Evelyn Reynolds

Patrick Gelsinger was 18 years old and four months into an entry-level job at Intel when he heard a pivotal sermon at a Silicon Valley church in February 1980. There, a minister quoted Jesus from the Book of Revelation.“I know your deeds, that you are neither cold nor hot. I wish you were either one or the other!” the minister said. “So, because you are lukewarm — neither hot nor cold — I am about to spit you out of my mouth.”The words jolted Mr. Gelsinger, reshaping his philosophy. He realized he had been a lukewarm believer, one who practiced his faith just once a week. He vowed never to be neither hot nor cold again.Now, at age 60, Mr. Gelsinger is hot about one thing in particular: Revitalizing Intel, a Silicon Valley icon that lost its leading position in chip manufacturing.The 120,000-person company was a household name in the 1990s, celebrated as a fount of innovation as its microprocessors became the electronic brains in the vast majority of computers. But Intel failed to place its chips into smartphones, which became the device of choice for most people. Apple and Google instead grew into the trillion-dollar emblems of Silicon Valley.Rejuvenating Intel is partly about Mr. Gelsinger’s own ambitions. As a young engineer, he once wrote down a goal of leading Intel one day. But in 2009, after spending his entire career at the company, he was forced out. A year ago, he was wooed back for a surprise second chance.His mission is also about America’s place in the world. Mr. Gelsinger wants to return the United States to a leading role in semiconductor production, reducing the country’s dependence on manufacturers in Asia and easing a global chip shortage. Intel, he believes, can spearhead the charge. If he succeeds, the impact could extend far beyond computers to just about every device with an on-off switch.The quest faces many obstacles. Steering a $200 billion company while chasing a goal of raising U.S. chip production to 30 percent globally from about 12 percent today requires tens of billions of dollars, political maneuvering with governments and years of patience.“You’re going to have to spend a lot of money and you’re going to have to spend it for a long period of time,” said Simon Segars, who recently stepped down as chief executive of Arm, a British company whose chip designs power most smartphones. “Whether governments have the stomach for that over the long term remains to be seen.”In four interviews, Mr. Gelsinger acknowledged the difficulties. But the father of four and grandfather of eight has pursued the goals with intensity.In March, he unveiled a $20 billion project to add two chip factories to Intel’s complex near Phoenix. Last month, he joined President Biden to showcase a $20 billion investment in a new chip manufacturing site near Columbus, Ohio. On Tuesday, he announced a $5.4 billion deal to buy Tower Semiconductor, which operates chip production services from factories in four countries.To drum up government support for his investments, Mr. Gelsinger has attended three virtual White House gatherings, spoken with two dozen members of Congress and four governors. He became a key ally to President Biden over a $52 billion package that would provide grants to companies willing to set up new U.S. chip factories. And in Europe, Mr. Gelsinger met with President Emmanuel Macron of France, President Mario Draghi of Italy, their counterparts in other countries, and the pope.Mr. Gelsinger with President Emmanuel Macron of France last June.Pool photo by Stephane De SakutinIt has been a tough slog. Intel’s stock has dropped as Mr. Gelsinger committed huge sums to chip manufacturing. The $52 billion funding package stalled for months in the House of Representatives, finally passing this month as part of broader legislation that must now be reconciled with a Senate version. Criticism of the chief executive from Wall Street analysts has ramped up.“Every day the job is way bigger than me,” Mr. Gelsinger said. But “it’s OK,” he added, because he believes he has help. “God, I need you showing up with me today because this job is way more than I could possibly do myself.”Faith and WorkIf his father had managed to buy a farm, Mr. Gelsinger would almost certainly have inherited it and become a farmer. That was expected in Robesonia, a borough in Pennsylvania Dutch country where he was raised and worked on his uncles’ farms.But there was no farm to inherit. So at age 16, Mr. Gelsinger passed a scholarship exam that took him to the Lincoln Technical Institute, a for-profit vocational school, where he earned an associate degree.Mr. Gelsinger tells this and other stories self-deprecatingly in a 2003 book of advice that he wrote for Christians titled “Balancing Your Family, Faith & Work,” which was expanded in 2008 and titled, “The Juggling Act: Bringing Balance to Your Faith, Family, and Work.”In 1979, he was interviewed at the technical institute by a manager from Intel. Unlike most of the other students there, Mr. Gelsinger had heard of the company. He breezed through questions related to his studies and predicted he could earn bachelor’s, master’s and Ph.D. degrees while holding down a full-time job, said Ronald Smith, the former Intel executive who conducted the interview.