White House to keep tariffs in place on more than $350 billion in Chinese goods 

Trade attorney Katherine Tai, who is President Joe Biden’s pick for United States Trade Representative, has reportedly advised American business executives to live with the trade duties negotiated with China.

She is said to have told executives at a private meeting hosted by the Business Round Table last month that lobbying for the duties to be removed wouldn’t work. Instead, Tai advised companies keen to keep the so-called phase one trade deal struck by the Trump administration and Beijing, to be prepared to live with the tariffs too.

Tai’s frank assessment offers a glimpse of the methodical approach she will take as America’s top trade official, as well as the hard line she is expected to pursue in US/China trade negotiations. This assessment comes as the White House has said it would keep tariffs in place on more than US$350 billion in Chinese goods.

Biden is depending on Tai’s low profile and her pragmatic style to distance him from the chaos that defined the Trump administration’s trade agenda. The President plans to take a more careful approach to trade but his administration has provided little detail on the specific policies to be pursued.

Tai’s confirmation hearing this Thursday before the Senate Finance Committee will represent one of the first opportunities to hear more about Biden’s plans and Tai’s personal views on a long list of trade challenges ahead.

Pressing trade matters ahead

In addition to China, some of the other pressing matters Tai will face as trade chief include outstanding irritants with the European Union and pressure to enforce Mexican labour requirements in the new North American Free Trade Agreement. Tai has assembled a team of key allies, who are expected to advocate for strong labour and environmental provisions in trade deals.

They include Nora Todd, former senior staffer to Ohio Senator Sherrod Brown, who will serve as her chief of staff, and Greta Peisch, trade counsel to Oregon Senator Ron Wyden, who is her pick for general counsel. As America’s trade chief, Tai will be at the centre of helping to manage US relations with China and their massive economic consequences.

She will help write the next chapter on the thorny relationship between the world’s biggest economies, which is poised to get even more contentious in the years ahead. Former colleagues state that Tai, who won multiple big cases against China as a trade lawyer during the Obama administration will be unwavering in negotiations with Beijing.

If confirmed, Tai will be the first Asian American to serve as US trade chief. She declined to comment ahead of her confirmation.

Her parents were born in China and have lived in Taiwan. Tai is a fluent Mandarin speaker and has spent the majority of her career in Washington D.C.

Her most recently appointment was chief counsel on the House Ways and Means Committee. Tai is credited with helping to convince the Trump administration and Republicans in Congress to agree to major Democratic demands in the US-Mexico-Canada-Agreement, one of the biggest bipartisan trade deals Congress has ever passed.

Analysts argue that Tai’s predecessor, Robert Lighthizer, disrupted the way most of establishment Washington had thought about trade for decades and frequently kept the small agency in the international headlines. However, Tai’s style is said to be much less disruptive.

Keeping some of Trump’s trade legacy

Trade advocates claim that there are some aspects of former President Donald Trump’s trade legacy that Biden and Tai may be keen to keep. These include the emphasis on ‘Buy America’ policies in support of domestic manufacturing over relying on imports.

Biden is set to study ways to end US dependence on other countries for critical goods, something Tai also supports.

“We need to be thinking ahead,” Tai said at a Center for American Progress event last year, referring to lessons learned from COVID-19 and the next national emergency that could threaten America’s supply chains.

Eric Altbach, a lobbyist who previously worked with Tai, remarked that “the Chinese rightfully expect her to be really tough”.

But the 46-year-old Tai is not personally close with Biden, while other Cabinet officials are.

This has raised questions about how much influence she will have on shaping economic policies broadly or even if she will have the President’s ear.