Despite challenging economic year, U.S. Trade Ambassador sees “a lot of accomplishments”
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When it comes to managing trade deals and relationships, the Biden administration has been tireless in the last several months. From defusing tension with the E.U. over “Buy American” policies and Mexico over the corn trade, to commerce talks with Taiwan and African nations, to launching the Indo-Pacific Economic Framework, U.S. Trade Representative Katherine Tai has had her work cut out for her.
Ambassador Tai joined Marketplace’s Kai Ryssdal for a conversation on where American trade interests and priorities lie in the Biden administration. An edited transcript of their conversation is below.
Kai Ryssdal: So just because so much of the economic news of late has been inflation and Jay Powell and the Fed and consumers and all of that, do me a favor and give us your sense of America’s place in the global trade environment two years now into the Biden administration.
Katherine Tai: Well, we have been incredibly busy for these first few years. Just this year, for instance, we’ve launched the Indo-Pacific Economic Framework. We are also in the midst of negotiating a global sustainable steel and aluminum arrangement with the European Union. Then we have been very busy — to toot our own horn — in partnership with Mexico at very successfully enforcing the labor provisions of the US-Mexico-Canada agreement. So when we look around ourselves in the global economy, we are tremendously gratified. It is a challenging time in the global economy, but we see a lot of accomplishments.
Ryssdal: So if those are the goods, there are some challenges, and I want to run you through those and then we’ll circle back to some of the other points that you brought up. I want to talk first of all about the Europeans — our oldest trading partners, certainly among the most significant. They are extremely irate with us now about some of the provisions of the Inflation Reduction Act relating to electric vehicle subsidies and some other issues. And I wonder how you massage a relationship that is so important, and yet somehow has become kind of fraught right now?
Tai: Well, what doesn’t get reported, but which our European partners have been clear about in all of the conversations that we’ve had with them about their concerns on the Inflation Reduction Act, is how pleased they are that we have passed this legislation. This is the largest investment that the United States has made in our history towards a clean energy future and transition. From there, we obviously are hearing the concerns that they are sharing with us and taking them very seriously. And we are engaged in deepening dialogue with them about how we address their concerns, on the basis of a set of shared values and commitments that we have building toward a clean climate future.
Ryssdal: Were you surprised that the Europeans got so upset, were so vehement, actually, in their objections to some of the EV subsidies in the Inflation Reduction Act provisions?
Tai: Well, I hope what I’m about to say to you sounds credible, because I mean it. In a way, I think it is the privilege of the close relationship that we have, and the strong foundation for our partnership that they have been so direct with us. And I think that this is one of the key elements to the confidence I have that we will be able to navigate through threshing out our concerns in order to figure out how we resolve them.
Ryssdal: Yeah. But with all due respect, you didn’t answer the question: Were you surprised that they got so irritated?
Tai: No. I mean, I hope that you don’t think I was avoiding. I’m not surprised. And in fact, I think it is a privilege of the relationship that they can be so free in expressing their concerns.
Ryssdal: I want to ask you about the World Trade Organization because they came out a couple of weeks ago, I guess, now and said that the Trump-era steel and aluminum tariffs were fundamentally illegal and that they were not in accordance with World Trade Organization rules. And you came out and you were quite vehement in your opposition to the WTO’s statement. You said that they were on very, very thin ice. And I wonder how you make sense of that, given that the United States — under especially President Biden now — is all about multilateral institutions and the common good.
Tai: There’s a development that I am reacting to, which is the WTO. And the people who sit on the panels making these types of decisions, digging into the national security decisions of member governments of the WTO.
Ryssdal: Sorry, just to be clear — that was the premise of the Trump era tariffs, that they were national security in nature. And that’s how he justified them. I’m sorry, go on.
Tai: That’s right. And I think that if you’re gonna boil it down, if you’re looking at a future where the United States no longer produces steel or aluminum anymore, the question I would pose to anybody on the street is, would you feel safe? So there are the specific contours of that case. But the ruling itself gets at second-guessing the decisions by governments around their own national security, and that’s where I think that we’ve got to be very, very careful institutionally at the WTO around who gets to make those types of decisions for a particular country.
Ryssdal: Does it ever strike you ironic that you and the Biden administration are either continuing or defending decisions made in the Trump administration? For example, the tariffs on China and also now this WTO.
Tai: Well, the job I have is United States Trade Representative. Our job, and the job of every predecessor of mine that has been in this office, has been to represent the interests of the United States with respect to our engagement with the rest of the world. So this is not a partisan position. This is about the totality of the United States economy. That’s how I think about it.
Ryssdal: This is gonna sound like a facetious question, but it’s really not. And here’s the root of it: We’ve got a soybean farmer in Iowa, we’ve got an apple farmer in Washington State, there’s a woman who runs a steel company in Pennsylvania. I mean, I’ve talked to a zillion small business people and they all talk about the international aspect of their jobs and how critical it is. And that obviously feeds right into what it is that you do for a living. I do wonder though, whether when you go out and you speak with people who maybe are not in international trade or don’t understand the U.S. role in international trade, how do you explain what you do?
Tai: That is a great question. I break it down again, to the title of my job. It is my job to represent their interests around the world. And that’s why I’ve spent so much time on the road. And I now wonder if we’re speaking to the same people when we hit the road. But no, I hear those themes as well. And what I want them to know is the rest of the world cares. They care about where the United States is, they care about whether or not we feel confident about the rules in the global economy. Our trade policy and international trade policy has got to create opportunities, and it’s got to champion the interests of our ordinary people. That’s what gives me hope and confidence that we are all working together in a time of challenging economic dynamics toward something that is going to be resilient, durable and inclusive.
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