The White House is discussing the postponement of Biden’s tariff plan for key Chinese industries

The delay risks creating a deeper response against Democrats before the interim terms. Companies whose production costs have risen due to tariffs expected Biden to withdraw from Trump’s trade wars. But Biden must also weigh these demands with his desire to look tough on Beijing for voters increasingly concerned about China’s economic power, as well as the desire of his union supporters to maintain tariffs on key industries like steel.

“I have a lot of clients who got tired of Trump and voted for the moderate, pro-business Biden,” said Brian Johnson, director of the Vogel Group, a corporate lobbying company. “How much these policies delve into their end results will affect their behavior.”

Trump’s trade legacy has remained largely unchanged since Biden took power 10 months ago: duties on $ 350 billion of Chinese goods are still in place. China has also not complied with an agreement it signed with Trump in early 2020 to buy U.S. agricultural products and other goods for $ 200 billion. In a speech in early October, Tai announced that she would resume talks on enforcing the trade agreement, saying the Biden administration did not want to “inflame” tensions with China.

But Sullivan, one of China’s most aggressive White House hawks, demanded an announcement of additional steps toward higher tariffs on industries during a months-long review of Trump’s trade policy by the administration, people familiar with the negotiations said.

Tai opposed such a quick move, arguing that it would poison new talks with Beijing and that the Biden administration should not abandon previous U.S. trade commitments, including those made under Trump, people said. Under trade law, the U.S. must begin talks with the target country before taking steps to add new tariffs.

The White House says Biden’s team is now on the same page after a lengthy review of Trump’s trade policy, which included contributions not only from Sullivan and Tai, but also from the Commerce, Finance and other ministries.

“The Biden administration has conducted a thorough inter-agency review of US-China trade relations to realize President Biden’s vision to rebalance US-China trade and economic relations in a way that protects American workers from unfair trade policies and strengthens the middle class,” he said. he said. senior management official.

“The final decision had the full support of President Biden, the National Security Council and the relevant agencies,” a USTR spokesman added.

U.S. law requires the White House to first investigate whether a foreign government is inadequately subsidizing its domestic industry before imposing new tariffs. When Biden’s White House will do that remains unclear, but people familiar with administrative talks say it probably depends on how the Chinese participate in the first few rounds of talks.

No matter how Beijing responds, administration officials do not expect China to eventually fulfill the trade agreement it signed with Trump in early 2020, particularly its commitments to protect U.S. intellectual property and conduct other domestic economic reforms. This will give the White House a rationale to launch a new tariff investigation and eventually impose new duties on some products while reducing others.

Apart from a new customs investigation, Biden’s team could formally accuse China of failing to honor a trade agreement negotiated by Trump. But monitoring the process in the deal would likely take years before leading to new tariffs or other trade sanctions, so the White House is leaning toward a new investigation, people say. But the USTR said all options remain on the table.

“If we conclude this [China] does not meet a specific commitment, we will consider appropriate measures, including the first phase agreement itself, but no decisions have been taken, “a USTR spokesman said.

The Biden administration is likely to work towards a narrower and steeper tariff structure for China, said a man familiar with the administrative plans. While Trump has imposed tariffs on thousands of goods imported from across the Chinese economy, the White House is considering higher tariffs on the industries that receive the most subsidies and other support from the Chinese government. These can include steel, solar cells, batteries, semiconductors and other technology.

“We will not prejudge the outcome of discussions with [Chinese government]”At the same time as Beijing is continuing its unfair and coercive practices, we are ready to use the full range of our tools to ensure that US-China trade relations work for American workers, industry and supply chains.”

The White House will also work to provide tariff relief, either by reducing tariffs or by providing exemptions, to companies that are not supplied by the most popular sectors in Beijing. Sullivan and other administrative officials believe this would allow them to punish China for what they see as covert trade practices, while still offering assistance to some U.S. companies affected by the trade war. The White House has already reopened the process for companies to apply for customs exemptions for more than 500 products from China, and indicated that there are more opportunities for exclusion along the way.

The reduction in Trump’s tariffs has support on the Senate Finance Committee, even Republicans. Democratic Senators Bob Menendez (NJ) and Ben Cardin (Md.) Said in interviews that they want to see Biden publish a new tariff investigation. Finance Committee member Mike Crapo (R-Idaho) said he would welcome the White House to cut tariffs that have affected U.S. industry.

“We need adjustments, omissions, or various of our improved applications [trade] sanctions policy, otherwise we will hit our own American producers, ”Crapo said. “If we are going to investigate this, we need to make sure that the application of our sanctions will not look like a bull in the china trade. It needs to be improved and done well. “

Doug Palmer contributed to this report.

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