“He is very smart, very ambitious and arrogant,” Mr. Smith said he wrote in a summary of the conversation. “He’ll fit right in.”Mr. Gelsinger took his first plane ride to interview at Intel in California, where he started in October 1979 as a technician. He worked on improving the reliability of microprocessors while studying for a bachelor’s degree at Santa Clara University.He soon started hanging out with the engineers who designed the chips, coming up with ideas to test the chips more efficiently. In 1982, he became the fourth engineer on the team that introduced the groundbreaking 80386 microprocessor.During a 1985 presentation near the completion of the chip, Mr. Gelsinger chided Intel’s leaders Robert Noyce, Gordon Moore and Andy Grove about balky company computers that were slowing the process.A few days later, he got a surprise call from Mr. Grove. The Hungarian-born executive, then Intel’s president who later wrote the management book “Only the Paranoid Survive,” had built a culture where lower-level employees were encouraged to challenge superiors if they could back up their positions. Mr. Grove began mentoring Mr. Gelsinger, a relationship that lasted three decades.By 1986, Mr. Grove had convinced Mr. Gelsinger not to pursue a doctorate at Stanford University and instead made him, at age 24, the leader of a 100-person team designing Intel’s 80486 microprocessor. Mr. Gelsinger eventually earned eight patents, became Intel’s youngest vice president in 1992 and the first person with the title of chief technology officer in 2001.His climb up Intel’s ladder was shaped by another priority: his faith.Though raised in the mainstream United Church of Christ, Mr. Gelsinger said he didn’t really become a Christian until he attended the nondenominational church in Silicon Valley where he met Linda Fortune, who later became his wife. It was at that church in 1980 that he heard the minister quote Revelations.After Mr. Gelsinger became a born-again Christian, he wrestled privately with whether to join the clergy. In a 2019 oral history conducted by the Computer History Museum in Mountain View, Calif., he said he eventually decided to become a “workplace minister,” where “you really view yourself as working for God as your C.E.O., even though you’re working for Intel.”Intel SlipsIn the mid-2000s, Mr. Gelsinger’s footing within Intel shifted. Mr. Grove retired as board chairman in 2004. Another executive, Paul Otellini, was appointed chief executive in 2005. Mr. Gelsinger said he was a “dissonant voice” on Intel’s senior executive team.Mr. Otellini pushed him to leave, Mr. Gelsinger said. (Mr. Otellini died in 2017.) In 2009, Mr. Gelsinger accepted an offer to become president and chief operating officer of EMC, a maker of data storage gear.Departing Intel after 30 years as a company man hurt badly. “I was just so angry and emotional about the departure,” Mr. Gelsinger said.In 2012, he became chief executive of VMware, a software company that EMC controlled. He weathered challenges there, including an aborted effort to compete in cloud computing services with Amazon, but broadened the company’s business and nearly tripled revenues.During those years, Intel slipped. For decades, the company had led the industry in delivering regular factory advances that pack more processing power into chips. But delays in perfecting new production processes allowed rivals such as Taiwan Semiconductor Manufacturing Company and Samsung Electronics to grab the lead in manufacturing technology between 2015 and 2019.Mr. Gelsinger in 2006, when he was senior vice president of Intel’s digital enterprise group, with the company’s dual core next generation chip.Justin Sullivan/Getty ImagesToday, T.S.M.C. makes chips designed by hundreds of other companies. It supplies the world with more than 90 percent of the chips made with the most advanced production technology. Because it is headquartered in Taiwan, which China has laid territorial claim to, its location has made it a political and supply chain chokepoint should conflict erupt over the island nation.Intel was also suffering from its missteps in the mobile market, which consumes billions of processors compared with the hundreds of millions sold for computers.After convincing Apple to use its chips in Macintosh computers in 2005, Intel had a chance to win a place in the iPhone, which debuted in 2007. But Mr. Otellini said in a 2013 interview in The Atlantic that he turned down the opportunity because the price that Apple was willing to pay for chips was too low to make a profit.The decision, which Mr. Otellini said he regretted, led Apple to use rival Arm technology for smartphones and, later, tablets. So did Samsung and other companies that make devices using Google’s Android software. More recently, Apple started using Arm chips in many new Macs.Mr. Otellini and his successors prioritized Intel’s profit margins while failing to take risks to move into new markets and outflank rivals, former company insiders now acknowledge. If boiled down to a book, “it could be called ‘the insufficiently paranoid don’t survive,’” said Reed Hundt, a former Federal Communications Commission chairman who served on Intel’s board from 2001 to 2020, in a nod to Mr. Grove’s “Only the Paranoid Survive.”As questions swirled about Intel’s future, Mr. Gelsinger was viewed as a possible savior. But he insisted he was committed to VMware, a point he seemed to underscore by adding a temporary tattoo with the company’s name on his arm during a 2018 conference in Las Vegas.Then, just before Thanksgiving 2020, an Intel director asked Mr. Gelsinger to join the company’s board. Mr. Gelsinger asked for permission from Michael Dell, the founder of Dell Technologies, which then controlled VMware.“I knew Intel needed some help and Pat was somebody who could help a lot, so I said ‘sure,’” Mr. Dell said.Understand the Global Chip ShortageCard 1 of 7In short supply. More

