enforce the terms of the first phase, we will bring these broader political concerns to Beijing,” she will say.

Agreement on the first phase

In the trade deal signed in January 2020, Beijing pledged to buy at least $ 200 billion more US goods and services in 2020 and 2021 compared to 2017. The deal interrupted a trade war between the US and China that dragged on for about two years.

However, in August, China had only achieved 62% of that target, based on US export data compiled by the think tank Peterson Institute for International Economics.

A senior government official told reporters that US President Joe Biden believes the Phase I deal “did not usefully address our fundamental concerns about China’s trade practices.”

“Unlike his predecessor, President Biden will hold China accountable if China fails to meet its commitments,” the official said during a background call.

The US Trade Representative will say on Monday, “We will use the full range of tools we have and develop new tools as needed to Defend American business interests from harmful policies and practices. “

She is also expected to announce a targeted tariff exclusion process for businesses in the coming days to avoid fines and to have “open talks” with Chinese colleagues in the coming days.

US officials said during the background talk that the Phase 1 deal will be re-examined and that Washington will not seek negotiations on a Phase 2 deal.

“We recognize that China simply cannot change and that we must have a strategy that deals with China the way it is, not the way we want it to be,” said one official.

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