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U.S.-China News Brief
June 24, 2022

Tariffs and Trade

On June 22, U.S. Trade Representative Katherine Tai testified at a Senate Appropriations Committee hearing. During her testimony, she discussed several aspects of the Biden administration’s trade policies and agenda, including the “realignment of the U.S.-China trade relationship.”

She said, “The United States has repeatedly sought and obtained commitments from China, only to find that lasting change remains elusive. That is why we need to turn the page on the old playbook….We have to use all available tools, and develop new tools, to defend our economic interests and values.” She went on to discuss the important role of greater cooperation and trade agreements in the Indo-Pacifc, including the Indo-Pacific Economic Framework and the U.S.-Taiwan Initiative on 21st Century Trade. Tai did not rule out the use of tariffs as “leverage.”

[Full Testimony]

On June 23, Chinese Ministry of Commerce Spokesperson Shu Jueting said, “The removal of all extra tariffs imposed on Chinese goods by the United States will benefit both countries and the world” and continued, “Given the current situation of soaring inflation, the sooner the U.S. side lifts its additional tariffs on Chinese goods, the sooner consumers and businesses will benefit.”

Former U.S. Ambassador David Adelman said inflation would be a main issue for the upcoming midterm elections, continuing, “While the president is limited in his ability to control inflation, there is one important tool in his toolbox. That is the ability to relieve the pressure on the American economy and American consumers that is caused by these very high tariffs rates that are imposed on more than $370 billion annually of Chinese imports.”

Former trade official Wendy Cutler also spoke about the benefits of both the U.S. and China rolling back tariffs. However, she also noted, “It’s important that we recognize there’s little trust, I don’t think we should start big, I think we should start small, find very practical areas where we could quietly make progress and build on that over time.”

On June 13, high level U.S. and Chinese officials met in Luxembourg in what is seen as a precursor to Biden-Xi talks. Jake Sullivan and Yang Jiechi discussed bilateral, regional, and international topics in what was described as a “candid, substantive, and productive” 4.5 hour meeting. President Biden is expected to have a meeting with Xi Jinping “soon.” However, any official announcements regarding tariffs are not likely until after the G7 summit.

BRICS

This week, the BRICS Business Forum and BRICS Summit virtually brought together the leaders of the five BRICS countries – Brazil, Russia, India, China, and South Africa – as well as additional invited world leaders.

Xi Jinping delivered virtual remarks on June 22 and June 23. Xi warned against a Cold War mentality and “bloc confrontation,” promoted his Global Security Initiative and Global Development Initiative, proposed a free-trade agreement, and discussed a need for greater solidarity and cooperation. He also spoke out against sanctions and criticized the actions and policies of “major developed countries.”

He pointed out the drastic changes the world has been facing recently, saying, “We should refuse to be led astray by any turn of events or intimidated by any risk. We should rise to challenge and forge ahead with resolve toward the goal of building a community with a shared future for mankind.”

Xi also mentioned some of China’s domestic challenges and goals. He said, “We will step up macroeconomic policy adjustment, and adopt more forceful measures to deliver the economic and social development goals for the whole year. In the second half of this year, the Communist Party of China will convene its 20th National Congress, which will chart the course for the next phase of China’s development.”

Following the Summit, the five BRICS countries released a joint statement, the XIV BRICS Summit Beijing Declaration. The 75-point declaration includes sections on global governance, COVID-19, peace and security, economic recovery, sustainable development, people-to-people exchanges, and institutional development.

[June 22 Speech] [June 23 Speech] [Full Declaration Text]

Additional News

On June 19, the Chinese Foreign Ministry released a more than 25,000 word response to Secretary Blinken’s May 26 China speech. According to U.S. Ambassador Nicholas Burns, Blinken’s remarks, but not the rebuttal, have been censored in China. [Full MFA Response]

Energy demands in China soar as the country experiences extremely high temperatures. Li Keqiang has called for more coal production to prevent power outages during the summer.

On June 21, strict U.S. import restrictions on goods from Xinjiang took effect. This is part of the Uyghur Forced Labor Prevention Act.

On June 24, a U.S. naval plane flew over the Taiwan Strait. Earlier in the week, 29 Chinese military planes flew near Taiwan.