Homebuilder confidence fell for the second straight month.
Residential construction costs are up 21% year over year.
“These delivery delays are raising construction costs and pricing prospective buyers out of the market,” said the chairman of the National Association of Home Builders.

Supply chain issues for homebuilders appear to be getting worse, and that is weighing on confidence in the industry.
Builder confidence in the single-family, newly built housing market fell 1 point in February to 82 on the National Association of Home Builders/Wells Fargo Housing Market Index. That is the second straight month of declines. Anything above 50 is considered positive. The index stood at 84 in February 2021.

“Production disruptions are so severe that many builders are waiting months to receive cabinets, garage doors, countertops and appliances,” said NAHB Chairman Jerry Konter, a builder from Savannah, Georgia. “These delivery delays are raising construction costs and pricing prospective buyers out of the market.”
Surging lumber prices are also adding thousands of dollars to the cost of new homes.

A worker makes repairs to a home under construction at the Lennar Bridgeway home development on December 15, 2021 in Newark, California.
Justin Sullivan | Getty Images

Homebuyers are already contending with rising interest rates. The average rate on the popular 30-year fixed mortgage just crossed over 4%, well over a full percentage point higher than it was a year ago. Add higher rates to higher home prices, and some buyers are simply unable to afford it. This is why rental demand is currently so high.
“Residential construction costs are up 21% on a year over year basis, and these higher development costs have hit first-time buyers particularly hard,” said Robert Dietz, NAHB’s chief economist. “Higher interest rates in 2022 will further reduce housing affordability even as demand remains solid due to a lack of resale inventory.”
Of the index’s three components, current sales conditions increased 1 point to 90, and sales expectations in the next six months fell 2 points to 80. Buyer traffic fell 4 points to 65.
Regionally, on a three-month moving average, sentiment in the Northeast increased 3 points to 76. In the West it rose 1 point to 89, and in the Midwest it fell 1 point to 73. Sentiment in the South dropped 1 point to 86.

