In a widely anticipated speech on October 4, 2021, United States Trade Representative (“USTR”) Katherine Tai provided an overview of how the Biden administration will approach the trade relationship with China. The speech, which came after a comprehensive review of the US – China trade relationship conducted by USTR Tai’s office (and whose main points are summarized in a USTR fact sheet), made clear that the administration will build on many of the trade policies of the Trump administration rather than depart significantly from them.
USTR Tai centered her policy announcements in the context of the Biden administration’s broader domestic policy efforts, namely the infrastructure and “Build Back Better” bills that Congress is now considering. She noted that these investments are needed to allow the United States to continue to compete in the global market and to counter similar investments made by China.
In particular, USTR Tai discussed the “Phase One” agreement entered into between the United States and China in January 2020 (Mayer Brown previously detailed this agreement here and here), calling for stronger enforcement of the agreement’s provisions in order to benefit American industries. More broadly, she noted that the administration continues “to have serious concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One deal”1 and noted that the administration plans to raise these concerns with China.
Many companies and other observers have waited to see how the Biden administration will handle the “Section 301” tariffs that had been imposed on imports of goods from China pursuant to Section 301 of the Trade Act of 1974 (these tariffs were imposed in a number of “tranches,” as we previously addressed here, here, here, here, here and here). Of particular interest has been whether the administration will reopen the process by which companies could apply for exclusions from these tariffs or even lift the tariffs altogether. The exemptions for all products subject to the Section 301 tariffs had expired on December 31, 2020, aside from exemptions for select medical products related to the COVID-19 pandemic.
In today’s speech, USTR Tai confirmed that her office would start a “targeted tariff exclusion process,”2 though she did not provide further details on when the process would start or which products it would cover. Notably, USTR Tai also raised the possibility of future product exclusions as well, confirming that the administration will “keep open the potential for additional exclusion processes, as warranted.”3
While USTR Tai’s speech marks the beginning of the Biden administration’s China trade policy—and while the details of a Section 301 product exclusion process are still to be determined—it is now clear that the administration intends to build on the previous administration’s actions and take an aggressive approach to the US – China trade relationship. Companies and other interested parties should keep a close watch on this area as the Biden administration’s trade policies develop.