US trade chief Tai says getting 'traction' with China in 'Phase 1' deal talks

WASHINGTON (REUTERS) – The Biden administration is getting traction with China in talks over Beijing’s compliance with a Trump-era trade deal, US Trade Representative Katherine Tai said on Wednesday (Nov 10), but she declined to predict an outcome while discussions continue.

She told reporters in Washington the administration aims to hold China accountable to the two-year “Phase 1” trade deal signed in January 2020 and is exploring all weaknesses in China’s performance, including its lack of purchases of commercial aircraft.

China is running far behind in its promises in the deal to boost purchases of US goods by US$200 billion (S$270 billion) during 2020 and 2021, compared to 2017 levels, reaching only 60 per cent of the target through Sept 30, according to data compiled by trade economist Chad Bown of the Peterson Institute for International Economics.

Asked if she was pushing in the talks for China to take steps to allow for purchases of Boeing commercial aircraft – a purchase category identified in the Phase 1 agreement – Tai said: “If you’re looking at where the weaknesses might be, in terms of Phase 1, you should expect that we are talking through it and exploring all of it.”

US President Joe Biden and Chinese President Xi Jinping have a virtual meeting scheduled as early as next week amid rising tension between the world’s two largest economies.

Tai said the meeting would be helpful and their understanding of each other would benefit a complex relationship. But she said the leaders’ engagement was not necessary to facilitate the trade discussions.

“I don’t want any of you in this room thinking that we are not getting traction with our Chinese counterparts,” Tai said. “We’re talking and we’re working. So we don’t need, you know, Dads to come in,” she added, referring to Biden and Xi.

Asked if the administration was considering easing tariffs on Chinese goods as a way to reduce inflationary pressures on the US economy, Tai said USTR was viewing the “Section 301″tariffs on Chinese goods as part of a strategy to seek an advantageous position to more effectively compete with China.

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