Biden will not immediately remove phase 1 trade deal with China, New York Times reports

In a photo taken on Dec 4, 2013, Chinese President Xi Jinping shakes hands with then US Vice-President Joe Biden in Beijing.
In a photo taken on Dec 4, 2013, Chinese President Xi Jinping shakes hands with then US Vice-President Joe Biden in Beijing. PHOTO: REUTERS

WASHINGTON (REUTERS, BLOOMBERG) - United States President-elect Joe Biden has said that he would  not immediately act to remove the phase one trade agreement, which President Donald Trump inked with China, the New York Times reported on Wednesday (Dec 2).

In an interview with a Times columnist, Mr Biden said that the United States needed to get leverage back to use in negotiations with China.

"I'm not going to make any immediate moves, and the same applies to the tariffs," Mr Biden said. "I'm not going to prejudice my options."

"In my view, we don’t have (leverage) yet," he added. 

The United States needs to develop a bipartisan consensus and increase government-led investments in research and development, infrastructure and education to better compete with China, according to the president-elect. 

"I want to make sure we’re going to fight like hell by investing in America first," Mr Biden said. 

Under the phase one agreement  signed earlier this year, China agreed to increase purchases of American products and services by at least US$200 billion (S$268 billion) over 2020 and 2021.

The deal also leaves in place 25 per cent tariffs on a US$250 billion array of Chinese industrial goods and components used by US manufacturers, and China's retaliatory tariffs on over US$100 billion in US goods.

According to Mr Biden, the best strategy to deal with China would be to first get its allies on the "same page".

"It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies."

The yuan weakened against the dollar immediately after the news, before regaining much of that loss.

Mr Biden’s team will pursue policies targeted at China’s "abusive practices," including "stealing intellectual property, dumping products, illegal subsidies to corporations" and forcing "tech transfers" from US  companies to their Chinese counterparts, according to the interview. 

On Iran, Mr Biden said he stood by his views that his administration would lift sanctions if Teheran returned to "strict compliance with the nuclear deal."

Last month, Iranian Foreign Minister Mohammad Javad Zarif had said Iran would fully implement its 2015 nuclear deal if Mr Biden lifts sanctions, which Mr Zarif said could be done swiftly through "three executive orders". 

"In consultation with our allies and partners, we’re going to engage in negotiations and follow-on agreements to tighten and lengthen Iran’s nuclear constraints, as well as address the missile programme," Mr Biden added.