Trade War Rekindling...? US USTR Says "China Not Honoring Trade Deal, New Strategy Needed"

President Joe Biden of the United States (left) and President Xi Jinping of China during a video conference in November last year [Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The Biden administration in the United States criticized China for not honoring the trade agreement promised in 2020 and indicated that it may take additional measures such as revising its own trade laws. Concerns are rising that a US-China trade war could erupt once again.

According to the Wall Street Journal (WSJ) and others on the 16th (local time), the US Trade Representative (USTR) conveyed this stance in a report submitted to the US Congress, stating that a new strategy is needed to address China’s unfair, non-market, and distorted policies and practices.

The USTR pointed out that China promised to purchase additional US goods and services over two years through the Phase One trade agreement in 2020 but failed to properly fulfill this commitment. Previously, as the trade war intensified under the Donald Trump administration, China agreed to purchase an additional $200 billion of US goods and services from 2020 to 2021 compared to 2017, and to open markets for agricultural products and financial services, as well as to protect intellectual property rights.

The USTR criticized the Phase One trade agreement, which was signed to ease the trade war at the time, saying it "did not meaningfully address the more fundamental concerns the US has about China’s state-led anti-market policies and practices, nor the harmful impact on American workers and businesses." It also emphasized that "the US is primarily working to ensure China honors existing commitments, including the Phase One trade agreement," and that "demonstrating commitment is important in the bilateral relationship."

In particular, the USTR clearly signaled that it will take countermeasures by specifically targeting China’s large-scale industrial subsidy policies. The report included content that not only strengthens existing trade tools but also introduces new trade tools to be used strategically. The USTR suggested, "China pursues unfair policies and practices that were not considered when the US trade laws were written decades ago," and "we need to seek new trade laws to respond to this."

Following the recent complaints from the US Department of Commerce, the USTR, a presidential agency, also expressed dissatisfaction with the US-China trade agreement, leading to analyses that this could be a trigger for reigniting the US-China trade war. The WSJ predicted, "Since last year, the Biden administration has been considering more direct responses to China’s large-scale industrial subsidies," adding, "Investigations under Section 301 of the trade law have been reviewed, which could lead to new tariffs."

Earlier, the 'American Competition Act,' which strengthens anti-dumping regulations in response to China’s trade practices, has also passed the US House of Representatives.

This content was produced with the assistance of AI translation services.