US has no decoupling plans despite ‘complex’ ties with China: trade chief Katherine Tai

The remarks by Trade Representative Katherine Tai follow similar comments by Treasury Secretary Janet Yellen warning that decoupling would be ‘disastrous’
US, China have to be ‘clear-eyed and honest’ about their issues, and recognise they have a responsibility to the world ‘to get things right between us’

US-China relations

Su-Lin Tanin Singapore

Published: 5:27pm, 26 Apr, 2023

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The United States has no intention to decouple from China even as it continues to face trade tensions with Asia’s biggest economy, Washington’s trade tsar has said.

The remarks by Trade Representative Katherine Tai follow similar comments by others, including the Treasury Secretary Janet Yellen, who have warned that decoupling would be “disastrous” for the US and the world.

Tai, speaking to Asia-Pacific journalists in a teleconference, said she carried a similar message during her recent visits to Japan and the Philippines.

Katherine Tai visits a Patagonia store in Tokyo on April 19, 2023. Photo: Bloomberg

Tai said it was important for the two superpowers to be “clear-eyed and honest” about their problems, and recognise they have a responsibility to the world “to get things right between us”.

“I stand by what I said last week – and it’s been consistent across our administration. In terms of decoupling, [it] is not the goal and decoupling is not practicable either as a goal,” she said, referring to remarks she delivered in Japan.

“Nevertheless, we do have a complex and complicated relationship with China, especially around level-playing field issues, and the fairness of the trade and trade opportunities between us.

“So those are issues that we absolutely need to tackle and address in our relationship … it is a matter of not just our own economies, our workers, and our businesses, but as the two largest economies in the world, it impacts the entire world economy.”

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In a major speech last week, Yellen had said that Washington was seeking a “constructive and fair” economic relationship with China, adding that “a full separation of our economies would be disastrous for both countries” and “destabilising for the rest of the world”.

Tai, in Tuesday night’s press conference, said there had been positive regional reactions to the US’ Indo-Pacific Economic Framework ( IPEF) which was aimed at making the world economy more inclusive and sustainable.

The US is set to conduct the third round of negotiations for the IPEF in Singapore next month.

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Seen as a US economic pivot back to Asia-Pacific after its withdrawal from the Trans-Pacific Partnership ( TPP) six years ago and a means to counter China’s growth, the framework brings 14 participating countries together to address challenges in economic and trade matters such as supply chains and labour standards.

It is not a trade agreement but there have been discussions on trade facilitation during negotiations on matters like ease of customs processes, and digitalisation of trade documents, Tai said.

While these discussions also overlap with commitments within landmark regional trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ( CPTPP) and the Regional Comprehensive Economic Partnership Agreement ( RCEP), the IPEF does not conflict with them, Tai said.

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“The unifying theme in the IPEF engagements go to economic issue areas and topics, where by collaboration, the United States and these partners in the Indo-Pacific can promote more resilient, more sustainable and more inclusive economies,” Tai said. “In that sense, I do not see this as being in conflict with other types of arrangements.”

Since the CPTPP and RCEP came into force however, there had also been questions on whether the US would join any of these pacts, especially after former US president Donald Trump abandoned the TPP, the genesis of CPTPP, in early 2017.

Tai said her visits in Asia also generated discussions on priorities key to the next Asia-Pacific Economic Cooperation meeting that the US will host later this year.