Michael Martina and David Lawder

WASHINGTON (Reuters). – U.S. trade representative Katherine Tai met with Vice Premier Liu He from China on Friday in order to determine if bilateral engagement with Beijing could address U.S. criticisms of China’s trade, subsidy, and other practices.

The call marks the second time that Tai and Liu have spoken and it follows Tai’s speech on Monday https://www.reuters.com/business/bidens-new-china-trade-plan-echoes-trumps-assumes-beijing-wont-change-2021-10-04 announcing that she would seek “frank” talks with Beijing and hold China to its commitments under a ‘Phase 1’ trade deal negotiated by former President Donald Trump.

USTR stated in a statement that “Ambassador Tai and Vice Prime Liu examined the U.S. China Economic and Trade Agreement and concluded that they would continue to discuss certain remaining issues.”

Prior to the conference, an official from USTR stated that Tai will give Liu an assessment on China’s progress in the implementation of the Phase 1 deal. He also promised to buy U.S. goods that were not meeting targets. Additionally, she would voice concerns over China’s “nonmarket” economic practices.

According to the official, Beijing “recognizes that it is becoming increasingly clear that its authoritarian state-centric approach is increasing in strength and resistance to solving our structural problems.” Our primary goal will remain to build resilience and compete, diversify markets and limit the negative effects of Beijing’s practices.

According to the official, Tai intends to base his future engagements with China on China’s response to “tonight’s call”. He declined to talk about possible next steps but stated that Tai won’t seek Phase 2 trade negotiations with Beijing to resolve structural problems such as state subsidies.

Jan’s ‘Phase 1’ deal eased the long-running tariff war between two world’s largest economies. The deal was based largely upon China’s pledge to increase U.S. farm, manufactured, and energy purchases by $200 billion in two years. It also included increased protections of copyrights, trademarks, and other intellectual property.

Trump’s Administration envisaged that a Phase 2 negotiations would be held to address difficult issues like subsidies for state enterprises or China’s strategy industrial policies.

The official was asked if America would use another ‘Section 301″ investigation, which could result in more tariffs being placed on Chinese goods if engagement fails with Beijing. He replied, “The full range of instruments we have to protect American workers farmers and businesses from unfair trading practices.”

Tai is fluent in Mandarin and was born to Taiwanese immigrants. The USTR official stated that Tai considers this call “a test whether or not that type of engagement will be helpful to secure the outcomes we’re seeking, and that we’re going into with the hope that China will respond positively.”