January 29, 2021

By Steve Holland and Andrea Shalal

WASHINGTON (Reuters) – The Biden administration will review all national security measures put in place by former President Donald Trump, including the U.S.-China Phase 1 trade deal signed in January 2020, White House Press Secretary Jen Psaki said on Friday.

Asked if President Joe Biden viewed the deal as still in effect, she told a White House briefing: “Everything that the past administration has put in place is under review, as it relates to our national security approach, so I would not assume things are moving forward.”

Psaki said the Biden administration was focused on approaching the U.S.-China relationship “from a position of strength, and that means, coordinating and communicating with our allies and partners about how we’re going to work with China.”

Trump signed the Phase 1 trade agreement with Chinese President Xi Jinping in January 2020, easing a nearly 18-month trade war in which U.S. and Chinese goods worth hundreds of billions of dollars were hit by tit-for-tat tariffs, slowing trade between the world’s two largest economies.

Under the deal, Beijing promised to boost purchases of U.S. agricultural and manufactured goods, energy and services by $200 billion above 2017 levels over two years. But its purchases fell far short in 2020.

Chad Bown, a fellow at the Peterson Institute for International Economics, this month released an analysis showing that China’s purchases of U.S. goods in 2020 fell 42% short of the commitment Beijing made in the trade agreement.

No comment was immediately available from the White House on whether the Biden administration was actively considering withdrawing from the interim trade deal.

Treasury Secretary Janet Yellen told lawmakers before her confirmation that the Biden administration would conduct a comprehensive review of China’s implementation of the trade deal, and said Washington would work more closely with allies to address “abusive” practices by the world’s second-largest economy.

(Reporting by Steve Holland; writing by Andrea Shalal; Editing by Dan Grebler)

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