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'She understands enforcement': Biden's trade pick faces Senate confirmation hearing

Jessica Smith
·Chief Political Correspondent
·7 min read
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Katherine Tai, President Biden's pick to be the next U.S. Trade Representative, is set to face questions from senators and share her priorities for trade policy during her confirmation hearing before the Senate Finance Committee on Feb. 25.

In her written remarks, Tai tells the committee her first goal will be tackling the pandemic and economic crisis.

"In the longer term, we must pursue trade policies that advance the interests of all Americans — policies that recognize that people are workers and wage earners, not just consumers; policies that promote broad, equitable growth here at home; policies that support American innovation and enhance our competitive edge," she said in her prepared testimony.

Tai, who was most recently the chief trade counsel on the House Ways and Means Committee, is largely credited with securing changes to the U.S.-Mexico-Canada Agreement (USMCA) and convincing lawmakers on both sides of the aisle to support it.

While it's a significant jump to go from senior congressional staffer to U.S. Trade Representative, Tai's supporters argue she's ready.

"I think right now in trade policy, that's exactly what is needed," said Wendy Cutler, a vice president at the Asia Society Policy Institute and a former U.S. trade negotiator who has worked with Tai. "Someone who can bring together different factions, because so many people have different views on trade and trade policy."

"She was certainly the conscience of what we were able to do in the end [on USMCA]," said House Ways and Means Committee Chairman Richard Neal (D., Mass.) in an interview with Yahoo Finance. "I don't think there was anything that was volunteered from the USTR that we didn't go back and seek to confirm with Katherine."

A woman wearing a face mask to help curb the spread of the coronavirus holds her smartphone as she passes an Apple store promoting its iPhone 12 devices powered with 5G at the capital city's popular shopping mall in Beijing on Wednesday, Feb. 24, 2021. China’s commerce minister appealed to Washington for “join efforts” revive trade but gave no indication Wednesday when tariff war talks might resume or whether Beijing might offer concessions. (AP Photo/Andy Wong)
A woman passes an Apple store promoting its iPhone 12 devices at a popular shopping mall in Beijing on Feb. 24, 2021. China’s commerce minister appealed to Washington for “join efforts” revive trade but gave no indication Wednesday when tariff war talks might resume or whether Beijing might offer concessions. (AP Photo/Andy Wong)

Sen. Sherrod Brown (D., Ohio) — who never voted in favor of a trade deal before the USMCA —has said Tai was "critical" in securing improvements for workers that allowed him to support the deal.

Supporters expect Tai to be confirmed with a bipartisan vote. She's earned the support of both the U.S. Chamber of Commerce and the AFL-CIO.

Tai previously served in the Office of the USTR where she was in charge of litigating cases against China at the World Trade Organization. She's a graduate of Yale University and Harvard Law School, has spent time teaching in China and is fluent in Mandarin. She would be the first Asian-American and first woman of color to serve in the role.

Managing U.S.-China trade tensions

If confirmed, Tai will be stepping into the role of trade chief after a tumultuous few years of trade policy under President Donald Trump. Tensions between the U.S. and China are high, and Tai will play an important role in managing relations between the world's two largest economies.

"I know firsthand how critically important it is that we have a strategic and coherent plan for holding China accountable to its promises and effectively competing with its model of state-directed economics," said Tai in her written remarks.

"I think Katherine's really up to that," said Neal. "She understands enforcement. She understands how to put out offerings and she understands the negotiating posture that the Chinese government undertakes. She's dealt with those issues for a long period of time."

Clete Willems, a former negotiator involved in China trade talks during the Trump administration, told Yahoo Finance in a previous interview that Tai would be a "fantastic" choice.

"China is simultaneously a rival, a trade partner, and an outsized player whose cooperation we’ll also need to address certain global challenges. We must remember how to walk, chew gum and play chess at the same time," said Tai. "That means here at home, we must prioritize resilience and make the investments in our people and our infrastructure to harness our potential, boost our competitiveness, and build a more inclusive prosperity. We must also impart the values and rules that guide global commerce — and we must enforce those terms vigorously."

