The government and its supporters say they were reasonably cautious about approaching China via tweet after four years of Trump’s trade policy. But industry officials in Washington have also begun to wonder whether Biden’s self-proclaimed “worker-centered” trade policy will look any different than Trump’s “America First” model when it comes to China.
“If the Biden administration is to argue that it is taking a different approach, it is time to set out the strategy it promised,” said Anna Ashton, vice president of the US-China Business Council, which represents more than 250 companies across both Countries do business. “As far as they have given any clues about strategy, these clues do not really suggest that they plan to deviate from the course we took at the end of the Trump administration.”
The industry’s drive for clarity on Biden’s stance on China comes amid mounting tensions between the world’s two largest economies. Although Biden has not taken action against tariffs, he has continued to impose sanctions, trade and investment restrictions on Chinese individuals and companies related to human rights abuses. Beijing has hit back with its own sanctions and cracked down on Chinese companies listed on US stock exchanges.
Meanwhile, the sides refuse to talk about trade. The first-phase trade deal that Trump and Chinese President Xi Jinping signed last year calls for a meeting every six months. But US Trade Representative Katherine Tai and her counterpart, Vice Premier Liu He, have not spoken a word since an introductory meeting in May, and that was outside of the trade deal.
USTR refuses to say when the next call will take place. This adds to corporate concerns that the White House is not sufficiently interested in improving business relationships with China.
Earlier this month, the U.S.-China Business Council launched a letter from more than 30 major corporate interest groups calling on the government to ease Trump’s tariffs and return to the negotiating table with China. “These steps are urgently needed to mitigate the significant and ongoing damage of tariffs to the US economy, US workers and US national competitiveness,” wrote the groups, including the US Chamber of Commerce and the Business Roundtable.
The U.S. Trade Representative’s office, which oversees China’s trade review, says it is only doing what Biden has promised. Even before he won the presidency, Biden’s deputies warned that trade policy would take a backseat early on in his administration as the White House focused on passing domestic stimulus measures as part of a review of Trump’s trade actions.
The government says Biden has already sought to mend diplomatic ties with allies burned by Trump’s bombastic style by signing a deal to suspend the Boeing-Airbus subsidy dispute with Europe and agreeing to work with them, to fight the global markets with Chinese steel and create a new trade and technology council with the EU.
“Along with historic infrastructure investments to better rebuild homes, we are conducting a solid, strategic review of our economic ties with China and engaging a wide range of stakeholders, including the business community, to develop effective policies that benefit American workers and Supported farmers and placed businesses in a stronger position to compete with China and the rest of the world, “said a USTR spokesman.
But officials from American corporations say they view these efforts as mostly symbolic and that they still don’t know what the White House is trying to achieve by talking more to friendly nations.
“We all understand the need for a rigorous and comprehensive review, but we’ve been in the administration for almost nine months and haven’t seen anything about the policy or what it will look like,” said Jon Gold, vice president of supply chain and customs policies for the National Retail Federation , which represents more than 18,000 retailers, including large companies like Walmart and Macy’s.
“We appreciate the ongoing work with our allies to address some of the issues, but as companies continue to recover from the pandemic, they are still facing these barriers with tariffs in place that are affecting their ability to fully recover.” Gold added.
Companies feel rejected by the administration when it comes to other trade priorities as well. While USTR has not disclosed its China review, the government has been vigorous on other measures. This includes continuing to crack down on companies doing business in northwest China’s Xinjiang region, the site of widespread human rights violations that the US has labeled genocide.
The trade bureau has also acted aggressively against union busting in Mexican auto parts factories by relying on the harsher language in the North American trade pact that Trump signed last year.
At the very least, industry groups say they await some action to ease the burden on US companies from Trump’s tariffs, which Biden attacked during the election campaign. They say they are particularly frustrated that he refused to reopen the exemption procedure for the so-called Section 301 tariffs that Trump imposed on China and which were closed before Biden took office.
“The foreclosure process under the previous administration was a bit flawed and more of a black box than anything,” Gold said. “We welcome the opportunity for USTR to introduce a new process, but in the meantime they could have reinstated the expired exclusions so that companies wouldn’t have to take a 25 percent tax hike by January 1st.”
Fear of tariffs was also heightened by some mixed news from administrative officials. Trade Secretary Gina Raimondo, for example, has repeatedly praised the tariffs Trump is imposing on steel imports to save American jobs.
But Treasury Secretary Janet Yellen also criticized the tariffs and the first phase trade deal in general, saying they “hurt American consumers” while failing to address structural problems in China’s economy. These contradictions, and the slow pace of the review, have been scratching their heads by industry leaders who welcomed Biden’s economic team nominations.
In the face of inaction on tariffs, companies are pushing for Congress to intervene. They support provisions incorporated into the Senate Anti-China Economic Act that would reopen the Section 301 process, reform the process of implementing federal trade restrictions, and renew expired tariff exemption programs for developing countries and intermediate goods used in American manufacturing. The government has not yet passed any of these regulations, creating more frustration among industry officials.
“Given the expertise and knowledge of this group, they should be able to move faster, especially in formulating their vision,” said an industry source who wanted to remain anonymous because of ongoing work with the administration. “The sand in the hourglass is running out.”