Biden administration sets up “strike force” to attack China over trade


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WASHINGTON (Reuters) – The United States will target China with a new “strike force” to tackle unfair trade practices, the Biden administration said on Tuesday, as it unfolded the findings of a review of the American access to critical products, from semiconductors to electricity – vehicle batteries.

FILE PHOTO: Chinese and US flags fly in front of a US company building in Beijing, China January 21, 2021. REUTERS / Tingshu Wang

The “trade supply chain strike force,” led by the US Trade Representative, will look for specific violations that have contributed to a “hollow” of supply chains that could be addressed by trade remedies, including towards China, senior administration officials told reporters. .

Officials also said the Commerce Department plans to initiate a Section 232 investigation into the national security impact of imports of neodymium magnets used in engines and other industrial applications, which states -United are largely sourced from China.

President Joe Biden ordered the review of critical supply chains in February, requiring executive agencies to report within 100 days on risks to U.S. access to critical products such as those used in pharmaceuticals as well as rare earth minerals on which the United States depends. foreign sources.

While not explicitly directed against China, the review is part of a broader strategy by the Biden administration to strengthen the competitiveness of the United States in the face of economic challenges posed by the world’s second-largest economy.

The United States has faced serious difficulties in obtaining medical supplies during the COVID-19 outbreak and now faces serious bottlenecks in a number of areas, including computer chips, which is stalling the production of goods such as cars.

U.S. agencies are required to issue more comprehensive reports a year after Biden’s order, identifying gaps in domestic manufacturing capabilities and policies to address them.

TRADE WARS WITH UNSANTED ALLIES

A senior official said the United States had faced unfair trade practices by “a number of foreign governments” in the four supply chains covered by the initial review, including government subsidies and forced transfers of intellectual property.

“Clearly, a number of Chinese industrial policies have contributed to the vulnerability of US supply chains,” the official said. “I think you’re going to see this strike force focus on some of our political developments in China. “

The United States was not seeking “to wage trade wars with our allies and partners,” the official added, noting that the strike force would focus on “highly targeted products.”

But senior officials offered few new measures to immediately alleviate chip supply shortages, noting in a backgrounder that the Commerce Department would work to “facilitate the flow of information” between companies. chipmakers and end users and increase transparency, a previous step for Reuters. reported here.

In medicine, the administration will use the Defense Production Act to speed up efforts to manufacture 50 to 100 essential drugs nationally rather than relying on imports.

And to remedy the bottlenecks in the supply of timber to steel that have raised fears of inflation, the administration is launching a working group focused on “the construction and construction of housing, semi -conductors, transport, agriculture and food ”.

Semiconductors are at the center of the sprawling legislation now before Congress that would inject billions of dollars into building nationwide production capacity for chips used in everything from consumer electronics to military equipment.

Biden has said China will not surpass the United States as a world leader under his watch, and facing Beijing is one of the few bipartisan issues in an otherwise deeply divided Congress.

But some lawmakers have expressed concern that a set of China-related bills includes huge taxpayer-funded spending for companies without guarantees to prevent them from sending related productions or research to China. .

The official said that a measure of the success of the supply chain effort would be more diverse suppliers for critical products from allies and like-minded partners, and fewer geopolitical competitors.

“We’re not going to build everything here at home. But we need to see more domestic manufacturing capabilities for key products, ”the official said.

Reporting by Michael Martina and Trevor Hunnicutt; Editing by Mary Milliken and Leslie Adler

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