WASHINGTON: US Trade Representative Katherine Tai defended stiff tariff hikes against countries like China, arguing that paired with investment, they were a âlegitimate and constructiveâ tool for re-invigorating domestic industries.
Taiâs comments to AFP come a week after sharp tariff increases on Chinese electric vehicles, EV batteries and solar cells took effect â with levies down the line on other products also recently finalized. The latest moves targeting $18 billion in Chinese goods come weeks before Novemberâs US presidential election, with both Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies.
In an interview Thursday looking back on her term, Tai defended the use of tariffs as a means âto counterbalance unfair tradeâ with China. The latest hikes, she added, aim to help US clean energy investments âtake root.â âWe wanted to make sure that those increased areas are paired with the investments that weâre making,â Tai said, referring to efforts to build domestic industries like those for EVs, batteries and semiconductors. âOnce youâve lost an industry, bringing it back from the brink is much, much harder,â she said. â AFP
The US manufacturing industry has declined in recent decades, a period that saw production shift offshore and heightened competition from China. Chinaâs share of global manufacturing output has been around 30 percent, significantly above the United States and other developed countries.
Tai acknowledged that while the United States has seen new manufacturing investment, âin order to bring manufacturing back across the board, it is going to take more time.â
She stressed however that Washington is not aiming to bring all production back on its shores, but to recover from earlier âlevels of erosion.â President Joe Biden has largely maintained tariffs imposed by former president Donald Trump, which impacted some $300 billion in goods from China. The hikes this year affect earlier products and added ones.
An estimate by think tank the Tax Foundation in June noted the cumulative impact of tariffs would âreduce long-run GDP by 0.2 percent.â Further increases proposed by Trump as the Republican seeks another White House term could âshrink GDP by at least 0.8 percent,â the foundation added.
Tai, who has held office for over three years, is also hopeful that Washington will reach new deals with European partnersâreferring to ongoing talks on critical minerals. A key factor in negotiations on a critical minerals deal has been labor standards and how these would be upheld.
âI remain very, very optimistic that we will be able to achieve these kinds of new agreements that put workers at their center,â she said. She sounded a positive note on talks on steel and aluminum as well.
Biden has paused Trump-era tariffs on most European steel and aluminum in favor of quotas allowing some imports without levies, but both sides face a complicated task in resolving an impasse.
This is because they are also pushing for the decarbonization of industries and to combat non-market practices from parties like China. âWeâre not just trying to accomplish more trade. Weâre trying to accomplish better trade,â Tai said. She pointed to the US-Mexico-Canada Agreement, which allows enforcement actions against factories over labor violations, as an example of âworker-centered trade.â
She added Washington wants to âexpand the conversation beyond North Americaâ and to Europe.
But the trade chiefâs term has seen challenges including a snag with the trade pillar of the Indo-Pacific Economic Framework for Prosperityâa pact involving Asia-Pacific partnersâamid labor concerns.
Tai pushed back on the view that labor provisions alone have caused âinsurmountable challenges,â saying countries are still making progress this year. She added that Washington remains present in the region: âWe are there, we have been, we are engaging.ââAFP