US says it is getting traction with China in trade talks

WASHINGTON • The Biden administration is getting traction with China in talks over Beijing's compliance with a Trump-era trade deal, United States Trade Representative Katherine Tai has said, but she declined to predict an outcome while discussions continue.

Ms Tai told reporters in Washington on Wednesday that the administration aims to hold China accountable to the two-year phase one trade deal signed in January last year and is exploring all weaknesses in China's performance, including its lack of purchases of commercial aircraft.

She said the talks with Beijing on the phase one deal are being twinned with discussions on larger issues, including China's extremely robust state-driven industrial policies that are making it difficult for US companies to compete.

"I think that we consider this phase one engagement to be the first step," Ms Tai said. "And it's not in my interest for this first step to take a very, very long time."

China is running far behind in its promises in the deal to boost purchases of US goods by US$200 billion (S$270.9 billion) last year and this year, compared with 2017 levels, reaching only 60 per cent of the target as at Sept 30, according to data compiled by trade economist Chad Bown of the Peterson Institute for International Economics.

The deal also includes promised steps by China to improve protections for US intellectual property and increase market access for US agriculture biotechnology products and financial services.

Asked if she was pushing in the talks for China to take steps to allow for purchases of Boeing commercial aircraft - a purchase category identified in the phase one agreement, Ms Tai said: "If you're looking at where the weaknesses might be, in terms of phase one, you should expect that we are talking through it and exploring all of it."

US President Joe Biden and Chinese President Xi Jinping have a virtual meeting expected to be held as early as next week, amid rising tension between the world's two largest economies.

Ms Tai said the meeting would be helpful and their understanding of each other would benefit a complex relationship, but that the leaders' engagement was not necessary to facilitate the trade discussions.

"I don't want any of you in this room thinking that we are not getting traction with our Chinese counterparts," she said. "We're talking and we're working. So we don't need, you know, dads to come in," she added, referring to Mr Biden and Mr Xi.

Asked if the administration was considering easing tariffs on Chinese goods as a way to reduce inflationary pressures on the US economy, Ms Tai said her agency was viewing Section 301 tariffs on Chinese goods as part of a strategy to more effectively compete with China.

REUTERS