White House plans to review terms of US-China trade deal

The Biden administration will review all national security measures put in place by the former administration, including the US-China Phase 1 trade deal signed in January 2020.
calendar icon 1 February 2021
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Reuters reports that when asked if President Joe Biden viewed the deal as still in effect, press secretary Jen Psaki told a White House briefing: "Everything that the past administration has put in place is under review, as it relates to our national security approach, so I would not assume things are moving forward."

Psaki said the Biden administration was focused on approaching the US-China relationship "from a position of strength, and that means coordinating and communicating with our allies and partners about how we're going to work with China."

Trump signed the Phase 1 trade agreement with Chinese President Xi Jinping in January 2020, easing a nearly 18-month trade war in which US and Chinese goods worth hundreds of billions of dollars were hit by tit-for-tat tariffs, slowing trade between the world's two largest economies.

Under the deal, Beijing promised to boost purchases of US agricultural and manufactured goods, energy and services by $200 billion above 2017 levels over two years. But its purchases fell far short in 2020.

Chad Bown, a fellow at the Peterson Institute for International Economics, released an analysis this month showing China's purchases of US goods in 2020 fell 42 percent short of the commitment Beijing made in the trade agreement.

The Biden administration will hold off on changes to some $370 billion in US tariffs in place on Chinese imports while the review is underway, an administration official said.

"We are holding on changes as we undertake a full-scale review to identify the best ways to work collectively with other countries to exert maximum pressure on China," the official said.

No comment was immediately available from the White House on whether the Biden administration was actively considering withdrawing from the interim trade deal.

Treasury Secretary Janet Yellen also flagged a comprehensive review of China's implementation of the trade deal in written responses to questions from lawmakers last week, and said Washington would work with allies to address "abusive" practices by the world's second-largest economy.

Doug Barry, spokesman for the US-China Business Council, said it made sense for the Biden team to review the trade deal and other Trump policies, but downplayed concerns about any imminent cancellation.

"We don’t read too much into the process at this point. China has 11 more months to fulfil its promises to purchase an additional $200 billion in US products," he told Reuters.

Barry noted that China had already made significant purchases of agricultural products, boosting jobs in that sector, and said Chinese officials had signalled that they planned to meet their commitments under the trade agreement.

"Doing so is key to eventually rolling back mutually harmful tariffs on each other’s goods which have cost American jobs, reduced GDP, and increased living costs. Scrapping the deal could make those tariffs and the damage they are causing permanent," he added.

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Source: Reuters

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