U.S. trade chief Tai says U.S. faces 'very large
challenges' on China
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[May 27, 2021] By
David Lawder and Andrea Shalal
WASHINGTON/
BEIJING (Reuters) -U.S. Trade
Representative Katherine Tai said on Wednesday that the United States
still faces "very large challenges" in its trade and economic
relationship with China that require the Biden administration's
attention across the board.
Tai spoke with Reuters in an interview before her first virtual call
with Chinese Vice Premier Liu He, a meeting in which she raised "issues
of concern," according to her office.
"During their candid exchange, Ambassador Tai discussed the guiding
principles of the Biden-Harris administration’s worker-centered trade
policy and her ongoing review of the U.S.-China trade relationship,
while also raising issues of concern," the USTR said.
China's commerce ministry described the talks as "a candid, pragmatic
and constructive exchange".
"Both sides view the development of bilateral trade as very important.
(Both sides) exchanged views on issues of mutual concern and agreed to
maintain communication."

The meeting marked the first formal engagement between the trade chiefs
of the world's two largest economies since U.S. President Joe Biden took
office in January.
It came at a time when Biden has sharply criticized China on human
rights abuses and sought to rally his Group of Seven rich nation allies
to form a united front on China.
China's handling of the COVID-19 pandemic - which has now killed more
than 3 million people worldwide - has also rankled the United States and
its allies.
Biden on Wednesday ordered aides to investigate rival theories held by
U.S. intelligence agencies on the origin of the virus, including the
possibility of a laboratory accident in China. China said it supported a
'thorough investigation' but warned the United States to avoid
politicizing the issue.
The Biden administration is conducting a comprehensive review of
U.S.-China trade policy, ahead of the expiry of the Phase 1 deal at the
end of 2021.
CHALLENGES 'STILL THERE'
Tai told Reuters the Phase 1 trade deal was important but only part of a
complex relationship.
"The overall challenges that we have with China are also still there and
they are very large," Tai said.
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U.S. Trade Representative Katherine Tai testifies before the Senate
Finance Committee on Capitol Hill in Washington, U.S., May 12, 2021.
Pete Marovich/Pool via REUTERS

Tai said the Phase 1 trade deal should be seen in the context of "the
overall U.S.-China trade, and economic relationship which is very, very
challenging. And requires our attention all across the board."
The two countries signed the trade deal in January 2020 - just before
the COVID-19 pandemic began. It calls for China to increase purchases of
U.S. agricultural goods, manufactured products, energy and services by
$200 billion over 2020 and 2021, compared with a 2017 baseline.
The deal eased a two-year tariff war between the United States and China
waged by former President Donald Trump that aimed to change China's
trade practices, although duties remain in place on hundreds of billions
of dollars of trade.
The Biden administration has promised a similarly muscular pushback on
China's state-driven economic model, with new investments in innovation
to maintain a U.S. technological edge.
China fell about 40% short of its purchase targets in 2020, and is still
lagging in its imports in 2021, with just seven months to go in the
two-year deal.
Through 2020, China's total imports of covered products from the United
States were $99.9 billion, compared with the commitment of $173.1
billion, according to the Peterson Institute for International
Economics.

China also agreed to ease barriers in its financial services sector and
agricultural biotechnology regulations, as well as to take steps to
protect U.S. intellectual property.
The deal failed to address fundamental U.S. concerns about technology
transfer and massive subsidies for state-owned enterprises - issues that
the Trump administration had said it would address in a second phase
trade agreement.
(Reporting by David Lawder and Andrea Shalal; Additional reporting by
Lusha Zhang and Ryan Wu in Beijing, Editing by Michael Perry, Robert
Birsel)
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