US Business Leaders Cite ‘Core Structural Economic Concerns’ in US-China Relationship
August 11, 2021–Even as competition and disagreements intensify between the world’s largest two economies, U.S. business leaders are urging U.S. and Chinese trade representatives to return to the negotiating table.
More than 30 business, agricultural and trade organizations signed a letter to Treasury Secretary Janet Yellen and US Trade Representative Katherine Tai late last week. The industry leaders asked U.S. trade representatives to work with the Chinese government on implementing an existing trade deal. Furthermore, they asked for relief from tariffs and retaliatory tariffs.
President Joe Biden, meanwhile, is emphasizing domestic renewal under a slogan to “Build Back Better.” He is riding high on a legislative victory in the passage of a $1.2 trillion infrastructure bill by the Senate. Furthermore, Biden is voicing more and more support for democratic values as part of his domestic and foreign policies.
Pre-Pandemic US-China Trade Deal
In January 2020, the two countries signed a partial trade agreement. That’s known as Phase One. Under that plan, China agreed to purchase U.S. agricultural products, goods and services, comply with WTO obligations, and protect and enforce intellectual property laws in China.
Since that agreement, the trend has moved away from cooperation on trade to an adversarial relationship. That was obviously earlier last Spring when the nations’ top diplomats met. From that contentious meeting, many parts of the relationship went downhill. The two countries have argued over human rights, launched sanctions on one another, and sparred for influence in Asia. More recently, the Biden Administration warned businesses against feeding their supply chains from China’s Xinjiang Province, where the government there is reportedly forcing minorities into internment camps and forcing them to work.
Tariff Relief
In part, the business associations asked the Biden Administration to provide relief from tariffs on Chinese goods.
“These steps are sorely needed to mitigate the tariffs’ significant and ongoing harm to the U.S. economy, U.S. workers, and U.S. national competitiveness,” the August 5 letter said. They estimated the import tariffs cost the average American $1300 in 2020.
However, the industry leaders also said they “also recognize that fully resolving tariffs is unlikely, absent substantially more progress by China on core issues.”
Adding Topics To The Table
It’s not just relief from import tariffs that U.S. businesses want. They also want the Biden Administration to address what they call “significant challenges” and “core structural economic concerns” in the U.S.-China economic relationship. The issues include:
- State subsidies
- Procurement by government and state-owned enterprises
- Cybersecurity
- Digital trade and data governance
- Services issues
- Competition policy
- Regulatory data protection for new drugs, biological products, and other items
- Chinese domestic standards-setting
- Agriculture policy issues, and
- Continued market access barriers for U.S.-manufactured goods.
The U.S. Trade Representative detailed many of these issues in a 2018 report that provided an update on a Section 301 investigation.
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