Tai Blames Trade Liberalization for De-Industrialization, Fragile Supply Chains
U.S. Trade Representative Katherine Tai said concentration of wealth, de-industrialization, the decimation of factory towns and fragile supply chains were consequences of "aggressive liberalization and tariff elimination" over the last 40 years.
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Tai, who was speaking to the left-of-center Roosevelt Institute Oct. 7, said those decisions, combined with China's distorting "industrial dominance policies," greatly "limited the ability of workers and industries in open markets and free societies like ours to thrive or even survive."
Still, Tai said the administration has "not sworn off market opening, liberalization, and efficiency" even as they see a need for changing the old, free-trade deal focused approach to trade.
She added: "But it cannot come at the cost of further weakening our supply chains, exacerbating high-risk reliances, decimating our manufacturing communities, and destroying our planet."
Tai said the administration and EU officials are "exploring ways to improve the effectiveness of our domestic measures that address market-distorting impacts, and also discussing ways to combat the negative effects in third countries."
She acknowledged that the Inflation Reduction Act's incentives to build a North American electric vehicle battery supply chain had caused anxiety among European officials. She said the EU's Carbon Border Adjustment Mechanism also has worried American officials.
But, she said, the U.S. will work with the EU and Indo-Pacific Economic Framework partners to create policies "to tackle this existential crisis that threatens all of us."