Biden USTR nominee Tai vows to end trade 'race to the bottom,' counter China

By David Lawder and Andrea Shalal
WASHINGTON (Reuters) - President Joe Biden's top trade candidate, Katherine Tai, endorsed tariffs as a "legitimate tool" to counter China's state economic model and pledged to uphold Beijing's earlier commitments while taking a comprehensive new approach to the US - Promise trade.
At her Senate confirmation hearing to become a US trade agent, Tai also called for a revision of global trade rules to remove the "gray areas" used by China as "gray areas" and end a "race to the bottom" of which it is said he had hurt the workers and the US surrounding area.
"Our trade policy has long been based on the assumption that the more we traded with one another and liberalized our trade, the more peace and prosperity there was," said Tai, adding that trade liberalization has often led to less and lower prosperity Labor and environmental standards.
Tai's statement to the Senate Finance Committee is the latest sign that Washington's approach to overseas trade has benefited multinational corporations after decades of market-based "free trade" liberalization, but has been turned on its head by the protectionism of former President Donald Trump. may have changed permanently.
Tai did not oppose Trump's "America First" trade policy, but said it would transform it into a "worker-centered" trade model aimed at securing American livelihoods through investment and trade enforcement.
The Yale and Harvard Law School-educated daughter of US immigrants from Taiwan, Tai, described China as "an extremely formidable competitor where the state can run the economy almost like a conductor with an orchestra."
The United States must respond with more strategic investments, supply chain resilience and trade enforcement to counter Beijing's strategy and ambitions, Tai said.
Tai said China had to meet its commitments under the Phase 1 trade agreement it signed with the United States in early 2020, but provided few details on how this could be achieved other than using existing enforcement tools.
She made no new customs threats.
"There are also many areas that are gray areas where the rules are not clear or where we don't have rules yet," said Tai, adding that the United States should work with other countries on new ones Options to seek structural changes in China.
When asked about tariffs on steel and aluminum, Tai said tariffs are "a legitimate tool in the trade toolbox" but that "a whole range of policy tools" are needed to address the core issue of global metals overproduction capacity, which mainly focuses on the subject focuses on China.
Jamieson Greer, a trade attorney who served as chief of staff for Tai's USTR predecessor Robert Lighthizer, said he interpreted Tai's views on tariffs as a continuation of the Trump administration's stance.
"Today's testimony shows that the Biden administration does not see tariffs as a moral issue. You have to be careful, but they are a tool that can be used," Greer said.
For months, Tai's testimony has been eagerly awaited by industry, US trading partners from Beijing to Brussels, working groups and legislators - all of whom stand in line with the head of trade for the world's largest economy.
If this is confirmed, Tai, as widely expected, will face a long list of Trump-era collective bargaining disputes that need to be resolved, including airplanes, food and wine with Europe, over tariffs on taxes on digital services and China's arrears US - Threatening purchases of goods.
STRENGTHENING US SUPPLY CHAINS
Tai told the senators that in addition to Section 301 of the Trade Act, which the Trump administration is using to wage a tariff war on China, legal instruments are needed to better protect American intellectual property.
An important priority is assessing the use of forced labor in China in Xinjiang Province. Tai added, "The use of forced labor is probably the grossest example of the race to the bottom" in world trade. Beijing denies doing any forced labor.
Achieving Biden's trade goals would require stronger, more resilient U.S. supply chains and investments in people and infrastructure to increase American competitiveness, she said.
Tai also opposed a direct return to a free trade agreement with 11 countries in the Asia-Pacific region, which originally included the United States, saying the world has changed significantly since the Obama administration agreed in 2015. The US Congress never ratified the agreement.
However, she said the United States would cooperate in trade with other Asian countries and work to make the World Trade Organization more effective. Tai also said she would prioritize enforcement of the U.S.-Mexico-Canada trade deal, which she renegotiated in 2019 as trade advisor to the House of Representatives Ways and Means Committee to incorporate stricter labor and environmental standards.
She said the deal was "an important step in reforming our approach to trade" and that its success is vital.
(Reporting by David Lawder and Andrea Shalal; Additional reporting by Michael Martina; Editing by Cynthia Osterman, Heather Timmons, Paul Simao and Daniel Wallis)
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