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Officials at the Federal Reserve expressed concern about inflation at their meeting in January, in particular that it had spread beyond pandemic-affected sectors into other areas, and agreed it would be warranted to begin scaling back their support for the economy faster than they previously had anticipated, minutes of the meeting released Wednesday showed.Fed officials noted that the labor market remained strong, though the Omicron wave of the coronavirus had worsened supply chain bottlenecks and labor shortages, and that inflation continued to significantly exceed the levels the central bank targets.Most officials still expect inflation to moderate over the year as pandemic-related supply bottlenecks ease and the Fed removes some of its support for the economy. But some participants warned that inflation could continue to accelerate, pointing to factors like rising wages and rents. If inflation does not move down as they expect, most Fed officials agreed that they might need to pare back their support for the economy even more quickly, though that could carry some risk.The outlook for inflation could be worsened by China’s zero-tolerance policy toward Covid, which has led to expansive lockdowns that have shuttered factories; a clash in Ukraine that could push up global energy prices; or the spread of another variant, they said.The central bank emphasized that the pace of interest rate increases would hinge on how the economy developed. But most officials agreed that the Fed should take a faster approach to cooling the economy than it did in 2015, when it began raising rates at a slow and plodding pace in the wake of the Great Recession.“Most participants suggested that a faster pace of increases in the target range for the federal funds rate than in the post-2015 period would likely be warranted, should the economy evolve generally in line with the committee’s expectation,” the minutes read.Fed officials also agreed that it was appropriate to proceed with plans to trim the nearly $9 trillion in securities that the central bank holds. Most officials preferred to keep to a schedule announced in December, which would end such purchases starting next month, though some viewed an earlier end to the program as warranted and a way to signal that they were taking a stronger stance to fight inflation.Policymakers said the labor market had made “remarkable progress in recovering from the recession associated with the pandemic and, by most measures, was now very strong.”The January meeting solidified what markets had been anticipating: that the Fed was on track to raise interest rates in March. The question now is how quickly, and by how much. Many investors have speculated that the Fed could raise its interest rate by half a percentage point in March, instead of its usual quarter-point increase.In a statement after their two-day policy meeting in January, Fed officials laid the groundwork for higher borrowing costs “soon.” Jerome H. Powell, the Fed chair, said at a news conference after the meeting that “I would say that the committee is of a mind to raise the federal funds rate at the March meeting, assuming that the conditions are appropriate for doing so.”Inflation has continued to run hot since the Fed’s last meeting, and wage growth remains elevated. A key inflation measure released last week showed that prices were climbing at the fastest pace in 40 years and broadening beyond pandemic-affected goods and services, a sign that rapid gains could prove longer lasting and harder to shake off.January’s Consumer Price Index showed prices jumping 7.5 percent over the year and 0.6 percent from the prior month, exceeding forecasts. A separate inflation gauge that the Fed prefers also showed that prices remained elevated at the end of 2021. Overall, prices have been climbing at the fastest pace since 1982.Wall Street is now anticipating that interest rates could rise to more than 1.75 percent by the end of the year, up from near zero now. Markets began to bet on a double-size rate increase after January’s inflation data came in surprisingly strong. But some Fed officials have been tempering those expectations, saying they need to take a steady approach.Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said on Sunday that the Fed needed to get moving but that its approach ought to be “measured.”“I see that it is obvious that we need to pull some of the accommodation out of the economy,” Ms. Daly said on “Face the Nation.” “But history tells us with Fed policy that abrupt and aggressive action can actually have a destabilizing effect on the very growth and price stability we’re trying to achieve.” More

