Opening channels of communication is essential to preserve the positive economic ties that exist between the US and China, US Commerce Secretary Gina Raimondo said CNN’s Dana Bash on Sunday.
Last Monday, Raimondo returned from a four-day trip to the second-largest economic power in the world. She is the first secretary of commerce to travel to China in five years and the fourth member of the cabinet to do so this year. The key to her trip was having a candid conversation while taking a firm stance.
She remarked on CNN’s “State of the Union” that, “We know for a fact that not talking leads to escalation, miscalculation, and misunderstanding, which is harmful for the American people. It’s detrimental to American workers. It compromises our country’s security. The idea that talking and speaking are signs of weakness is not one I accept.
She emphasised that maintaining the $700 billion bilateral connection is beneficial for both the two countries in question and the world economy as a whole. A trade battle over semiconductors, which are used to produce chips for vehicles, smartphones, high-end computers, and weaponry systems, has been a major stumbling block in the relationship.
The Biden administration established a comprehensive set of export regulations last autumn, prohibiting Chinese firms from acquiring sophisticated chips and chip-making machinery without a licence. The rule also limits the help that “US persons” (including US residents and holders of green cards) may give to the “development or production” of chips at certain Chinese manufacturing sites.
Early this summer, China retaliated by imposing its own export restrictions on the raw elements germanium and gallium, which are crucial for the manufacture of semiconductors. Raimondo made it abundantly apparent during her visit to China that the US does not want to fully sever ties with China when it comes to these semiconductors and chips.
Every year, we export chips worth billions of dollars to China. We’ll keep doing it because it’s important for American firms and the economy, she said. “What we are going to do, and we will not compromise on, is stop China from buying our most advanced, most potent semiconductors for its military.”
Asserting that her position on China remains tough, Raimondo said that the Biden administration during her time as secretary added about one-third of the companies to the Department of Commerce’s list of corporations subject to trade restrictions.
There are many tools in our toolkit. export restrictions, screening of outbound investments, tariffs, and countervailing charges. If you will, we do have sticks, and we are fully prepared, willing, and able to use those if required,” Raimondo stated.
A working group to facilitate two-way discussions of trade and investment issues was established last week and will meet twice a year, according to the US Commerce Department.