New trade tools needed to fight China state-led trade

The United States needs to pursue new strategies and update its domestic trade tools to deal with China's  "state-led, non-market policies and practices", the US Trade Representative's office said on Wednesday in a new assessment report.

USTR said in its annual report on China's compliance with World Trade Organization rules that the  "Phase 1" trade agreement signed by the Trump administration two years ago failed to address fundamental US concerns with China's industrial policies and supporting policies, including  "massive financial resources."

 It said such support, which includes favorable regulatory support to Chinese industry and limited market access for imported goods and services, is often aimed at specific targets for capacity, production and market share.

The report, issued annually to Congress since China joined the WTO in 2001, is the first issued under US Trade Representative Katherine Tai and reflects her China trade strategy.

It follows final 2021 trade data showing Beijing's failure to meet promised two-year targets for purchasing US goods, services and energy under the Phase 1 deal, which eased a tariff war between the world's two largest economies.

"China has not moved to embrace the market-oriented principles on which the WTO and its rules are based, despite the representations that it made when it joined 20 years ago," Tai said in a statement.

 "China has instead retained and expanded its state-led, non-market approach to the economy and trade."