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US-China trade

Quick take: Biden taps Katherine Tai as USTR


Published 10 December 2020

President-elect Biden has selected Katherine Tai as the next US Trade Representative (USTR). Given her impeccable trade credentials – and language skills – this represents a canny choice. Her selection raises questions that have crucial implications for US trade policy.

It would be hard to find fault in President-elect Biden’s selection of Katherine Tai as US Trade Representative (USTR). As Chief Counsel of the House Ways and Means Committee, Tai possesses impeccable trade credentials at a time when the incoming USTR will have little time for “on the job training”.

This is no small matter. Previous appointees have sometimes been notable for their lack of trade expertise. President Obama, for example, tapped trade-neophyte Ron Kirk, the mayor of Dallas, for the post, and before that President Clinton appointed Mickey Kantor, a Los Angeles labor lawyer with scant trade experience, to the top trade spot.

Ready for the job

Unlike some of her predecessors therefore, Tai will hit the ground running on day one – as she will need to. While her appointment is welcome for that alone, she’ll also bring two other formidable attributes to the table. 

First, Tai clearly knows the China brief. Prior to her stint on the Hill, Tai served as the chief China enforcement official at USTR and has argued US dispute settlement cases against China at the World Trade Organization (WTO). She is a fluent Mandarin speaker. 

Second, Tai’s appointment is tactically shrewd in terms of the tricky domestic politics the incoming Biden administration will have to navigate. Tai has a demonstrated ability to find common ground between moderates on trade and those advocating for a more progressive labor and environmental stance in US trade policy. She was an important player in the negotiations between Congressional Democrats (who pushed to toughen labor and environment provisions) and the Trump administration on the revised NAFTA agreement (now known as USMCA). The deal ultimately received widespread bipartisan support.

Tai is well regarded across the political spectrum and is able to thread the needle on difficult compromises. As the influence – and expectations – of the progressive wing of the Democratic Party continues to grow, this talent will take on even greater importance.

Reading the tea leaves

As is perfectly appropriate for a person in her current position, Tai’s public comments on specific trade issues have typically been somewhat guarded. So attempting to read the tea leaves to discern her precise views is a bit dubious. But several things are clear:

Tai will be entirely comfortable in aggressively confronting China when needed. The punitive tariffs imposed on China by the Trump administration will remain in place at least initially, as a thorough review of the Phase One agreement is undertaken, presumably under the direction of Tai. She has also expressed comfort with subsidies and incentives to reduce US overreliance on Chinese imports. And more broadly speaking, Tai is completely aligned with Biden’s desire to pursue a US worker-centric trade policy.

Questions remain

Tai’s selection does raise a couple of questions. As Biden’s cabinet continues to take shape, it is already evident that many key posts will be filled by individuals with long personal histories – and in some cases, close personal friendships – with Joe Biden.

Anthony Blinken, the incoming Secretary of State served as Biden’s chief foreign policy advisor when he was Vice President and they’ve been friends for decades. Biden also has a close personal rapport with the Treasury Secretary-designate Janet Yellen, who was Federal Reserve Chair during the Obama administration. And John Kerry, who will serve as climate change czar, is perhaps Biden’s closest friend from his almost four-decade career in the US Congress.

Tai simply does not have this type of relationship with the President-elect – a fact which will not be lost on her foreign interlocutors. When John Kerry, for example, delivers a difficult message on climate issues to a foreign government official, that official will know that Kerry speaks for the US President. His words will carry commensurate weight. Will Katherine Tai’s words on trade carry the same gravitas in foreign capitals?

This dynamic will also play out in the corridors of the White House. Disputes within the cabinet room can sometimes grow more heated than disputes with foreign countries. Should differences of opinion on China policy, for example, emerge between Tai and Biden “old hands” such as Blinken, will Tai be able to prevail? 

At a minimum, Tai’s sterling credentials and deep expertise will be respected and valued by her cabinet colleagues – and of course her boss. So she should have at least a fighting chance to build the muscle she’ll need to occasionally roll a powerful cabinet colleague. But as she moves from a low-profile staff position to the big leagues, there will initially be a stature gap with her colleagues who have already served in cabinet-level positions.

The right person at the right time?

To put things mildly, Katherine Tai has been given a challenging portfolio. The two largest economies in the world are locked in an ongoing trade war, the global trade system, which has driven economic development for seven decades, is in danger cracking up, and the outgoing administration will leave behind a number of provocative trade actions that will have to be maintained, rescinded, or adjusted. 

The appointment of a US Trade Representative at this time is arguably more important than at any other time since the position was first established by President Kennedy in 1962. Fortunately, it appears, on balance, that President-elect Biden has made a solid choice. Given what’s at stake, it is not only critical for the US that Katherine Tai succeed; it is equally in the best interests of all major trading nations. 

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Author

Stephen Olson

Stephen Olson is a Senior Research Fellow at the Hinrich Foundation with over 30 years of international trade experience. Previously, he was an international trade negotiator in Washington DC and served on the US negotiating team for NAFTA negotiations.

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