U.S. Trade Representative Says China Has Not Lived Up To WTO Obligations

The Biden administration has stepped up its rhetoric regarding China’s trade practices. On February 16, U.S. Trade Representative Katherine Tai said the Chinese government has “expanded its state-led, non-market approach” instead of carrying out market-opening promises that it made when it joined the World Trade Organization (WTO) in 2001.

Tai’s comments followed the release of a 72-page report that outlined how China has fallen short on its commitments to comply with WTO standards and to buy tens of billions of dollars in additional U.S. goods under the trade agreement put into place by the Trump administration. As ABC News noted, the Biden administration currently is exploring domestic trade tools that could help “achieve a more level playing field with China.”

The report, available here, took particular aim at China’s industrial policies and argued the country’s leaders have “distorted critical sectors” like steel and aluminum in ways that have devastated “markets in the United States and other countries.”

The Chinese government responded quickly, arguing Ambassador Tai’s statement was “completely at odds with the facts” because there “are many different market economic models.” In an official statement issued on February 18, China’s Ministry of Commerce went further, arguing that USTR’s report lacked legal principles and evidence, and ignored the country’s “significant contributions” to the global economy. China argued, for example, that it has lowered its general level of tariffs from 15.3 percent to 7.4 percent since it joined WTO.

Please note: Connecting the Dots is merely reporting the Chinese government’s response.

As a reminder, MSCI has been part of Manufacturers for Trade Enforcement (MTE), a coalition representing more than one million workers in aluminum, steel, cement, chemical, textile, and other manufacturing industries that has argued that the U.S. government must preserve non-market economy status for China because it is “is vital for U.S. manufacturers seeking redress for unfair trade practices by Chinese firms.”