U.S. Trade Representative Katherine Tai denied Thursday in a Senate Finance Committee hearing that the need she identified a day earlier before House Ways and Means to “turn the page on the old playbook” (see 2203300051) meant that the Biden administration was walking away from holding China accountable for its commitments under the phase one trade agreement. The U.S. needs to “stick with” phase one and enforce the agreement’s “dispute resolution” provisions, Sen. Rob Portman, R-Ohio, told Tai. “If we just say we’re going to forget that and make that part of the old playbook, I think it sends a terrible message,” said Portman, the former USTR under President George W. Bush. “When China makes an agreement with us, in order to fulfill their obligations, we have to exercise our legal rights.” The old playbook, responded Tai, “focused exclusively on pressuring China” to curb its bad trade behavior. “We are not giving up on pressing China,” she said. “All tools remain on the table with respect to dispute settlement and enforcement,” said Tai. “In fact, what I’m saying is we’re committing to doing more work, and our strategy needs to expand.”

The Office of the U.S. Trade Representative is wading into “unchartered waters” if it tries extending the Lists 1 and 2 Section 301 tariffs on China past their four-year expiration deadlines under the 1974 Trade Act (see 2203120001), emailed David Olave, a Sandler Travis associate and trade policy adviser. List 1 is due to expire July 6, List 2 on Aug. 23. The Trade Act binds USTR to hold a notice-and-comment review period in the last 60 days before each tranche expires if the agency gets written requests from “domestic beneficiaries” to extend the tariffs, said Olave Monday: “We know what the statute says, but we do not have regulations or precedent to rely upon on how to read the statute.” It’s possible USTR “could consider the 301 Actions for Lists 1 and 2 as part of the same investigation,” he said. “The original move by USTR approved tariffs for up to $50 billion, so the two lists are in fact linked to that first scope of action. Therefore, USTR could consider tackling both lists at the same time with regards to comments.” USTR alternatively could try splitting the lists into “two separate tranches and ask for comments on List 1 first and then List 2,” said Olave. “I do not see major legal reasons against doing that, only the overall procedural burden of dealing with two separate and similar issues almost parallel to one another,” he said. “We’ll see what USTR’s next step is soon.” USTR didn’t respond to questions Tuesday.

The U.S. is “watching closely” whether China gives Russia “any form of support” to help Moscow evade the sanctions imposed over the Ukraine invasion, National Security Adviser Jake Sullivan told CNN Sunday. The U.S. won't "stand by and allow any country to compensate Russia for its losses from the economic sanctions,” said Sullivan. “We are communicating directly and privately to Beijing that there will absolutely be consequences for large-scale sanctions-evasion efforts or support to Russia,” he said. A Chinese Foreign Affairs Ministry spokesperson responded Monday that Beijing “opposes all forms of unilateral sanctions and the long-arm jurisdiction of the U.S., and will resolutely defend the legitimate rights and interests of Chinese companies and individuals.”

U.S. Trade Representative Katherine Tai praised President Joe Biden’s decision Friday to join with the G7 and the EU to revoke most-favored-nation treatment of Russian products. The actions “further isolate” Russia from the global economy and hold President Vladimir Putin “accountable for his war against Ukraine,” denying Russia the benefits of membership in the World Trade Organization, said Tai Friday. She said “Putin and his government must pay a severe economic and diplomatic price for his invasion of Ukraine, and we will continue to partner with other WTO Members to further isolate and ostracize Russia in multilateral institutions.”

“Over-supporting” Russia’s “Ukraine position,” as Beijing has done since Russian troops invaded, “risks greatly exacerbating ongoing U.S.-China/Sino-western tensions and inviting tougher restrictions on China trade, investment, and commerce from the U.S. and Europe,” blogged David Hoffman, Conference Board senior vice president-Asia and managing director of its China Center for Economics and Business. “If such a repositioning happens, it would likely produce the consensus in Washington, Brussels, Berlin and elsewhere needed to advance tougher, possibly more collective, policies on Sino-western trade and investment, and harder sanctions on Chinese human rights issues,” said Hoffman Thursday.

