U.S. President-elect Joe Biden has told the New York Times he will not immediately lift U.S. tariffs on Chinese imports, but would wait for a review of the U.S.-China trade deal. Some Chinese analysts expressed “cautious optimism” after Biden chose economists with no obvious anti-China views, including Treasury Secretary nominee Janet Yellen, for his cabinet. The new team is unlikely to be chaotic and erratic in the trade talks, though tensions will likely persist given their longstanding grievances over China, and the intention to contain China’s rise, experts noted. Yellen will have direct dealings with China, as the U.S. Treasury Department is tasked with reviewing other countries’ currency policies, imposing sanctions on other countries and entities, as well as taking part in trade policy formation. It also oversees the collection of tariffs on hundreds of billions of dollars worth of Chinese goods. Treasury Secretary Mnuchin was also a key member of the U.S. negotiating team with China. 

“The Biden administration may revise Trump’s erratic approach of imposing sanctions on certain Chinese companies. At the same time, the U.S. may cooperate with its allies to establish rules on human rights, freedom of speech, and the environment to contain China’s development,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times. While Chinese officials have not spoken about the future of the phase one trade agreement with the U.S., lingering tariffs or future trade negotiations with the U.S. under Biden, they have sent clear positive signals that they will carry out the deal and want to engage with the U.S. in a constructive manner, according to the Global Times. 

A Chinese Customs official pointed out that China has fulfilled its commitment under the phase one trade agreement with the U.S. to implement dozens of quarantine protocols that paved the way for expanding imports of U.S. animal and plant products. “As of now, 37 inspections of animal and plants related to the China-U.S. economic and trade agreement have been completed in a timely and high-quality manner,” Zhao Zenglian, head of the Department of Animal and Plant Quarantine at the General Administration of Customs (GAC), said at a press briefing. Since the phase one trade agreement took effect, the GAC has addressed issues related to market access for U.S. potatoes, barley and pet foods, and removed a ban on U.S. poultry imposed during an earlier bird flu epidemic. Reciprocally, Chinese citrus, fresh jujube and pears were allowed to be exported to the U.S., Zhao added. “This is very clearly a positive signal that China is continuing to implement the phase one deal in line with its domestic demand and economic trends,” Li Yong, Deputy Chairman of the Expert Committee of the China Association of International Trade, told the Global Times. In October, Chinese imports of U.S. soybeans – a closely watched gauge of the progress of the phase one deal – skyrocketed almost 200% year-on-year, reaching 3.4 million tons.

Last week, the U.S. Treasury Department imposed sanctions on the China National Electronics Import & Export Corp (CEIEC) for allegedly “supporting Venezuelan President Nicolas Maduro’s efforts to undermine democracy”. China’s cooperation with Venezuela is in line with international rules under the principles of mutual development and should not be politicized, Hua Chunying, Spokeswoman for China’s Foreign Ministry said, adding that China will take necessary measures to protect the rights of Chinese companies. The U.S. government also added four Chinese companies to its blacklist: Semiconductor Manufacturing International Corp (SMIC). China National Off-shore Oil Corp (CNOOC), China Construction Technology Co and China International Engineering Consulting Corp. The move brings the total number of blacklisted Chinese companies to 35. A recent executive order by the U.S. President prevents U.S. investors from buying these companies’ securities.

China’s exports to the U.S. rose by 1.6% to USD354 billion in the first 10 months this year. However the Global Times reported that trade between China and the U.S. is still thorny and uncertain, as issues like tariffs and higher shipping costs loom large. Many Chinese enterprises, not seeing a turnaround in the situation, have shifted their focus from U.S. to other markets, mainly Europe.