US Trade Rep Tai exchanges objections with China's commerce minister in Detroit meeting

2/2 © Reuters. FILE PHOTO: U.S. Trade Representative Katherine Tai speaks in Brasilia, Brazil March 8, 2023. REUTERS/Adriano Machado 2/2

By David Lawder

DETROIT (Reuters) -U.S. Trade Representative Katherine Tai raised complaints about China's state-led economic policies during a meeting on Friday with Chinese Commerce Minister Wang Wentao, who objected to U.S. tariffs and trade policies, their offices said.

But statements from the U.S. Trade Representative's office and China's Commerce Ministry both emphasized the need for Washington and Beijing to maintain communication on trade.

"Ambassador Tai highlighted the need to address the critical imbalances caused by China’s state-led, non-market approach to the economy and trade policy," USTR said in a statement released after the meeting on the sidelines of an Asia Pacific Economic Cooperation (APEC) conference in Detroit.

"She also raised concerns about PRC (People's Republic of China) actions taken against U.S. companies operating there,"

China's Commerce Ministry said in a statement that Wang raised complaints about U.S. economic and trade policies toward China, including U.S. tariffs on Chinese goods, economic and trade issues related to Taiwan, and on the U.S.-led Indo-Pacific Economic Framework (IPEF) that exclude China.

Tai on Saturday will hold a ministerial meeting of countries in the IPEF talks, which exclude China and aim to provide a U.S.-centered alternative to its influence. Last week, she announced initial trade agreements with Taiwan. China claims the self-governed island as its own territory.

USTR is conducting a four-year review of U.S. tariffs on hundreds of billions of dollars worth of Chinese imports, imposed in 2018 and 2019 by then-President Donald Trump.

Tai has long raised objections to China's attempts to dominate certain industries using massive state subsidies and said such issues continue to come up in the relationship.

Asked during a press conference whether the U.S. would resort to using further trade tools to address China's practices, such as a new "Section 301" investigation that could lead to more U.S. tariffs, Tai said that "aspects" of the Biden administration's response were already evident in U.S economic policies.

"The benefit of sitting down and having a conversation with interlocutors from Beijing is so that we can understand each other better and understand how we are experiencing the impacts that we have on each other's economies," Tai said.

CABINET-LEVEL DISCUSSION

Wang's meetings with Tai in Detroit and with U.S. Commerce Secretary Gina Raimondo in Washington on Thursday marked the first cabinet-level exchange in months between U.S. and Chinese officials, following a series of setbacks that raised tensions between the world's two largest economies.

Tai stressed the importance of maintaining open lines of communication between Washington and Beijing as they spoke on the sidelines of APEC, the U.S. statement said.

The Chinese statement was similar in tone to concerns raised with Raimondo about U.S. trade, investment and export policies.

U.S. President Joe Biden and Chinese President Xi Jinping pledged more frequent communications at a G20 summit in Indonesia last November to avoid U.S.-China tensions from turning into a new Cold War.

But those plans suffered several setbacks, starting with the downing of a suspected Chinese spy balloon in U.S. coastal waters.

These irritants continued through last Sunday, when G7 leaders pledged to resist China's "economic coercion" and Beijing responded by declaring U.S. memory chip maker Micron Technology (NASDAQ:MU) a national security risk, banning its sales to major domestic industries.