Tai Says Globalization Led to Chinese Manufacturing Dominance
U.S. Trade Representative Katherine Tai, speaking April 5 at the American University Washington College of Law, said the traditional approach to trade, "which prioritized aggressive liberalization and tariff elimination," had "significant costs" in addition to "significant benefits."
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Tai said "our supply chains became more dispersed and fragile" as companies focused on "maximum efficiency," and the domestic manufacturing losses "fueled resentment and mistrust in global institutions and the international economic system here in the United States and elsewhere."
"And this version of globalization -- focused on low costs and weak regulation -- is responsible for how economies like the People’s Republic of China came to control a number of key industries.
"The PRC joined the World Trade Organization twenty years ago. But it has doubled down on its state-led, non-market economic model over time. And the PRC continues to use unfair, distortive trade policies and practices in pursuit of harmful and anticompetitive industrial policy objectives," she said, according to prepared remarks posted by the Office of the U.S. Trade Representative.
Tai pointed to the Japanese critical minerals deal as a step toward lessening dependence on China for important inputs. The Inflation Reduction Act spurred concerns for Japan and the EU, Tai said, and USTR talked with officials from both governments as a result.
"The critical minerals agreement covers a slew of issues needed to bolster supply chains -- like commitments on export duties, non-market policies, best practices on investment screening, and labor rights.
"This agreement demonstrates that the United States can -- and will -- work with our trading partners to promote our collective resilience and security. And that is why we have also started negotiating a similar agreement with the EU," she said.