U.S. President Joe Biden’s administration has issued a policy document on the strategy of realignment of trade with China, a sign that tension between the world’s two largest economies is not abating. The 2024 Trade Policy Agenda and 2023 Annual Report to Congress released by the Office of U.S. Trade Representative Katherine Tai, sought continued action against “harms wrought” by what it called Beijing’s “trade and economic abuses”. “We are also considering all existing tools – and will seek new ones as needed,” the report said, contending that actions so far had allowed the U.S. to “engage and compete” with Beijing “from a position of strength”. The U.S. accuses China of maintaining a non-market economy that it seeks to use as leverage to distort competitive markets and concentrate supply chains under its control through massive state subsidies. Washington has tied these concerns to national security, most recently when President Biden ordered an investigation into potential threats posed by China-made electric vehicles. The move brings with it the possibility of future restrictions.
In recent years, Washington has also enacted several investment laws allocating billions of dollars in subsidies and tax breaks to repair American infrastructure and reinvigorate domestic manufacturing capacity to reduce dependence on China. In 2018, Biden’s predecessor Donald Trump imposed tariffs on Chinese imports to address the bilateral trade deficit, accusing Beijing of flooding the U.S. market with Chinese goods. The Biden administration has mostly kept the Trump-era duties on imports worth USD350 billion intact while allowing individual parties to apply for exclusions. A review of the effectiveness of the policy in boosting domestic manufacturing that began in 2022 is still awaited.
The latest USTR document said that it would continue “a targeted tariff exclusions process to ensure that our economic interests are being served, and we will keep open the option of further tariff exclusions processes as warranted”. The U.S. remains one of China’s top trading partners, though in 2023 Mexico became the leading source of goods imported into the U.S. – ahead of China for the first time in 20 years. Still, more than a third of U.S. imports come from Mexico, China and Canada, the South China Morning Post reports.
