Source: Blog – Alliance for American Manufacturing

“We’re going to have to be more strategic. We’re going to have to play a new kind of defense and offense. We can’t just rely on the promise of this very beautiful vision of very pure free trade taking us to the promised land,” said U.S. Trade Representative Katherine Tai. Photo by AAM

U.S. Trade Representative Katherine Tai was joined by other leaders in America’s industrial policy push to discuss the state of American manufacturing at a Semafor event Wednesday.

United States Trade Representative Katherine Tai reaffirmed the Biden administration’s commitment to trade action during remarks at Semafor’s “State of Made in America” event Wednesday.  

A congressionally mandated four-year review of Section 301 tariffs has been long awaited by the public, and Tai stated that the Biden administration is still in process of evaluating whether the Chinese government has improved its trade practices and how the U.S. can continue a trade rebalance. However, Section 301 tariffs, which were set to expire on Sept. 30, were extended until the end of 2023, and Tai’s remarks suggest that the Biden administration continues to see the need for trade action to counter continued economic manipulation.

“The global economy that we’re living in right now is actually quite unfair,” Tai said. “It’s quite tilted. And so, I think that the tariffs are part of the U.S.-China bilateral relationship. One of the most important aspects of this set of trade tools and trade actions is to call into our consciousness the fact of the unlevelness of the playing field.”

As Tai discussed during her remarks, Beijing has grand ambitions to dominate the electric vehicle industry, not only within China, but also in the global market. China’s government utilizes a slew of predatory practices, including deep state subsidies and likely the use of forced labor, to give its manufacturers an upper hand. It’s a strategy that that China has used successfully to decimate its competition in steel and solar manufacturing over the past several decades, eliminating thousands of U.S. jobs and devastating American communities.

However, Section 232 and Section 301 trade action is ameliorating that damage.

“From our perspective, in order to be able to survive in a global economy where we’re all interconnected and policies in one part of the world have spillover effects into other parts of the world, we’re going to have to change our approach,” Tai said. “We’re going to have to be more strategic. We’re going to have to play a new kind of defense and offense. We can’t just rely on the promise of this very beautiful vision of very pure free trade taking us to the promised land.”

Tai has long called for a modernization of trade tools that legislation like the Leveling the Playing Field Act 2.0 would achieve. The House Select Committee on the Chinese Communist Party echoed this call in its economic strategy report released earlier this week, specifically urging Congress to pass the Leveling the Playing Field Act 2.0 to address cross-border subsidies and expedite circumvention investigations.

Rather than aim for market dominance, as China’s industrial policy does, America’s objective is to increase resilience and grow the economy, Tai said.

“Trade policy is manufacturing policy,” Tai said, reflecting not only her office’s goal of advancing a worker-centered trade agenda, but also the Biden administration’s whole-of-government focus on revitalizing the nation’s manufacturing base. In this way, Tai said, she considers herself dually the U.S. trade representative and, informally, the U.S. manufacturing representative and balances her international discussions overseas with conversations with America’s workers and business owners.

“And as a result of those conversations and that kind of education here in our domestic economy with our people, only then can I be the most effective U.S. trade representative possible in all of the international engagements that I should run at,” Tai said.

It’s a methodology that has led Tai to sustain Section 232 and Section 301, which she highlighted were the products of “longstanding, bipartisan, nonpartisan economic concern.”

But, trade enforcement is just one part of the effort to re-establish America’s leadership in manufacturing and innovation.

Through executive order, President Biden included Buy America regulations in the Bipartisan Infrastructure Law, requiring that federally funded infrastructure projects use American-made iron, steel, construction materials, and manufactured products. Through Buy America, U.S. taxpayer dollars are reinvested into the American economy.

One of Buy America policy’s greatest advocates, Sen. Tammy Baldwin (D-Wis.) also spoke at the Semafor event Wednesday, with her comments focusing on the importance of full and faithful implementation of Buy America regulations.

“I believe that we passed the right policies, but we can’t just turn to the next challenge. Implementation is part of our responsibility in Congress, oversight to our committees of the faithful implementation of this major pieces of legislation, multi-year implementation, so that’s going to be a key factor,” Baldwin said. “If we drop the ball, even having passed these, we could still go the wrong direction, but as long as we still insist on faithful implementation, we’re in the right direction.”   

Deputy Commerce Secretary Don Graves, who also joined the Semafor event, discussed his agency’s mission to help America re-emerge as a “commercial powerhouse” through laws like the CHIPS and Science Act, which established a $52 billion fun to boost the U.S. semiconductor industry. This week, Commerce launched implementation of the CHIPS fund with the distribution of $35 million in federal incentives to BAE Systems to increase production at its New Hampshire facility for chips necessary for defense programs, like the F-35 fighter jet program.

“Don’t be surprised to see some multi-billion-dollar investments early in 2024,” Graves hinted. But, he cautioned that “in the grand scheme of things, when you have countries like China that have invested $150 billion in the last decade, we’re trying to outcompete a bunch of other people who have thrown investment into their technology.”

“We all recognize that we have to outcompete. We have to invest in smart ways because our competitors… they’re dong the same thing. They’ve had decades of industrial policy,” Graves said.

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