The Biden administration has launched a broad review of the phase one trade deal signed by ex-President Donald Trump and general secretary of the Communist Party of China (CPC) Central Committee Xi Jinping on Jan. 15, 2020, but has shown no indication it intends to cancel the deal despite Chinese shortcomings.
"Everything that the past administration has put in place is under review, as it relates to our national security approach, so I would not assume things are moving forward," said White House Press Secretary Jen Psaki.
She said the Biden administration would approach the U.S.-China relationship "from a position of strength, and that means coordinating and communicating with our allies and partners about how we're going to work with China."
The phase one trade deal remains an economic agreement between the U.S. and China. It requires China to boost its purchases of U.S. goods and services by $200 billion from 2020 to 2021 compared to the 2017 levels of $130 billion in goods and $56 billion in services.
For its part, the U.S. will slash import tariffs to 7.5% from 15% on $120 billion worth of Chinese goods effective Feb. 14, 2020. The 25% U.S. levy on $250 billion worth of Chinese goods will remain, however.
Chinese imports worth $370 billion will see no reduction to their tariffs. The U.S. also agreed to suspend an additional $160 billion in tariffs.
On the other hand, China suspended its planned retaliatory tariffs. It also reduced tariffs on $75 billion worth of goods on February 5.
Biden on December 1 said he first wants to conduct a full review of the phase one trade deal before taking any action on either removing or diminishing Trump's tariffs.
"I'm not going to make any immediate moves, and the same applies to the tariffs. I'm not going to prejudice my options," said Biden to The New York Times.
Biden also said he'd consult with traditional U.S. allies in Asia and Europe "so we can develop a coherent strategy" before doing anything about the tariffs.
"The best China strategy, I think, is one which gets every one of our -- or at least what used to be our -- allies on the same page," according to Biden.
"It's going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.
The U.S.-China Business Council (USCBC), the federal government-backed group that facilitates trade between the U.S. and China, said it made sense for the Biden administration to review the trade deal and other Trump policies, but downplayed concerns about any imminent cancellation of the deal.
"We don't read too much into the process at this point," said Doug Barry, USCBC spokesman.
He admits China has fallen short of its commitments under phase one. A recent analysis shows China's purchases of U.S. goods in 2020 fell 42% short of the commitment China made in phase one.
Barry pointed out China has 11 more months to fulfill its promises to purchase an additional $200 billion in U.S. products. He said China had made significant purchases of agricultural products, boosting jobs in that sector.
He revealed Chinese officials had signaled \they planned to meet their commitments under phase one.
"Doing so is key to eventually rolling back mutually harmful tariffs on each other's goods, which have cost American jobs, reduced GDP, and increased living costs. Scrapping the deal could make those tariffs and the damage they are causing permanent," he added.
There is no word if the Biden administration will push ahead with a phase two trade deal.
