White House officials consider probe into China’s industrial subsidies

Update on US-China relations

Senior US officials are debating whether to open an investigation into China’s use of industrial subsidies, in a move that could escalate trade tensions between Washington and Beijing. .

Discussions within Joe Biden’s administration could eventually lead the US to impose a new round of punitive tariffs on products from China, although such a step is still a long way off.

According to people familiar with the matter, Katherine Tai, the US trade representative, and Gina Raimondo, the US Secretary of Commerce, considered launching an investigation into Chinese subsidies under section 301 of the Trade Act of 1974.

This is also the legal framework used by the Donald Trump administration to impose tariffs on $360 billion of Chinese products during his time in the White House. The USTR’s office, the commerce department and the White House declined to comment. Bloomberg News first reported that the Biden administration was considering such a move.

The move to open a new investigation into China’s unfair trade practices will come after the Biden administration’s growing frustration over Beijing’s failure to fundamentally move away from using more aid. industry level to support strategically important areas in recent years.

NS trade truce occurred between Trump and Xi Jinping, the president of China, in January 2020, excluding any major and enforceable commitments by Beijing to change its industrial subsidies, making it become a major source of tension in economic relations.

Since taking office this year, Biden has Trump’s tariffs are preserved despite pressure from US business groups to reduce or eliminate them to reduce costs for US importers. The decision to launch a new trade probe against Beijing may indicate that it is heading in the opposite direction.

This week, Biden just hosted second phone call as president with Xi, seeking to re-establish their relationship after American officials concluded that the lower-level engagement was not making sufficient progress.

According to the White House account of the call with Xi, Biden “emphasised the United States’ enduring concern for peace, stability, and prosperity in the Indo-Pacific and the world, and two Leaders discussed the responsibilities of both countries in ensuring competition. no conflict”.

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