By David Lawder
WASHINGTON (Reuters) -The United States will vigorously defend its economic interests and values against the negative impacts of China's economic policies as Beijing doubles down on its state-centered economic system, U.S. Trade Representative Katherine Tai said Wednesday.
Tai told the House Ways and Means Committee that Washington's talks with Beijing about its unmet purchase commitments under a Phase 1 trade deal and broader non-market policies had been "unduly difficult" and new tools were needed.
"Going forward, our strategy will expand beyond only pressing China for change and needs to include vigorously defending our values and economic interests from the negative impacts of China's economic policies and practices," she said.
Washington "cannot stop pushing China for change," she added, but it could no longer wait for China to change policies, adding that tariffs on $300 billion to $400 billion in Chinese imports has not pushed Beijing to make fundamental changes.
China only met about 60% of its Phase 1 deal commitments to increase U.S. purchases by $200 billion during 2020 and 2021 compared with 2017 levels and improve protections for U.S. intellectual property and grant more Chinese market access to U.S. financial services and agricultural biotechnology.
In addition to "continuing to create pressure for China to change," Tai said the United States needed to take steps, such as passing legislation in Congress to promote investments in innovation, semiconductors and the return home of manufacturing supply chains.
"That is the plan that we need to pursue going forward," she said, echoing comments to Reuters last week.
In Beijing, a spokeswoman of the commerce ministry said cooperation between the two countries was the only correct choice and they maintained normal communications.
"We hope the U.S. could adopt a practical and reasonable trade policy on China, and work together with China to push forward a healthy and stable development of bilateral trade ties," Shu Jueting told a regular news conference on Thursday.
Tai has long said trade laws needed to be updated to tackle the challenges of China's massive industrial subsidies, but gave no details of specific changes she sought.
Regarding the Biden administration's proposed Indo-Pacific Economic Framework, a series of negotiations with countries in the region aimed at countering China's influence, Tai said it would not reduce tariffs but would include "meaningful economic outcomes" aimed at setting new, market-based standards for digital commerce, the environment and labor.