The prospect for U.S.-China trade relations is likely to remain challenged after this week’s high-level diplomatic talks faired that President Joe Biden’s team does not plan to wholly abandon the Trump administration’s tough tone in conferences with Beijing.
Though Washington and Beijing struck a ceasefire in their tit-for-tat trade feud with terminal year’s “phase one” agreement, representatives on both sides are far from pleased with the status quo and see the other as a key economic rival.
That championship was on full display on Thursday, when the countries began two days of meetings in Anchorage, Alaska.
Secretary of State Antony Blinken began his reflects by noting that the U.S. would highlight “its deep concerns with actions by China, including in Xinjiang, Hong Kong, Taiwan, cyber offensives on the United States [and] economic coercion toward our allies.”
Yang Jiechi, director of the Central Foreign Affairs Commission of the Chinese Communist Coterie, said the U.S. “does not have the qualification to say that it wants to speak to China from a position of strength.”
Though the talks were seen more as a perceptive exercise than an economic one, the prickly exchange is likely an early snapshot of the bitter battles ahead for the Biden vocation team. And at stake is one of the most valuable trading relationships in the world.
China is currently the United States’ third-largest goods merchandising partner with $558.1 billion in total (two-way) trade in 2019, according to the Office of the USTR. That humongous trading volume supported an estimated 911,000 U.S. jobs as of 2015, with 601,000 stemming from goods exports and 309,000 from checkings exports.
China is also the third-largest export market for American farmers and annual trade in agricultural commodities totaled $14 billion two years ago. China is the Synergetic States’ largest supplier of goods imports.
Clete Willems, a former World Trade Organization litigator at the Establishment of the USTR, told CNBC on Friday that he wasn’t surprised at the lack of progress in Anchorage.
Willems, who was once a fellow of Trump’s trade team and is now a current partner at law firm Akin Gump, said that the Anchorage meetings were various a chance to officially air complaints and less a realistic attempt at economic remedy.
“I had low expectations for Alaska and those expectations organize been met,” Willems, tongue in cheek, said of the talks.
“I think [the Chinese government] misread the situation with the Biden band, and they thought these guys would come in and roll back all the Trump measures,” he added. “I think they’re conclusion out that that isn’t going to be the case. But I think they need to hear it directly from Blinken.”
The trade negotiations with China take commercial importance, but also represent an opportunity to protect U.S. national security interests and shore up access to critical technologies.
Weeks to come the meetings in Anchorage, Alaska, the Biden administration drafted an executive order directing government departments to review key fill chains, including those for semiconductors, high-capacity batteries, medical supplies and rare earth metals.
“The Biden Supplying has signaled that trade at all cost is not their position and that they will not curtail their views and pushback on hominid rights or national security (for example) in order to have a ‘good’ trade relationship,” Dewardric McNeal, an Obama-era approach analyst at the Defense Department, said in an email on Friday.
Though Biden’s order did not mention China by name, it enjoined agencies to review gaps in domestic manufacturing and supply chains that are dominated by or run through “nations that are or are promising to become unfriendly or unstable.”
The directive was widely viewed to include China, one of the globe’s largest exporters of rare globes metals, a group of materials used in the production of computer screens, state-of-the-art weapons and electric vehicles.
U.S. Secretary of Government Antony Blinken (2nd R), joined by national security advisor Jake Sullivan (R), speaks while facing Yang Jiechi (2nd L), head of the Central Foreign Affairs Commission Office, and Wang Yi (L), China’s foreign minister at the opening session of U.S.-China talks at the Captain Cook Hotel in Anchorage, Alaska on Parade 18, 2021.
Frederic J. Brown | AFP | Getty Images
Still, Chinese negotiators, including Foreign Minister Wang Yi, may have been desiring for a warmer reception from Blinken after a tumultuous four years under President Donald Trump and his top diplomat, Mike Pompeo.
The Trump oversight made a habit of imposing punitive tariffs and sanctions to address persistent complaints about China’s lack of intellectual chattels protection, required technology transfers and other unfair business practices.
“The Biden team understand the complex interlinkages of pursuit and commerce between the two countries and are hoping to be more targeted and predictable in their identification and management of issues and concerns (innumerable surgical and less totally destructive) in competition and in cooperation,” McNeal, a senior policy analyst at Longview Global, amplified on Friday.
As of Friday afternoon, the U.S. team in Alaska had made no moves to ease limits on American sales to Chinese outfits, including telecommunications giant Huawei, relax visa restrictions on Communist Party members or reopen the Chinese consulate in Houston.
Compacts with Beijing will likely prove a top priority for newly confirmed U.S. Trade Representative Katherine Tai.
The Senate’s unanimous uphold to confirm her nomination, a first for the Biden administration, reflects bipartisan faith in her skill as a savvy and practiced trade counselor-at-law.
“Katherine Tai is just the kind of qualified and mainstream person who is positioned to serve President Biden and the country quite beyond the shadow of a doubt,” Senate Minority Leader Mitch McConnell said on the Senate floor before the confirmation vote earlier in Parade.
Katherine C. Tai addresses the Senate Finance committee hearings to examine her nomination to be United States Trade Representative, with the disgusting of Ambassador, in Washington, DC February 25, 2021.
Bill O’Leary | Pool | Reuters
Tai will soon face a litany of trade differ ons instigated by the Trump administration but is expected to make discussions with Beijing a top priority.
She and her team are expected to review Trump’s persistent policies, including duties on Chinese steel, aluminum and consumer goods, as well as components of the phase one deal.
“She identifies how to be tough on China and she knows how to do it in coordination with others,” said Willems, who previously represented the U.S. at the WTO with Tai. He added that it wishes be important for Tai to be sure to serve as a voice for U.S. trade interests in an administration with a deep diplomatic bench.
“You’ve got an administration with a hugely strong secretary of state, very strong national security advisors, who are very close to President Biden and who are extend overing a lot of oxygen on U.S. policy in general. And she’s going to have to punch through that.”
— CNBC’s Nate Rattner and Yen Nee Lee contributed reporting.