Deputy USTR Nominee Sarah Bianchi on Tariffs against China and Chinese Digital Trade Regulation

At a Senate Finance Committee hearing on the nominations of several Biden administration officials, Senator Ron Wyden asked Sarah Bianchi, one of the Biden administration's nominees for Deputy U.S. Trade Representative, some questions about U.S. trade policy as it relates to China. The first question was about the use of tariffs in order to induce a change in China's trade practices; the second question was about Chinese digital trade regulation. On the point about tariffs, Bianchi did not give many specifics, but rather just emphasized the review being carried out by the Biden administration of U.S. trade policy as it relates to China. On the digital trade issue, Wyden set out clearly his long-standing concerns about what he referred to as China's "digital sovereignty," but Bianchi did not offer much clarification as to how the Biden administration might approach the issue, aside from a reference to working with allies.

The full text of their exchange follows:

Senator Wyden:

Ms. Bianchi, I understand that if confirmed, you're going to be responsible for China policy, in your role at the USTR. The previous administration, in my view, correctly diagnosed in some respects China's trade cheating, but it broadly applied tariffs as a universal kind of cure all. To date that strategy hasn't done a whole lot to change China's behavior. The Phase One deal, for example, provided pretty marginal improvements. China's exports continue to expand; American workers, consumers and businesses continue to face hardships. All in all it seems that Chinese companies have simply built the tariffs into their cost of doing business. So my question to you is, if confirmed, how would you ensure that tariffs are more targeted and more effective at putting pressure on China to get them to actually change their behavior.

Sarah Bianchi:

Well thank you for the question Senator, and I agree absolutely with the premise of your statement that the diagnosis was correct, but the execution was not always. As I understand it, at the suggestion of Senator Portman, the USTR is doing a top to bottom review of all of the China policy and tariffs and really so that we can, or the administration, can come with a more effective strategic, strategy. Both enforcing existing opportunities and exploring where there's gaps, and that is something that I would look forward to working with you and this committee and the entire administration, if I'm confirmed.

Wyden:

Now recognizing that the China review is ongoing and certainly no one can foreordain what the results will be, will you commit to brief the committee within 15 days on the administration's conclusion of its China review on expected next steps and shifts, any shifts, in US China policy.

Bianchi:

Absolutely.

Wyden:

Thank you. Now, as you and I talked about, I continue to be very concerned about China's digital practices, including censorship and their theory of what I call digital sovereignty, the idea that the Chinese government can control the version of the internet that its citizens can access. China's views are really, in my view, a combination of protectionism and authoritarianism. These assaults on an open Internet not only quell free expression in China and abroad, but in my view, are blatantly anti-competitive. The Chinese government is notorious for restricting access to American websites and services through the Great Firewall, leaving space basically for their homegrown competitors to grow. Perhaps more alarming is the fact that other regions are following China's lead in this hugely important economic space, which could result in a less open, less free, less democratic, internet. Can you talk about how the United States can work to counter China's digital authoritarianism and anti competitive digital practices?

Bianchi:

Absolutely, and I could not agree more with your diagnosis. It's a real challenge for the United States. I think, first of all, I look forward to getting into the building and really understanding granularly some of what the types of manipulation that are currently going on and how we might stop them. But I also think Senator, as we discussed, that this is a really good opportunity to work with our allies, and I think there's a lot of potential in digital trade in particular to work with allies and to set a standard that forces China to change some of its behavior and that's what I would want to work with you.