The United States declared on Tuesday that it would compete with China and its “harmful” trade practices this year through domestic post-pandemic recovery and stronger ties with allies. “We are clear-eyed about China’s doubling down on its harmful trade and economic abuses,” the report by the Office of the US Trade Representative (USTR) said. “We are also considering all existing tools – and will potentially seek new ones as needed – to combat the harms of China’s state-led, non-market practices.” While light on details of what steps might be taken, the USTR annual report to the US Congress, which describes the US trade policy agenda for the coming year, said that US officials would bolster ties with American trade allies – other market-based economies also concerned about Chinese business practices. The report accused China of hurting supply chains by “unduly concentrating production of certain goods”. The ability to defend against unfair Chinese practices requires that market economies act in concert to confront policies and practices that are fundamentally at odds with a global trading system based on market competition USTR annual report “The ability to defend against unfair Chinese practices requires that market economies act in concert to confront policies and practices that are fundamentally at odds with a global trading system based on market competition,” it said. This year US President Joe Biden will continue to promote Build Back Better, a US$2 trillion bill that has met resistance in the US Senate over inflation worries, the report said. That agenda would “allow the United States to engage and compete with China from a position of strength,” it said. Biden is expected to promote the legislation during his State of the Union address on Tuesday evening. The White House continues to believe China is using forced labour to produce exports as an “extreme form of unfair competition”, the report stated. The US will thus enforce the 2021 Uygur Forced Labour Prevention Act, which Biden signed into law in late December and is expected to go into effect in June; it bars goods from the Xinjiang region of China from entering the country. The report mainly covers a “litany of well-known issues” yet offers no solutions, said Douglas Barry, communications vice-president with the US-China Business Council, a 265-member advocacy group in Washington. “Official discussions seem largely at a standstill with leaders preoccupied with other matters,” Barry said. “Looming in nine months are US midterm elections, which make compromises unlikely.” The report indicates, however, that US officials may dial back a four-year trade war with China to avoid hurting American businesses. Former US president Donald Trump initiated the dispute, which raised tariffs on US$550 billion worth of imports and exports. A phase-one trade deal to ease the dispute expired in December. Was the US-China phase-one trade deal a ‘historic failure’, and what’s next? “We are mindful of the effects that trade actions can have on American businesses and workers,” the report said, adding that “targeted” tariff exclusions protect domestic interests and that “we will keep open the option of further tariff exclusions processes as warranted”. Tariff cuts make sense given the world’s “very high inflation”, said Kevin Chen, a global affairs-focused adjunct associate professor at New York University. “I would expect the Biden administration to cut some tariffs for consumer goods,” Chen said. “It would help control inflation and probably help lower-income families.” China’s official Xinhua News Agency published a commentary last week that the country had progressed in intellectual property rights, a top US concern, while “piracy and counterfeiting were and still are a problem in the United States”. It is hoped that the US adopt reasonable and practical China trade policies, move in the same direction with China, uphold mutual respect, mutual benefit and win-win outcomes Liu Pengyu “China and the US share common interests, and cooperation is the only right choice,” said Liu Pengyu, spokesman for Beijing’s Washington embassy. “It is hoped that the US adopt reasonable and practical China trade policies, move in the same direction with China, uphold mutual respect, mutual benefit and win-win outcomes, and push China-US relations back onto the correct track of sound and stable development,” he said. The Xinhua News Agency commentary also called for cooperation and forecast “no winner in a trade war”. “Avid as some US politicians might be to scramble for a new arsenal for their conjured-up rivalry with China, the mutual dependence of the world’s two largest economies is undeniable,” Xinhua said. “So is the mutually beneficial nature of their economic and trade relations.”