Prices were rising fast, products were in short supply and the Omicron variant put a chill on the country at the start of the year. Through it all, American consumers kept spending.Retail sales rose 3.8 percent in January from the prior month, the Commerce Department reported on Wednesday, a faster-than-expected rebound from a sharp decline in December and another sign of the economy’s resilience, even as stores shortened their hours or closed as a surge in Covid-19 infections led to widespread staffing shortages. Wednesday’s sales data echoed a report that showed hiring was stronger than anticipated last month, with employers adding 467,000 jobs.Other factors were at play, too, most notably fast-rising prices. The retail sales data wasn’t adjusted to account for inflation, and that could continue to boost the sales figures for months to come, economists said. But the overall takeaway was still that consumer spending held up last month.“We are seeing a strong bounce to start the year, suggesting positive momentum for now, in spite of elevated prices,” said Rubeela Farooqi, the chief U.S. economist at High Frequency Economics.Consumer spending accounts for the bulk of economic activity in the United States, and the report arrived at a critical time for the economy, as the Federal Reserve shifts its focus to battling inflation from supporting growth. The central bank is expected to raise interest rates as soon as next month, and rising borrowing costs could dampen spending by consumers and businesses.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.What’s to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.Other factors could also curb spending. An expansion of the child tax credit — through which the government deposited as much as $300 per child into qualifying Americans’ bank accounts each month — ended at the start of the year, and although consumers haven’t been deterred by inflation yet, there have been signs it is beginning to wear them down. One measure of consumer sentiment released this month — the University of Michigan’s Index of Consumer Sentiment — showed the least favorable long-term economic outlook in a decade.“I think it’s a matter of time before there is pushback in terms of consumers stepping back, and that’s something we need to figure into our estimates,” Ms. Farooqi said.Some of January’s jump in sales probably had to do with one-off factors like a restocking of shelves that had emptied out last year, said Beth Ann Bovino, the chief U.S. economist at S&P Global. With more available to buy, spending increased, she said.Another was that people use gift cards in January after receiving them as Christmas presents. Sales of gift cards don’t show up in the data until they have been used, she said.“If they get it on Dec. 25, they probably take it out in January when they’re done with their festivities,” Ms. Bovino said, noting that shoppers may be more forgiving of higher prices when “they are buying with other people’s money.”Plus, spending patterns have become less predictable during the pandemic, complicating efforts to predict what will happen next. Before the pandemic, holiday shopping would push retail sales higher in December, and a slowdown in spending would be reflected in January. This year’s gain followed a drop in December that on Wednesday was revised to 2.5 percent.Still, Ms. Bovino noted that “people were still spending” in January, and the purchasing was broad-based: Sales at car dealers rose 5.7 percent over the previous month, while e-commerce sales rose 14.5 percent. Spending at electronics and appliances stores rose 1.9 percent, and sales at clothing and general merchandise stores, such as department stores, were higher as well.The effect of the latest coronavirus wave was evident in some sectors. Spending at restaurants, bars and gas stations fell about 1 percent as people stayed home. But overall, sales in January rose far faster than the 2 percent gain economists had expected.Inflation F.A.Q.Card 1 of 6What is inflation? More

Moynihan told CNBC’s Jim Cramer on Wednesday that spending on Bank of America cards has jumped up to 20% from last year.
“When you look at the core spending levels of consumers, they continue to be very strong,” Moynihan said. “January’s up nearly 15 to 20% [from a year earlier]; we’re seeing that continue into February.”
While there was concern that consumer bank account balances would plunge after government stimulus programs ended, that hasn’t been the case yet, Moynihan said. Instead, balances have risen for the “last six or seven months,” according to the CEO.

Bank Of America CEO Brian Moynihan is interviewed by Jack Otter during “Barron’s Roundtable” at Fox Business Network Studios on January 09, 2020 in New York City.
John Lamparski | Getty Images

U.S. consumers are spending more money while also growing savings in a positive sign for the economy, according to Bank of America CEO Brian Moynihan.
Moynihan told CNBC’s Jim Cramer on Wednesday that spending on Bank of America cards has jumped by as much as 20% from last year.

“When you look at the core spending levels of consumers, they continue to be very strong,” Moynihan said. “January’s up nearly 15 to 20% [from a year earlier]; we’re seeing that continue into February.”
Bank of America is the second-biggest U.S. bank by assets, after only JPMorgan Chase. Its relationships with U.S. households, small businesses and corporations give Moynihan a unique view into the health of the economy.
While there was concern that consumer bank account balances would plunge after government stimulus programs ended, that hasn’t been the case yet, Moynihan said. Instead, balances have risen for the “last six or seven months,” according to the CEO.
“The second thing is that consumers have more money in their account,” Moynihan said. “So in the month of January their accounts grew again, especially for consumers that carry lower balances.”
Moynihan said that his bank was poised to generate more earnings in a rising rate environment. The Federal Reserve is expected to start hiking its benchmark rate next month.

