White House officials consider investigating China’s industrial subsidies

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Update on Sino-U.S. Relations

Senior US officials are discussing whether to launch an investigation into China’s use of industrial subsidies, a move that may trigger an escalation of trade tensions between Washington and Beijing.

Discussions within the Joe Biden administration may eventually lead to a new round of punitive tariffs imposed by the United States on products from China, although this step still has a long way to go.

According to people familiar with the matter, U.S. Trade Representative Katherine Tai and U.S. Secretary of Commerce Gina Raimondo have considered investigating China’s subsidies under Article 301 of the 1974 Trade Act.

This is the same legal framework used by the Donald Trump administration to impose tariffs on US$360 billion worth of Chinese products during his tenure in the White House. The Office of the United States Trade Representative, the Department of Commerce and the White House declined to comment. Bloomberg News first reported that the Biden administration is considering such measures.

The Biden administration is increasingly frustrated that Beijing has not fundamentally shaken off the use of industrial subsidies to support strategically important industries in recent years. Therefore, new investigations into China’s unfair trade practices will follow.

this Trade truce The January 2020 agreement between Trump and Chinese President Xi Jinping did not include any major and enforceable commitments made by Beijing to change its industrial subsidies, making it a major source of pressure for economic relations.

Since taking office this year, Biden Keep Trump’s tariffs Despite the pressure from the American business community, they are required to reduce or eliminate them in order to reduce the cost of American importers. The decision to launch a new trade investigation into Beijing shows that it is moving in the opposite direction.

This week, Biden only held his Second call After U.S. officials concluded that lower-level contacts had not made enough progress, they sought to re-establish relations with President Xi.

According to the White House’s description of the call with Xi Jinping, Biden “emphasized the United States’ enduring interest in peace, stability and prosperity in the Indo-Pacific region and the world, and the two leaders discussed the responsibilities of the two countries to ensure that competition is not affected.” Don’t fall into conflict”.

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