US Trade Representative Catherine Tye defended the harsh tariff hikes against countries such as China, arguing that combined with investment, it was a “legitimate and constructive” tool to revive domestic industries.
Tai’s comments to AFP come a week after steep tariff increases on Chinese electric vehicles, EV batteries and solar cells came into force — with down-the-line levies on other products also recently finalized.
The latest moves to target $18 billion in Chinese goods come weeks before the U.S. presidential election in November, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies.
In an interview Thursday looking back on her tenure, Tai defended the use of tariffs as a tool “to offset unfair trade” with China.
The latest increases, he added, are aimed at helping US clean energy investments “take root.”
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“We wanted to make sure that these increased areas dovetail with the investments we’re making,” Tai said, referring to efforts to build domestic industries such as those for electric vehicles, batteries and semiconductors.
“Once you’ve lost a branch, bringing it back from the brink is much, much harder,” he said.
Time needed
The U.S. manufacturing industry has been in decline in recent decades, a period that has seen production shift offshore and intensified competition from China.
China’s share of global manufacturing output was about 30 percent, significantly higher than the United States and other developed countries.
Tai acknowledged that while the United States has seen new investment in manufacturing, “to get production back across the board, it’s going to take more time.”
He stressed, however, that Washington is not aiming to bring all production back to its shores, but to recover from previous “levels of erosion”.
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President Joe Biden has largely maintained the tariffs imposed by former President Donald Trump, which affected about $300 billion in goods from China. This year’s increases affect pre-existing and added products.
An estimate by the Tax Foundation think tank in June noted that the cumulative impact of tariffs would “reduce long-run GDP by 0.2 percent.”
Further increases proposed by Trump as the Republican seeks another term in the White House could “shrink GDP by at least 0.8 percent,” the foundation added.
“Very optimistic”
Tai, who has been in office for more than three years, also hopes Washington will strike new deals with European partners — citing ongoing talks on critical minerals.
A key factor in the negotiations for a crucial minerals deal was labor standards and how they would be enforced.
“I remain very, very optimistic that we will be able to achieve these kinds of new deals that put workers at the heart of them,” she said.
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A positive note was heard on steel and aluminum talks as well.
Biden has halted Trump-era tariffs on most European steel and aluminum in favor of quotas that allow some imports duty-free, but both sides face a complex task in resolving an impasse.
That’s because they’re also pushing to divest from carbon-intensive industries and fight untradeable practices by parties like China.
“We’re not just trying to get more trade. We’re trying to get better trade,” Tai said.
He pointed to the US-Mexico-Canada Agreement, which allows for enforcement actions against factories for labor violations, as an example of “labor-centric trade.”
He added that Washington wants to “expand the conversation beyond North America” ββto Europe.
But the trade chief’s tenure has faced challenges, including an impasse with the trade pillar of the Indo-Pacific Economic Framework for Prosperity — a pact that includes Asia-Pacific partners — amid labor concerns.
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Tai dismissed the view that labor provisions alone have caused “insurmountable challenges”, saying countries were still making progress this year.
He added that Washington remains present in the region: “We are there, we have been, we are committed.”
Source: AFP