China “doesn’t approve of resorting to sanctions to resolve problems,” said a Foreign Affairs Ministry spokesperson when asked at his regular news conference Monday if Chinese companies will comply with U.S. sanctions against Moscow and stop shipping goods to Russia that use U.S. components. “We oppose even more strongly unilateral sanctions without basis in international law,” said the spokesperson. “We demand that the U.S. side, in handling the Ukraine issue and relations with Russia, shall not harm the legitimate rights and interests of China and other sides concerned.” He described China and Russia as “comprehensive strategic partners of coordination.”

President Joe Biden should demand changes to the EU’s Digital Markets Act (DMA), which discriminates against U.S. tech companies, Reps. Suzan DelBene, D-Wash., and Darin LaHood, R-Ill., wrote Wednesday in a letter with some 30 other members of Congress. The group noted the administration has recently engaged with the EU to revise its proposed DMA ahead of potential adoption next month. Originally announced in 2020, the DMA regulates self-preferencing and other competition issues associated with Big Tech. It establishes a "set of narrowly defined objective criteria for qualifying a large online platform" as a gatekeeper. As drafted, the DMA would “single out” American companies by restricting their activity in Europe while favoring European companies, the lawmakers wrote in their letter. The EU’s approach “unfairly targets American workers by deeming certain U.S. technology companies as ‘gatekeepers’ based on deliberately discriminatory and subjective thresholds,” they wrote. The DMA’s discriminatory aspects violate “fundamental principles” of the World Trade Organization, they argued. Reps. Zoe Lofgren, D-Calif.; Adam Kinzinger, R-Ill.; and Doris Matsui, D-Calif., signed. The White House didn’t comment.

China “attaches high importance” to the protection of intellectual property rights, said a Foreign Affairs Ministry spokesperson Friday, reacting to the Office of the U.S. Trade Representative’s 2021 Notorious Markets report on counterfeit and pirated goods flagging China’s AliExpress and WeChat e-commerce platforms for the first time (see 2202170053). “We urge the U.S. side to stop politicizing economic and trade issues,” and to view Chinese companies’ “efforts and achievements in IPR protection in a comprehensive, objective and just manner,” the spokesperson said. Beijing encourages Chinese companies to conduct their overseas businesses “in accordance with market principles and host country laws and regulations,” he said.

Amazon’s foreign sites were removed from the Office of the U.S. Trade Representative's 2021 Notorious Markets List (see 2108270030 and2101140046), which was released Thursday. The platform’s British, German, French, Italian and Spanish sites were included in the 2020 report. The report “highlights online and physical markets that reportedly engage in or facilitate substantial trademark counterfeiting or copyright piracy.” China is the top country of origin for which U.S. Customs and Border protection seize counterfeit goods, the report said. The report flagged for the first time China’s AliExpress and the WeChat e-commerce platform. The report also flagged China’s Baidu, the largest Chinese search engine. DHgate, Pinduoduo and Taobao also made the list. The report draws attention to Singapore-based Fmovies, also known as Bmovies and BFlix, as “one of the most popular websites in the world for streaming pirated copies of popular movies and TV shows.” Russian websites RuTracker, Flvto and MP3juices also made the list. The report credits Brazil’s Operation 404 for its 334 piracy website takedowns, and India for taking the torrent site TamilRockers offline. The report highlights Vietnam’s ongoing investigation of Phimmoi.net, and credits Thailand for seizing more than 100 broadcasting and streaming devices, which were used for the Fwiptv pirating service. The report focused on “the adverse impact of counterfeiting on workers involved with the manufacture of counterfeit goods,” the USTR said. The USTR recommended “labor inspectors, labor-focused organizations, workers’ rights associations, and others target counterfeit manufacturing facilities for Enforcement.”

January’s Bureau of Labor Statistics report showing the largest 12-month increase in the consumer price index in 40 years shows the need for the "immediate elimination and refund of punitive Section 301 tariffs on U.S. imports from China,” said American Apparel & Footwear Association CEO Steve Lamar Thursday. “These price increases are not subtle and not sustainable,” said Lamar: “Consumers are feeling taxed at the register -- online and in-store -- due to record-setting inflationary pressure.” Lamar’s association was one of seven trade groups joining with CTA and the National Retail Federation to file an amicus brief in the Section 301 litigation urging the U.S. Court of International Trade to vacate the Lists 3 and 4A tariffs on Chinese imports due to violations of Administrative Procedure Act protections against sloppy and unresponsive federal rulemakings.