Trade won’t be on 'back burner' for Biden, USTR pick Tai tells Senate

U.S. Trade Representative nominee Katherine Tai pushed back on concerns the Biden White House will “stand still” on trade policy during her confirmation hearing Thursday, telling senators she does not expect to be sidelined in policymaking.

Senators from both parties pressed Tai on the Biden administration’s pledge to not negotiate any major new trade deals until it secures domestic economic stimulus from Congress. “You must make the president understand that trade is a domestic priority,” Ranking Member Mike Crapo (R-Idaho) told the nominee.

Tai used the hearing to respond to those concerned of a trade policy pause, as well as worries that the former House lawyer could be sidelined in a Cabinet full of White House veterans and longtime Biden advisers.

“To the extent I have been privy to conversations or have been made aware of the Biden administration outlook, I don't expect, if confirmed, to be put on the back burner at all,” she said.

No rush for U.K. deal: While Tai pledged to stay busy on trade policy, she did not stake out concrete positions on major questions facing her agency, such as ongoing talks with the United Kingdom on a new trade deal.

The deal must be signed by July 1 to qualify for fast-track treatment under the trade promotion authority. And to meet that deadline, USTR would have to formally notify Congress by April 1 of its intent to sign the pact. But Tai seemed in no rush to finish the negotiations, saying she needed to dig into the details of the Trump administration’s talks.

"If confirmed, it will be important to me to review the progress and the conversations so far,” Tai said, noting the economic situation has changed since the Trump administration laid out its negotiating objectives for the agreement in 2018, due to the pandemic and the U.K. leaving the European Union.

TPP a ‘solid formula’: Tai was similarly noncommittal about restarting negotiations on a new trade deal in the Asia-Pacific after the Trump administration abandoned the Trans-Pacific Partnership that President Barack Obama’s team negotiated.

Tai called the model of engaging friendly nations in Asia a “solid formula,” especially to answer the rise of China. But she also warned the world is "is very different in important ways" than 2015 and 2016, when Obama's team hammered out TPP. And she said the U.S. must “revisit” its approach to Beijing as part of a “holistic” review of China policy.

“What the most recent years have taught us is that we need to revisit how we conduct our economic activity, our cooperation and our trade policies,” Tai said, “not to become China, but how to be true to ourselves and our traditions, and be more strategic, knowing the quantity and the strategy and ambition that we are up against.”

Tariffs up in the air: Tai gave little indication she would advise Biden to unilaterally lift the tariffs that Trump imposed on steel and aluminum imports from around the world, despite the pressure the new president faces from the EU to take that step in regard to its exports.

Calling tariffs a “legitimate tool” in trade policy, she also said the steel issue stems from overproduction from China and other nations. An "effective solution" will use "a whole slew of policy tools to address that larger problem,” she said.

Boeing-Airbus deal targeted: Tai told Sen. Maria Cantwell (D-Wash.) that she shares a desire to end the dispute with the EU over government subsidies for airplane makers that dates back to the mid-2000s. Some trade enthusiasts are hopeful the Biden administration could reach a resolution as it resets relations with Europe.

“It is arguably one of the disputes that started to break the WTO dispute settlement system,” Tai said. “If confirmed, I would very much be interested in figuring out, pardon the pun, how to land this particular plane, because it has been going on for a very long time.”

Trade agreement approach: Sen. Pat Toomey (R-Pa.) asked Tai whether a trade agreement with another developed economy would ideally include “zero tariffs, zero quotas, zero obstacles” to the exchange of goods. Her answer brought one of the hearing’s only tense moments.

“Maybe if you had asked me this question five or 10 years ago, I would have been inclined to say yes,” Tai said. But she acknowledged that Trump’s trade policies and the pandemic have shifted her outlook. “Our trade policies need to be nuanced and need to take into account all of the lessons we have learned, many of them very painful, from our most recent history.”

“I am very disappointed with that answer,” Toomey replied. “That does give me some concern about what your goals would be in a negotiation.”

What’s next: Despite Toomey’s disapproval, Tai is expected to win broad support from Finance Committee members and be confirmed easily by the full Senate. For some Republicans, the bigger question is whether the president will follow her recommendations.

“I expect Ms. Tai will well demonstrate in today’s hearing that she has the requisite skill set to deliver” an “energetic” trade policy, Crapo said at the outset. “But the question is whether she will have the president’s support to do so.”

CORRECTION: An earlier version of this report misstated the day of Tai's hearing. Tai's hearing is on Thursday.