According to Reuters, U.S. Trade Representative Katherine Tai said in her new assessment report that the United States needs to develop new strategies and update its domestic trade tools to counter China’s “state-led, non-market policies and practices.”
Tai said: “China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago,” and “China has instead retained and expanded its state-led, non-market approach to the economy and trade.”
The report also said that the United States needs to update its domestic trade law tools to reflect the current realities of China’s trade policies “to secure a more level playing field for U.S workers and businesses.”
A comprehensive China competition bill recently passed by the House of Representatives and currently being considered by the Senate would broaden the use of anti-subsidy tariffs to target cross-border subsidies for Chinese companies that invest in offshore production to avoid U.S. duties.
Since China joined the WTO in 2001, these reports have been sent to Congress every year. This is the first report released under U.S. Trade Representative Katherine Tai, reflecting her China trade strategy.
The report follows the final 2021 trade data of the U.S. Census Bureau showing Beijing’s failure to meet promised two-year targets for purchasing 200 billion dollars worth of U.S goods, services, and energy under the Phase 1 agreement.
The data also show that the United States’ 2021 goods trade deficit with China rose by 45 billion dollars, or 14.5 percent, to 355.3 billion dollars, the largest since a 2018 record of 418.2 billion dollars.
According to the report, the violation of WTO rules causes serious harm to U.S industries and markets and those of other WTO members. Despite breaking the rules, Beijing has taken advantage of the benefits of WTO membership, particularly nondiscriminatory access to other members’ markets, to become the WTO’s largest trader.
It also said China had failed to fulfill other Phase 1 commitments. These include regulatory approvals for U.S agricultural biotechnology and a risk assessment on the use of ractopamine, a feed additive used in the United States to produce leaner pork and beef.
The report said the United States was still pursuing bilateral engagement “to hold China accountable for its existing commitments” under the Phase 1 agreement.