US to stress economic independence to counter ‘unfair’ China trade practices

WASHINGTON: The United States should focus on achieving economic independence from China rather than pressuring Beijing to change “unfair” trade practices, US Trade Representative (USTR) Katherine Tai said Wednesday, suggesting a shift in strategy toward the Asian giant.

The new approach takes into account Washington’s inability to force fundamental changes in business practices under a trade agreement signed by the previous administration, she argued.

“While we continue to keep the door open to conversations with China… we also need to acknowledge the agreement’s limitations, and turn the page on the old playbook with China, which focused on changing its behavior,” she told the House Ways and Means Committee.

The trade treaty, signed by former president Donald Trump, has been in effect since January 2020.

In her appearance before Congress, Tai stressed that the US strategy must now “expand beyond only pressing China” into abandoning trade practices that Washington deems unfair.

The new approach must “include vigorously defending our values and economic interests from the negative impacts of the PRC’s unfair economic policies and practices,” she said, using the official term for the People’s Republic of China.

When she joined the administration of President Joe Biden in early 2021, Tai asked her staff to analyze the impact of these practices on US industry and workers, as well as on those of US allies.

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“We have seen what happened in the steel and solar industries when existing mechanisms were too slow or ill-suited to effectively address the distortions wrought by China’s targeting of those sectors,” she said.

While China is also targeting critical industries such as high-tech, electric cars and semiconductors, Tai advocates “strategic investments” in the United States to no longer depend on China.

In her opinion, “significant progress” was made through last year’s American Rescue Plan stimulus bill, which she said helped businesses hit by the Covid-19 pandemic and made supply chains more resilient.

“But to truly boost America’s competitiveness, we urge Congress to quickly pass the Bipartisan Innovation Act,” she said, referring to a bill that would, among other things, facilitate the production of crucial technologies.