U.S. trade groups urge Biden to restart negotiations with China

U.S. trade groups urge Biden to restart negotiations with China

Nearly three dozen of the nation's most influential business groups - representing retailers, chip makers, farmers and others — are calling on the Biden Administration to restart negotiations with China and remove tariffs on imports, saying they are a drag on the U.S. economy

The tariffs on electronics, clothing and other Chinese goods, paid by U.S. importers, were kept in place in part to ensure that China fulfills its obligations under its 2020 Phase One Trade pact with China.

In a Thursday letter to U.S. Trade Representative Janet Yellen and Treasury Secretary Katherine Tai, the business groups contend that Beijing had met important benchmarks and commitments in the agreement, including opening markets to U.S. financial institutions and reducing some regulatory barriers to U.S. agricultural exports to China.

A worker-centered trade agenda should account for the costs that U.S. and Chinese tariffs impose on Americans here and abroad and remove tariffs that harm American interests, the letter said, referring to the administration's policy to make worker interests a priority.

Spokesmen for the U.S. Trade Representative's Office and Treasury didn't immediately respond to requests for comments.

The trade groups include some of Washington's most influential Big Business Associations, including the U.S. Chamber of Commerce, the Business Roundtable, the National Retail Federation, the American Farm Bureau Federation and the Semiconductor Industry Association.

The broadside by the trade groups represents increasing frustration by a swath of American corporations at the pace of the administration's review of China trade and economic policy. The administration has given few hints about whether it intends to try to extend the Phase One trade agreement negotiated by the Trump Administration or enforce it

U.S. Commerce officials have told Chinese officials that they won't move on trade issues until the administration makes clear it accepts the Phase One deal.

The review is expected to continue until some time in the fall, administration officials have said.

The administration also hasn't expressed its plans for tariffs on Chinese goods that now amount to levies on about half of the China goods imports by the U.S.

Yellen said that she thinks tariffs are economically harmful but other administration officials have said privately that her remarks weren't meant to signal a change in U.S. trade policy.

Chad Bown, an economist at the Peterson Institute for International Economics who closely follows the Phase One deal, has said that China is behind in its commitment to boost purchases by $200 million over two years.

The trade groups indirectly acknowledged this, saying there is work to be done by both governments to ensure that China meets its existing purchase agreement.

But the groups argued that USTR should start negotiating over issues that weren't covered in the Phase One agreement, including state subsidies, government procurements, cybersecurity and digital trade.

The letter suggested our support for continuing engagement with China in trade and economic issues, and included strong backing for the Phase One deal.

The groups also urge the USTR to grant some exemptions from some tariffs and to start a process of banning tariffs on Chinese goods in general.

We also recognize that fully resolving tariffs is unlikely, absent substantially more progress by China on core issues, the letter said. This would involve fresh negotiations.