The wide-ranging interview covered the bank’s technology investments. As of last month, Bank of America had 16 million active Zelle users, and last year Zelle transactions exceeded paper checks for the first time.
This story is developing. Please check back for updates.

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Retail sales increased 3.8% in January, well ahead of the 2.1% estimate and much better than the 2.5% decline in December.
Online shopping and furniture sales boosted the number, while sporting goods and gasoline sales totals declined.
The numbers reflect an active consumer as well as rising inflation.

Consumer spending bounced back sharply in January as rising inflation and a post-holiday surge kept cash registers ringing, the Commerce Department reported Wednesday.
Retail sales for the month rose 3.8%, much better than the 2.1% Dow Jones estimate.

The numbers are not adjusted for inflation; the 0.6% rise in the consumer price index for the month helped push a reversal from the 2.5% sales decline in December, which was revised lower from the initially reported 1.9% drop. CPI was up 7.5% on a year-over-year basis in January.
Excluding auto sales, the retail gain was 3.3%, after falling 2.8% in the previous month.
Online shopping contributed the most on a percentage basis, with nonstore retailers seeing a gain of 14.5%. Furniture and home furnishing sales increased 7.2%, while motor vehicle and parts dealers saw a 5.7% rise.
Food and drinking establishments, considered a barometer for the pandemic-era economy, saw sales dip just 0.9% for the month despite the major escalation in Covid cases fueled by the omicron spread.
“Consumers say they are worried about inflation, but they continue to spend,” PNC’s chief economist, Gus Faucher, wrote. “Even taking into account the December decline, retail sales in recent months have been increasing much faster than prices, so households are purchasing larger volumes of goods and services, not just paying higher prices.”

Sales at sporting goods, music and book stores fell 3% while gasoline station receipts were off 1.3% as a tick down in fuel costs saw prices at the pump move lower.
On a year-over-year basis, retail sales overall rose 13%, pushed higher by a 33.4% surge in gasoline station sales and a 21.9% burst in clothing stores.
The numbers came with the economy facing the worst inflation in 40 years, which helps feed into the retail sales numbers. The Federal Reserve is expected to enact multiple interest rate hikes this year to combat rising prices, with markets looking for the central bank to boost its benchmark short-term borrowing rate by perhaps half a percentage point in March.
In nominal terms, real spending increased at a 3.3% annualized pace from October 2021 through January 2022, according to Capital Economics. However, the firm cautioned that, when adjusted for inflation, real spending actually declined at a 6.8% pace during the period.
A separate report Wednesday showed that industrial production jumped 1.4% in January, much higher than the 0.5% forecast. Capacity utilization increased 1 percentage point to 77.6%, its highest since March 2019.
Also, inventories rose 2.1% in December, in line with expectations. The National Association of Home Builders index for February came in at 82, also in line with estimates but a slight decline from January.

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The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.05% from 3.83%.
The average purchase loan size was a record $453,000.
Applications to refinance a home loan are now less than half the volume of a year ago.

A couple look at houses for sale in the window of William H. Brown estate agents.
Getty Images

Homebuyers are facing one of the priciest housing markets in history, and that means they need larger mortgages than ever before. While mortgage demand is falling, due to rising interest rates, the size of the average purchase loan application just set a record.
Mortgage applications to buy a home fell 1% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 7% lower than the same week one year ago.

