President-elect Joe Biden said he won’t immediately remove the elevated tariffs that the Trump administration imposed on China.
Biden intends to first review the existing U.S.-China agreement and develop a “coherent strategy” with traditional allies in Europe and Asia.
Biden said he first wants to conduct a full review of the “phase one” trade deal that the Trump administration reached with China.
The deal effectively declared a truce in the trade war launched by outgoing President Trump, who sought to force Beijing to change its trade and industrial practices by imposing escalating rounds of tariffs.
Biden said he wants to consult with traditional U.S. allies in Asia and Europe “so that they can develop a coherent strategy” before making a move on tariffs.
One of his first acts as president was to pull the U.S. out of the Trans-Pacific Partnership, a massive trade agreement negotiated by the Obama administration with 11 other nations.
The agreement, which was never ratified by Congress, excluded China and was a central part of Obama’s efforts to cement U.S. influence in Asia.
As Trump pursued a tradewar with China, he threatened broad tariffs against European states such as Germany, alienating traditional allies with close economic ties to the U.S. who share many of the same criticisms of Beijing’s trade practices.
China recently signed the world’s largest trade deal with 14 Asia-Pacific countries, called the Regional Comprehensive Economic Partnership, which excludes the United States.
Some of the members of the China-led agreement were part of the U.S. negotiated TPP.
Under the phase-one deal, China agreed to purchase $200 billion worth of U.S. goods and services through 2021, though it has not kept pace with those targets, according to the Peterson Institute for International Economics.
The phase-one trade deal left in place 25% tariffs on $250 billion worth of Chinese imports.
Those tariffs have hurt U.S companies who are dependent on supply chains in China. There is an exclusion process that allows companies to plead their case before the U.S. Trade Representative for exemptions.
