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CvT: A Deeper Look at the New US Trade Rep, Katherine Tai

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On March 17, the Senate unanimously (98-0) approved the nomination of Katherine Tai to the role of US Trade Representative (USTR), and she was sworn into office the following day. Previously, Tai served as trade counsel for the House Ways and Means Committee, eventually becoming chief counsel for China trade enforcement, and in the Trade Representative’s Office of General Counsel from 2007-14. She is the first Asian-American, and first woman of color, to serve as US Trade Representative.

Tai comes to the position with an impressive track record of successfully working on trade issues and unique bipartisan support; these have fostered optimism about her ability to repair trade relations and take on the China challenge. Many are looking to her to determine what the tone of US-China relations will be over the coming years, and experts expect her to maintain a tough stance on China. She has long been critical of Beijing’s trade practices, and has successfully brought cases against China at the World Trade Organization on reducing Chinese export quotas on raw materials and rare-earth minerals. However, her exact stance and the specifics of her approach have yet to be revealed, though in testimony before the Senate Finance Committee in February she committed herself to working for a more equitable trade policy that would enforce American trade rules against trading partners.

Tai’s ability to work across the aisle will also help her navigate a deeply divided and political US atmosphere. Her consistently tough stance on China and record of standing up for American workers have earned her the support of Republicans and labor unions. She has received no shortage of praise from Republicans and Democrats alike, admiring her intelligence, fair-mindedness, sociability, and ability to bring separate groups together and build alliances.

Her inherited trade setting

Tai’s impressive qualifications will be necessary as she enters office during one of the toughest trade environments for the US. After four years of US isolationism and tariffs placed on adversaries and allies alike, the Biden administration faces the daunting tasks of repairing damaged trade relationships and developing a strong multilateral strategy to deal with Chinese trade practices. Many US allies are not heeding US pressure and are making their own decisions on China. For example, the EU negotiated an investment pact with China in late 2020 against the wishes of the then-incoming Biden administration, and some European countries have largely ignored US efforts to get other countries to block Huawei over national security concerns.

Furthermore, the recent deterioration of US-China relations over security and technology concerns and US criticism of Chinese human rights violations and subsequent levying of sanctions has intensified an already strained trade environment. In addition, trade agreements such as the US-Mexico-Canada Agreement, which Tai helped negotiate, and the phase one US-China trade deal the Trump administration signed are struggling. The latter agreement was meant to ease the US-China trade war, and committed China to buying at least US$200 billion more in US goods and services over two years compared to 2017 levels. However, the Peterson Institute for International Economics has found that China’s purchases so far fall short of the agreed-upon amount.

What does Tai’s confirmation mean for US-China relations?

Tai has advocated for cooperation over competition when it comes to the US-China trade relationship. She has also stressed the importance of strengthening relationships with US allies and that China needs to follow through on the commitments it made in the US-China trade deal. Given this, it seems that Tai will focus on creating a solid multilateral approach to trade relations with China intended to see Beijing adhere to the practices and standards of the US-led system.

While she is expected to continue the Trump administration’s hardline stance on China, including the use of tariffs as a punitive tool, Tai will also likely bring more order and process to US-China trade relations. The chaos caused by the Trump administration’s penchant for forming trade policy through tweets is a thing of the past. Perhaps Tai’s powers of negotiation, combined with consistency among US policy stances, will soothe the tensions that have characterized the bilateral trade relationship for at least the past four years.

It will be interesting to see what the opportunities for cooperation are as the US continues to push a hardline agenda against Chinese trade practices. In late March, the US government singled out China as the “world’s leading offender” in creating overcapacity in numerous sectors, including steel, aluminum, and solar. The USTR office’s annual report claimed that Chinese practices present barriers that impede future US growth and the “fairness of the global economy.” While the Biden administration and Katherine Tai’s confirmation may signal a new chapter in the US-China trade relationship, there is clearly a lot of work to be done and many challenges to overcome.

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