The United States Trade Representative Katherine Tai told lawmakers on Tuesday that the Biden administration is “seriously studying” America’s trade defense tools, including reviewing the tariffs imposed on Chinese imports during the Trump era, in response to the threats posed by China’s economic and trade policies.
Tai testified to the Ways and Means Committee of the U.S. House of Representatives on President Biden’s 2024 trade policy agenda and released her testimony prior to the hearing.
She emphasized the importance of addressing the “unfair practices of China and other economic entities,” noting that China’s economic and trade policies have caused “reliance and vulnerability in multiple industries in the U.S., harming American workers and businesses, and posing real risks to our supply chains.”
Tai stated, “In areas such as steel, aluminum, solar panels, batteries, electric vehicles, and critical minerals, China’s unfair policies and practices have devastated many of our labor communities and industries.”
She stressed, “Fundamentally, this (referring to economic and trade issues) is about giving everyone a fair chance. However, it is impossible to achieve if countries like China continue to dominate industries with non-market policies and practices, enabling China to coerce other economic entities.”
Regarding the U.S. response strategy, Tai mentioned the need to review existing scrutiny tools, including how the U.S. levied tariffs on China for four years under the “Section 301” provisions to address this issue.
Former President Donald Trump utilized the Section 301 provision of the 1974 Trade Act in 2018 to impose tariffs on billions of dollars worth of Chinese imports. The Biden administration is nearing completion of this lengthy review and will decide whether to extend these tariffs.
A week earlier, U.S. Treasury Secretary Janet Yellen warned Chinese leaders that China’s excessive investments in electric vehicles, solar panels, and other clean energy products were causing a wave of exports that threatens and harms manufacturers and workers in the U.S. and other regions, which is unacceptable.
Yellen is set to engage in new dialogue with Chinese officials on the issue of “balanced growth” at the Treasury Department. However, Chinese trade experts suggest that her message to the Chinese government regarding overcapacity may be the first step towards a new Section 301 unfair trade practices investigation, which could result in new tariffs on electric vehicles, solar panels, and other imported products.
Tai informed lawmakers that she is rigorously reviewing an application filed by five American labor unions to initiate a new Section 301 investigation into China’s suspected unfair practices, policies, and behaviors in the maritime logistics and shipbuilding sectors.
In efforts to strengthen the supply chain, one of the Biden administration’s main policies is reducing reliance on Chinese products to achieve source diversification, aiming to avoid bottlenecks similar to those encountered at the end of the COVID-19 pandemic.
She stated, “Reducing reliance and vulnerability, as well as strengthening the supply chain, are key priorities for the Office of the U.S. Trade Representative this year and form the basis of our work as part of the Council on Supply Chain Resilience led by the President.”
Tai also mentioned, “While our economic relationship with China is complex, as the President has said, we aim to compete with China, not conflict with them.”
She emphasized the need for enhanced cooperation with allies and partners.
Tai stated, “As the President stated in the State of the Union address, this administration will continue to oppose China’s unfair non-market policies and practices. We are working in tandem with like-minded partners and allies, as seen in the joint statement issued with Australia, Canada, Japan, New Zealand, and the UK in June last year.”
Furthermore, Tai highlighted, “Competition must be fair, and the U.S. Trade Representative’s office and the Biden-Harris administration are working every day to prioritize working families, rebuild American manufacturing, and strengthen our supply chains.”
She mentioned that the Trade Representative’s office will place American workers at the core of U.S. trade policy, seeking to establish higher labor standards in negotiations with other countries, including prioritizing robust protection of labor rights in discussions with Kenya and Taiwan.