President-elect Joe Biden has tapped a China expert to be his U.S. Trade Representative, reflecting the most pressing trade issue his administration will face on day one — the ongoing trade war with the Asian economic powerhouse.
Katherine Tai, the top trade lawyer for the House Ways and Means Committee and the former chief counsel on China trade enforcement at the Office of USTR during the Obama administration, will be faced with the delicate détente between the two countries that are still levying tariffs on hundreds of billions of dollars’ worth of products going both ways.
China, following the “phase one” deal struck this year, is exempting many of its importers from steep tariffs on some U.S. ag commodities, but many tariffs remain, dampening trade. Meanwhile, the U.S. continues to levy 25% tariffs on $234 billion worth of Chinese products.
“As the United States seeks to repair strained relationships with our partners around the world and address increasingly perilous challenges from China, Katherine will be an honorable and effective representative for this nation, our people, and our interests,” House Ways and Means Committee Chairman Richard Neal — Tai’s current boss — said Thursday, Dec. 10.
Biden has said he won’t immediately remove those tariffs, essentially leaving “phase one” intact, but he’s also promised to rally traditional U.S. allies to take on China in an effort to curb the country’s intellectual property.
“The best China strategy, I think, is one which gets every one of our — or at least what used to be our — allies on the same page,” Biden said in a recent interview with The New York Times. “It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies.”
But the U.S. is at odds with some of its biggest allies in the European Union due to trade spats over steel and aluminum trade and airplane subsidies. U.S. efforts to forge a free-trade agreement with the EU are bogged down over contentious issues such as differences over agricultural trade policies.
Tai and the Biden administration will also be confronting escalating problems with the renegotiated North American Free Trade Agreement. The USTR on Wednesday, Dec. 9, took the first step in challenging Canada’s implementation of new tariff rate quotas under the pact — an effort that could lead to the formation of an official dispute panel.
But Democratic lawmakers are calling for even more actions to fix fissures developing in the renamed U.S.-Mexico-Canada Agreement, especially an effort to force Mexico to comply with its pledges to reform labor protection laws.
Neal applauded the action on Canada, but stressed he wants “USTR enforcement actions that will effectively support Mexico’s labor reform and address long-standing and persistent labor violations in Mexico. Without robust enforcement, the corrupt practices by state or local authorities, as well as employers and their protection unions, in Mexico will continue to undermine workplace democracy and the USMCA more broadly.”
Tai played a key role when House Democrats negotiated with current USTR Robert Lighthizer for changes to USMCA, Neal said.
One U.S. farm group pressing hard for USTR to confront Canada over the TRQs it agreed to in the U.S.-Mexico-Canada Agreement is the International Dairy Foods Association, and it has already announced its support for Tai.
“On day one of President-Elect Biden’s Administration, the U.S. trade situation will be complex at best,” said IDFA President and CEO Michael Dykes. “The future success and viability of the U.S. dairy industry relies on the health of global market opportunities, and therefore IDFA offers its partnership to Ms. Tai and the staff at USTR to position U.S. dairy for success.”
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