WILMINGTON, DELAWARE - DECEMBER 11: Katherine Tai delivers remarks after being introduced as U.S. President-elect Joe Biden’s nominee to be the next U.S. Trade Representative at the Queen Theater on December 11, 2020 in Wilmington, Delaware. President-elect Joe Biden is continuing to round out his domestic team with the announcement of his choices for cabinet secretaries of Veterans Affairs and Agriculture, and the heads of his domestic policy council and the U.S. Trade Representative. (Photo by Chip Somodevilla/Getty Images)
Katherine Tai delivers remarks after being introduced as U.S. President-elect Joe Biden’s nominee to be the next U.S. Trade Representative at the Queen Theater on December 11, 2020 in Wilmington, Delaware. (Photo by Chip Somodevilla/Getty Images)

Senators are likely to question Tai about her stance on the tariffs on hundreds of billions of dollars in Chinese goods that President Trump put in place ahead of the Phase 1 trade deal. The Biden administration has said it's reviewing the deal and the remaining tariffs, though Biden is not expected to immediately remove them.

"I think the Biden administration is going to have to show what they got in return for lifting any tariffs," said Cutler.

Biden has vowed to stand up to the Chinese government for its unfair trade practices, but he plans to take a more measured approach that will involve working with U.S. allies.

"I just hope that we don't take the position that we're only going to talk about the challenge that China presents without acting upon it," said Neal. "I think one of the best ways to act upon it is to expand American trade...across the globe."

Following through on the USMCA

Senate Finance Committee Chairman Ron Wyden (D., Ore.) says he wants to hear how Tai will use the "entire trade toolbox" instead of relying exclusively on tariffs.

"We're all prepared to be tough on China cheating. That is not an issue. China trying has ripped us off," said Wyden in a call with reporters. "But we also want to use all the tools in the trade toolbox, the smartest trade tools that are available to make sure that we're protecting our workers and creating more high skill, high wage jobs."

Another major challenge for Tai will be enforcing the new trade deal between the U.S., Mexico and Canada.

"A number of implementation problems are percolating," said Cutler. "Because there was such a strong consensus for the agreement she'll need to show that this agreement is working for all Americans and that means making sure Canada and Mexico are fully following through on their commitments."

Tai noted the importance of enforcing the deal in her opening remarks.

"Too often in the past, Congress and the administration came together to finalize and pass a trade agreement. But then other urgent matters arose and we all moved on," said Tai. "The United States-Mexico-Canada Agreement (USMCA) is a uniquely bipartisan accomplishment that must break that trend. It represents an important step in reforming our approach to trade. We must all continue to prioritize its implementation and success. We must continue to pursue trade policies that are ambitious in achieving robust, bipartisan support."

WARREN, MI - JANUARY 30: Employees record with their phones as President Donald Trump speaks during a visit to Dana Incorporated, an auto-manufacturing supplier, on January 30, 2020 in Warren, Michigan. During his speech Trump touted good job numbers and the strong performance of car companies in the state. (Photo by Brittany Greeson/Getty Images)
Employees record with their phones as President Donald Trump speaks during a visit to Dana Incorporated, an auto-manufacturing supplier, on January 30, 2020 in Warren, Michigan. During his speech Trump touted good job numbers and the strong performance of car companies in the state. (Photo by Brittany Greeson/Getty Images)

There are also lingering trade issues with and potential opportunities for new agreements with the European Union, the United Kingdom and Kenya.

"I always think that one of the difficulties for any USTR is that you deal with a combination of fact and emotion," said Neal. "One of the challenges that we always have is that the agreements are never quite as good as the most virulent advocates advertise and they're not as bad as the severest critics suggest. That's largely because they're implemented over a continuing period of time."

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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