WASHINGTON — The Biden administration is waiting to see how leadership changes in China will affect the economic relationship between the countries, and will continue to defend American interests until Beijing undertakes reforms, the U.S. trade chief said.
“I think it’s really ‘wait and see’ and ‘to be determined,’” Trade Representative Katherine Tai said in an interview at Bloomberg’s Washington office Friday. “That is the question that everyone is asking right now, not just with respect to trade, but the entire relationship.”
For the next four months, Tai will continue to engage with her current counterpart, Vice Premier Liu He, she said. It’s not clear who Chinese President Xi Jinping will appoint to take over the portfolio and that change won’t occur until the National People’s Congress in March, Tai added.
While the White House is prepared for Beijing to intensify its control of the economy, Tai didn’t rule out the possibility that China could surprise the world with more market-based reforms. As the country goes through its transition of government, “nothing is predestined,” she said.
“We are prepared for a scenario where there is a doubling down, there is no movement on reform,” Tai said. But the U.S. is aware that it must also “be prepared for decisions that will be made that may surprise you,” she said, adding that the day “might not come anytime soon.”
Investors were spooked by the consolidation of power in Xi’s leadership ranks and his emphasis on promoting policies that further self-reliance in technology and other sectors.
Tai stressed that the Biden administration’s focus is on responsibly managing the relationship, and that Washington expects China to do its part as it’s focused on pushing Beijing to restructure its economy.
“We’ve got to be more assertive in defending our interests until the day that China and Beijing decide that it is time for a structural reform that brings their system into closer alignment with ours,” she said.
Her office continues to engage with Chinese officials on enforcement of the so-called Phase One trade deal the previous administration struck, she added.
President Joe Biden has been holding back on a decision to scrap any Trump-era tariffs on China imports, while the administration studies ways to help businesses seeking relief, Bloomberg News reported last month, citing people familiar with the matter.
The duties, which began piling up in 2018, span imports from industrial inputs, such as microchips and chemicals, to consumer merchandise including apparel and furniture. While there’s been no direct indication of which duties may be removed, senior administration officials have said reducing tariffs on household items could help ease a surge in the U.S. cost of living.
Former President Donald Trump imposed the duties using section 301 of the Trade Act of 1974. U.S. law states that the tariffs automatically expire four years after they were imposed, but on the eve of their sunset earlier this year, the USTR got hundreds of requests for them to remain, which is the case as it undertakes a review.
While the tariffs on Chinese goods are a holdover from Trump’s aggressive actions against Beijing, the Biden administration has kept them in place as a kind of leverage against what the U.S. sees as its key strategic and economic rival.
Biden and Xi are expected to meet face to face next month when both men are at the Group of 20 leaders’ summit in Asia, though plans haven’t been finalized.
Chinese Foreign Minister Wang Yi, newly appointed to the nation’s top decision-making body, officially greeted U.S. Ambassador Nicholas Burns on Friday, almost eight months after the envoy arrived in Beijing.
(Jacob Gu contributed to this report.)
