U.S. Trade representative Katherine Tai held her first discussions with her Chinese counterpart, Vice Premier Liu He, the same official that negotiated the Phase One trade deal with the Trump administration. The call was described as "candid," and both sides affirmed the importance of the trade relationship between their countries.
Despite an overall civility, the U.S. and China remain locked into Trump-era trade regulations that do not seem to satisfy either side. The Biden administration has reinforced tariffs on $380B worth of Chinese imports, while China's deal to increase its purchase of American exports remains 27% behind schedule, according to the Peterson Institute for International Economics. An ongoing point of bilateral contention is the U.S. objection to Chinese subsidies to high-tech companies. Though trading a cut in subsidies for lower tariffs is an option, China has accepted the tariffs in order to continue to invest heavily into its prioritized industries. Read more on the Biden administration's trade strategy in Tai's Trade Challenges, from Zainab Zaheer, a Development Consultant.
As trade discussions continue, Kurt Campbell, U.S. coordinator for Indo-Pacific affairs at the National Security Council, described the U.S.-China relationship as entering a new phase of competition. "The period that was broadly described as engagement has come to an end," he said via teleconference. "The dominant paradigm is going to be competition. Our goal is to make that a stable, peaceful competition that brings out the best in us." Campbell also noted that the U.S. would be looking to hold an in-person meeting for Australia, Japan, India, and the U.S., members of the Quadrilateral Security Dialogue.
Prepared by China-US Focus editorial teams in Hong Kong and New York, this weekly newsletter offers you snap shots of latest trends and developments emerging from China every week, while adding a dose of historical perspective.