The U.S. Trade Representative appeared before the House Ways & Means Committee on Tuesday morning, and heads to the Senate Finance Committee on Wednesday.
A Big Update: The Biden administration announced on Wednesday morning that it will initiate an investigation into Chinese shipbuilding practices. President Biden, who is set to visit United Steelworkers headquarters in Pittsburgh on Wednesday, also will call on the U.S. Trade Representative to triple tariff rates on imports of Chinese steel.
U.S. Trade Representative Katherine Tai told Members of Congress on Tuesday her agency is “making progress” on the long-awaited review of tariffs placed on Chinese imports during the Trump administration. Tai also confirmed USTR is closely reviewing a petition filed by the United Steelworkers and other trade unions asking the Biden administration to investigate the predatory trade practices of China’s shipbuilding industry.
In a jam-packed, nearly 5-hour hearing held by the House Ways & Means Committee, Tai said USTR is working to implement a trade policy that will “give all Americans a fair shot and ensure that our system is set up for inclusive and durable growth.” In her testimony, Tai noted that U.S. trade policy has often pitted Americans against each other, and her goal is to create a new system that works for everyone.
“Asking old tools to solve new challenges—like economic insecurity, fragile supply chains, and a worsening climate crisis—is destined to fail. We must question assumptions, revisit norms, and think creatively and strategically,” Tai testified. “In this new era, we increasingly measure success and progress by the degree to which we are delivering real benefits to more Americans across our society—no matter where you live or whether you have a college degree.”
Trade policy covers a wide-range of constituencies, as the hearing showed. Members of Congress asked Tai about an eclectic range of issues, from agricultural policy to digital trade to the U.S. trade relationship with countries like Ethiopia and Haiti. Some Members also used the hearing as an opportunity to grandstand.
Here are the Alliance for American Manufacturing, we were most interested in the actual issues impacting manufacturing, factory workers, and the industrial sector, including Tai’s thoughts on how best to counter China’s continued predatory trade practices.
Tai testified that China’s unfair policies “have devastated many working communities and industries across our country,” including steel, aluminum, solar panels, batteries, electric vehicles, and critical minerals. She said the administration is “prepared to use our trade tools” to counter this malfeasance, including via the enactment of tariffs.
Several Members of the committee asked Tai about the ongoing review of the current “Section 301” tariffs on Chinese imports. The trade ambassador responded that USTR is “very close” to concluding the review, although she did not offer a more specific timeframe. Likewise, Tai noted the administration expects to soon announce whether to proceed with an investigation into China’s shipbuilding practices.
Tai also made sure to point out some of the administration’s successes in implementing a “worker-centered trade policy,” including the use of the “rapid response” labor mechanism (RRM) in the United States Mexico Canada (USMCA) free trade agreement.
“Since 2021, the United States has sought Mexico’s review under the RRM 22 times at facilities that span various industries, including automotive, garments, mining, and services,” Tai testified. “These cases have so far directly benefited 30,000 workers, provided 5 million dollars in backpay and benefits to workers, ensured wrongly terminated workers were reinstated, and helped secure free and fair elections in which workers selected independent unions to represent them.”
Ways & Means is scheduled to take up trade legislation on Wednesday. One of the bills brought forth is expected to reauthorize the expired General System of Preferences (GSP) program. While Tai appeared supportive of that effort, she also encouraged the committee to take up legislation to reauthorize the also-expired Trade Adjustment Assistance (TAA) program, which provides support to American workers who lose their jobs due to trade.
That is also one of the recommendations put forth by AAM President Scott Paul in a letter sent to Congressional leaders this week. Paul urged Members to follow the “three-legged stool” of trade policy — expanding exports, enforcing trade laws, and assisting workers hurt by trade. Focusing on reforming GSP alone without also reauthorizing TAA is a mistake, Paul wrote.
“Regrettably, Congress has all too often neglected enforcement and adjustment as it has sought to expand foreign market access and facilitate imports,” Paul wrote. “As your committees proceed with consideration of trade policy measures, we strongly urge that you fully address trade cheating and provide assistance to workers who have involuntarily lost their jobs due to foreign competition.”
Another interesting development during Tuesday’s hearing centered on de minimis reform. Republican Members of the Ways & Means panel are expected to bring up legislation on Wednesday that would seek to prohibit some imports from China from using the de minimis rule to send goods to the United States duty-free. But Rep. Earl Blumenauer (D-Ore.), who has led an effort on Capitol Hill for years to reform de minimis, cautioned this new bill will not go far enough and may end up making the problem worse.
“We’re all concerned about the influence that China has, its unfair advantage. We all are aware that, I forget the latest, but the billions of uninspected packages that are leaking through this system, and the threats that it poses not just to public safety but to domestic businesses,” Blumenauer said. “And I’m hopeful that we can have that spirit of cooperation, that Chairman’s concerned about being flexible, we can work that through. Because we can do better than give China a pass on de minimis.”
Tai’s time on Capitol Hill this week isn’t over yet; she is scheduled to appear before the Senate Finance Committee on Wednesday. We’ll recap that hearing, too, and we’ll be monitoring the legislative action on trade scheduled to take place in the House Ways & Means panel.
In the meantime, if you have around five hours to spare, you can check out Tai’s full testimony here.