“Purchase applications saw a modest decline over the week, with government purchase applications accounting for most of the decrease,” said Joel Kan, an MBA economist. “Prospective buyers still face elevated sales prices in addition to higher mortgage rates. The heavier mix of conventional applications again contributed to another record average loan size at $453,000.”
Home prices have been climbing steadily as demand continues to outstrip the supply of houses for sale. While the increases had moderated at the end of last summer, they are now widening again. Prices nationally were up 18.5% year over year in December, according to the most recent report from CoreLogic.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.05% from 3.83%, with points rising to 0.45 from 0.40 (including the origination fee) for loans with a 20% down payment. The rate was 107 basis points lower the same week one year ago.
“Mortgage rates increased across the board last week following the recent rise in Treasury yields, which have moved higher due to unrelenting inflationary pressures and increased market expectations of more aggressive policy moves by the Federal Reserve,” added Kan.
The sharp rise in mortgage rates over the last several months has cut refinance demand dramatically. Application volume was down 9% for the week and was 54% lower than the same week one year ago. The refinance share of applications decreased to 52.8% of total applications from 56.2% the previous week. That was the lowest level since July 2019.

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In a new report, the administration detailed China’s violations of promises made both to the World Trade Organization and under a 2020 trade deal with the U.S.WASHINGTON — The Biden administration criticized China in a new report released Wednesday morning for failing to uphold a wide range of trade commitments, including promises it had made when it joined the World Trade Organization in 2001 and others in a trade deal signed with the Trump administration in 2020.In its annual assessment of China’s compliance with its obligations to the W.T.O., the Office of the United States Trade Representative excoriated the Chinese government for flouting the global trade body’s rules and its transparent, market-oriented approach. Instead, China expanded its state-led approach to its economy and trade, causing serious harm to workers and businesses around the world, particularly in industries targeted by its industrial plans, Katherine Tai, the U.S. trade representative, said in a statement.“China has not moved to embrace the market-oriented principles on which the W.T.O. and its rules are based, despite the representations that it made when it joined 20 years ago,” Ms. Tai said.Katherine Tai, the United States trade representative, accused China of failing to embrace the market-oriented principles of the World Trade Organization, which it joined in 2001.Fabrice Coffrini/Agence France-Presse — Getty ImagesThe report also criticized the trade deal signed by the Trump administration, in one of the first written assessments the Biden administration has provided of China’s progress toward the terms set out in that deal.The Biden administration has said it intends to hold China to the terms of that agreement, while also calling for a different approach to trade. But it has not clarified just how assertively it would enforce a deal it has described as fundamentally flawed.The report said that the deal had failed to address the most fundamental concerns the United States has with China’s approach to trade, and that the United States had serious concerns with China’s implementation of several of its commitments. Those included pledges to purchase U.S. goods and services, as well as promised reforms related to agriculture, particularly biotechnology, and an assessment China promised to conduct on the use in swine and cattle of ractopamine, a feed additive widely used in the United States that Beijing has banned.The United States has raised concerns about China’s progress during regular meetings between officials at various levels of government, the report said.Data released this month showed that China fell far short of satisfying commitments it had made in the trade deal signed with the Trump administration to purchase an additional $200 billion of goods and services by the end of last year. The Biden administration said its patience with China was wearing thin, but it has not yet clarified what action, if any, it would take in response.The report echoed many of the criticisms of China issued under the prior administration, including spelling out the World Trade Organization’s shortcomings in disciplining China’s trade violations and calling for measures to take on China outside the organization.But the report also appeared to take issue with the Trump administration’s attempt to decouple from China, arguing that the United States needed to invest in American workers and infrastructure to compete with China in an integrated global economy.“We cannot build a wall between the United States and China and assume that it will address the problems posed by China,” the report said.Beyond efforts at the World Trade Organization, the United States was pursuing several strategies to hold China to account, the report said. They included bilateral dialogues with China, including over its progress toward the commitments of the 2020 trade deal; cooperation with allies like Japan and Europe; and efforts to repurpose and expand domestic trade tools, like using tariffs to encourage companies to reduce their carbon emissions.“It is also apparent that existing trade tools need to be strengthened, and new trade tools need to be forged,” the report said. “China pursues unfair policies and practices that were not contemplated when many of the U.S. trade statutes were drafted decades ago, and we are therefore exploring ways in which to update our trade tools to counter them.” More