United States: USTR Tai Previews Biden Administration Trade Policy In Congressional Hearings

On March 30 and 31, US Trade Representative ("USTR") Katherine Tai appeared before the House Ways and Means Committee and the Senate Finance Committee, respectively, to present the Biden administration's trade policy agenda for the coming year.¹ Substantively, the hearings were quite similar, and the administration's vision for the Asia-Pacific region, particularly China, featured prominently in both hearings.

In her prepared testimony before both bodies, Ambassador Tai stated that the administration was pursuing a "worker-centric" trade policy. She said that the current trade relationship between the US and China was "unfair" due to state subsidies and policies incompatible with US labor and environmental standards. She stated that the US is willing to engage with China, as witnessed by talks late last year on the Phase One Agreement between the countries, but she noted that it was time to "turn the page" on the old China policy and move to "vigorously defending our values and economic interests from the negative impacts of the PRC's unfair economic policies and practices." These actions included strategic domestic investment in the US economy to reduce dependence on China.²

During the question and answer period of both hearings, Ambassador Tai was asked about specific pieces of legislation that would help the US move past previous China policy. She highlighted domestic spending packages, like the semiconductor funding programs included in the America COMPETES Act and the US Innovation and Competition Act, alongside reforms to trade remedies procedures in Leveling the Playing Field 2.0 Act. Congresswoman Terri Sewell (D-AL) and Senator Rob Portman (R-OH) highlighted Leveling the Playing Field 2.0 Act in their questions. Ambassador Tai stressed that no one policy would completely solve the problem, saying that both domestic investment and trade remedy reform would be necessary in her approach.

Republicans, including Congressman Adrian Smith (R-NE) and Senate Finance Committee Ranking Member Mike Crapo (R-ID), were largely concerned that the USTR's office was not doing enough in the first year of the Biden administration. Ranking Member Crapo was particularly skeptical of the administration's proposed Indo-Pacific Economic Framework ("IPEF"), since it did not allow market access provisions. He noted that IPEF is the administration's major proposal to counter Chinese outreach in the region, and the proposal, as it currently stands, appears limited in scope. Ambassador Tai responded to these questions by saying that, while tariff reduction was not on the table for IPEF, she would work diligently to ensure that US goods had greater opportunity in the Indo-Pacific region.

Since the USTR's office released its Section 301 exclusions shortly before the hearings, several Members, including Congresswoman Jackie Walorski (R-IN) and Senator Tom Carper (D-DE), were interested to know if the USTR's office would consider further exclusions, and if the USTR's office was considering making the currently-granted exclusions retroactive beyond October 12, 2021.³ On the issue of future exclusions, Ambassador Tai said that she was open to more rounds of 301 exclusions if circumstances warranted it. However, she was less committal on retroactivity, promising to work with the various Senators and Representatives that asked about them to see what she could do on the issue.

Footnotes 

1 Biden Administration's 2022 Trade Policy Agenda, WAYS & MEANS CMTE. (March 30, 2022), <https://waysandmeans.house.gov/legislation/hearings/biden-administration-s-2022-trade-policy-agenda>; The President's 2022 Trade Policy Agenda, U.S. SENATE CMTE. ON FINANCE (March 31, 2022), <https://www.finance.senate.gov/hearings/the-presidents-2022-trade-policy-agenda>.

2 Testimony of Ambassador Katherine Tai Before the House Ways & Means Committee Hearing on the President's 2022 Trade Policy Agenda, OFF. OF U.S. TRADE REPRESENTATIVE (March 30, 2022), <https://ustr.gov/about-us/policy-offices/press-office/speeches-and-remarks/2022/march/testimony-ambassador-katherine-tai-house-ways-means-committee-hearing-presidents-2022-trade-policy>; Testimony of Ambassador Katherine Tai Before the Senate Finance Committee on the President's 2022 Trade Policy Agenda, OFF. U.S. TRADE REPRESENTATIVE (March 31, 2022), <https://ustr.gov/about-us/policy-offices/press-office/speeches-and-remarks/2022/march/testimony-ambassador-katherine-tai-senate-finance-committee-hearing-presidents-2022-trade-policy>.

3 For more information on the 301 exclusion process, please refer to "Office of the U.S. Trade Representative Reinstates 352 Section 301 Exclusions" elsewhere in this newsletter.

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