US-China Trade Tensions Linger on Sidelines of WTO Conference

China minister of commerce Wang Wentao met with U.S. Trade Representative (USTR) Ambassador Katherine Tai for a sideline meeting during the 13th Ministerial Conference of the World Trade Organization (WTO) in Abu Dhabi on Monday, wherein the Chinese official brought up Beijing’s “solemn concerns” about impediments to the U.S.-China trade relationship.

The Office of the USTR said Tai engaged in a “robust discussion” with the trade minister, raising concerns about China’s excess capacity of steel on the global market and “the ongoing imbalances caused by China’s state-led, non-market approach to trade policy.”

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Meanwhile, Wang brought up China’s misgivings about the continuation of Section 301 tariffs and trade issues surrounding Taiwan, according to a report from the South China Morning Post (SCMP). Last week, U.S. officials including Rep. Mike Gallagher (R-Wi.), the chairman of the Select Committee on China, visited Taiwan in a show of support of its independence from China.

“Ambassador Tai and Minister Wang agreed to work on areas of shared cooperation, including their respective commitments to the WTO,” the USTR readout said.

Ahead of the four-day conference, USTR released its annual report on China’s WTO compliance, maintaining that the country “remains the biggest challenge to the international trading system established by [the WTO].” Twenty-two years since it acceded to the organization, “China still embraces a state-directed, non-market approach to the economy and trade, which runs counter to the norms and principles embodied by the WTO,” Tai wrote.

“Even more problematic, China’s approach targets industries for global market domination by Chinese companies using an array of constantly evolving non-market policies and practices,” she added. The report detailed the breadth and scale of these misdeeds and “the serious harm that they cause to workers, businesses, and industries in the United States and around the world.”

“It is a stark reminder that the members of the international trading system must continue to work together to defend our shared interests against these many harmful policies and practices, particularly in sectors targeted by China’s industrial plans,” she wrote.

China’s Ministry of Commerce hit back at the report’s claims on Monday, releasing a statement via ChinaDaily.com claiming the U.S. has “disregarded China’s achievements in fulfilling its WTO commitments, distorted its progress in building a market economy and advancing reform and opening up, and made groundless and arbitrary accusations on its economic and trade policies.”

The ministry said the U.S. has “smeared” the country’s legitimate trade practices as “economic coercion.”

“Exactly opposite to the U.S. statements, China’s positive and constructive role in promoting the multilateral trading system has been acknowledged and appreciated globally,” the ministry said.

“With ‘America first’ as its starting point, the United States violated WTO rules, carried out unilateral trade bullying, and formulated discriminatory industrial policies,” actions that the ministry said disrupted global industry and supply chains and upended international trade order.

During his official statement at the conference on Monday, Wang asserted that “economic globalization has come to a crossroad.”

“The world we live in is confronted by slow economic recovery, sluggish trade growth, and intensifying global challenges such as food crises, climate change and development divides,” he said. Over the past two decades, “opening-up has been our way of achieving development and benefiting the whole world,” Wang said of China’s trade policy. “China is moving forward on a Chinese path to modernization through high-quality development. Its door to the world will only open even wider.”

China plans to advance digital, sustainable and innovation-based trade with the goal of creating a business environment that is “market-oriented, law-based and up to international standards.” The country plans to shorten negative lists for foreign investment and remove restrictions for foreign investment in the manufacturing sector, he added.

“We are confident in making solid economic progress in the new stage of high-quality development, which will translate into sustained momentum for world trade and economic growth.”