Trump’s Phase One Deal a Dud – White House

President Biden believes the US-China phase one trade deal negotiated by the previous Administration was a failure, according to his spokeswoman. “Phase one did not work. It did not have a meaningful purpose,” Karine Jean-Pierre told reporters. “The PRC did not meet its commitment, even in first year of the phase one deal going into effect during the Trump Administration.”

Asked if President Biden intends to make use of enforcement provisions in the deal, she sought to disassociate the current Administration from the deal, making it clear that the President sees the agreement as belonging to the Trump White House. “Let’s not forget that it’s not ours, it’s theirs,” she said referring to the previous Administration.

President Biden feels that the deal “did not meaningfully address our fundamental concerns with the PRC's trade practices. That is just the fact,” she said Tuesday.

Instead, the Biden White House is focused on defending US economic interests “in ways that will work, including in coordination with our allies and partners through initiatives like the Trade and Technology Council and the Indo-Pacific Economic Framework, and by investing more at home through the Bipartisan Infrastructure Act, through the CHIPS Act, and through the Inflation Reduction Act.”

Deputy Secretary of State Wendy Sherman underscored the Administration’s determination to work with allies to address concerns with China, including economic coercion, unfair trade practices and human rights violations. In an appearance at the Brookings Institution, Ms. Sherman urged US allies to oppose any military action by China against Taiwan, saying it would result in a repeat of global shortages and economic instability created by Russia’s invasion of Ukraine. She pointed to the enormous amount of trade that passes daily through the Taiwan straits.

Separately, House Ways and Means Trade Subcommittee Chairman Adrian Smith (R-Neb) warned that the Administration’s failure to negotiate new free trade agreements puts China at a competitive advantage. The most effective way to compete with Beijing is to put in place FTAs that provide improved market access and are enforceable, he said. Mr. Smith said he does not oppose the Administration’s regional initiatives like the Indo-Pacific Economic Framework and Americas Partnership for Economic Prosperity, but they will not provide US exporters with new market access. The Administration should start by completing negotiations on a free trade deal with the United Kingdom begun by the Trump Administration, he told Brookings attendees.