US-China Trade Policy Shifts in the Works

The White House concluded that Beijing has not carried through on previous trade deals.

Therefore, US Trade Rep. Katherine Tai will advocate for a significant transformation in the United States’ ties with China on Wednesday. 

As per her prepared speech reviewed by the Washington Examiner, Tai will testify before the House Committee on Ways and Means.

Here, she will urge the United States to adopt what is being characterized as a counterattacking economic posture, instead of proceeding with the Phase One trade agreement brokered between the Trump presidency and Beijing. 

New Approach

“While we will persist in leaving the door open to discussions with China, such as on its Phase One obligations, we will also need to recognize the agreement’s constraints.”

“We need to turn the page on the old rulebook with China, which was primarily focused on modifying its behavior,” she said in her remarks.

“Instead, our policy must go beyond simply pressuring China to reform and include a forceful defense of our principles and economic interests against the harmful consequences of the People’s Republic of China’s unfair economic policies and procedures.” 

However, even though COVID-19 labor shortages prohibited China from achieving its agricultural commitments as indicated by the Trump presidency, President Biden decided in 2021 to collaborate with the Chinese government to complete the Phase One agreement. 

According to Tai, the Biden administration hoped to “fight for the farmers and enterprises that benefit from those responsibilities and test the PRC’s commitment to the obligations it signed up to.” 

In contrast, according to figures published in January, the United States’ trade imbalance with China is expected to grow from $310 billion in 2017 to $355 billion in 2019. 

Exports of goods from the United States to China plummeted in December.

This confirmed a significant shortfall in Beijing’s two-year purchase pledges under the Phase One trade agreement signed by the administration of former President Trump. 


As reported on Tuesday by the United States Census Bureau, the United States’ 2021 goods trade imbalance with China increased by $45 billion, or 14.5 percent, to $355.3 billion, the greatest since $418.2 billion was set in 2018. 

The 2020 gap was $310.3 billion, a ten-year low led by coronavirus pandemic lockdowns that reduced the gap to $310.3 billion. 

Business inventories were replenished to meet high demand, resulting in a 27% increase in the global trade imbalance in 2021 to a record $859 billion.

The data indicated that China had fallen far short of its commitments to acquire an additional $200 billion worth of farm and manufactured goods, energy, and services from the United States above 2017 levels.

This was the year before a brutal trade war erupted between the world’s two largest economies. 

President Trump’s Phase One trade agreement with China, which went into effect in mid-February 2020 and prevented the feared escalation of tariffs, was centered on purchase pledges. 

Tai also notes that China is “trying to target critical industrial and high-tech industries, such as electric vehicles, battery packs, semiconductors, and others.”

She says the United States will call on China to invest in and create those same business interests by passing the Bipartisan Innovation Act, which President Biden has endorsed.