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U.S. Trade Representative Katherine Tai defended tough tariff increases on countries like China, calling them a “legitimate and constructive” step to reinvigorate domestic industry when combined with investment.
Tai’s comments to AFP came a week after China’s major tariff hikes on electric vehicles, EV batteries and solar cells went into effect, with future taxes on other products also recently finalized. did.
The latest move, which targeted $18 billion worth of Chinese goods, comes weeks before the US presidential election in November, and comes as both Democrats and Republicans seek to control China as competition intensifies between the US and China. We are pushing a hard line.
In an interview Thursday reflecting on his tenure, Tai defended the use of tariffs as a tool to “combat unfair trade” with China.
He added that the rate hikes are aimed at ensuring that U.S. investment in clean energy “takes root.”
“We wanted to make sure that these increased areas were combined with the investments that we were making,” Tai said, referring to efforts to build domestic industries such as EVs, batteries and semiconductors. .
“Once you lose an industry, it’s very difficult to bring it back from the brink,” she says.
U.S. manufacturing has been in decline in recent decades, during which time production has shifted overseas and competition from China has increased.
China’s share of global manufacturing output is about 30%, far exceeding that of the United States and other developed countries.
Tai acknowledged that while the U.S. is seeing new manufacturing investment, “it’s going to take a lot longer to get manufacturing back in full force.”
However, she stressed that Washington is not aiming to bring all production back domestically, but rather to recover from previous “levels of erosion.”
President Joe Biden has largely kept in place tariffs imposed by former President Donald Trump that affected about $300 billion in goods from China. This year’s price increase affects previous products and added products.
Estimates released in June by the think tank Tax Foundation found that the cumulative impact of tariffs would “depress GDP by 0.2% in the long run.”
The foundation added that further increases proposed by President Trump “could shrink GDP by at least 0.8%,” as Republicans seek another term in the White House.
Tai, who has served as president for more than three years, also cited ongoing talks on critical minerals and hopes the US government can reach new agreements with European partners.
A key element in negotiations on significant mineral deals is labor standards and how they are maintained.
“I remain very optimistic that we can achieve this type of new agreement that puts workers at the center,” she said.
He also expressed openness to talks on steel and aluminum.
Biden has suspended Trump-era tariffs on most European steel and aluminum and supports quotas that allow some imports without tariffs, but both sides face complex challenges to resolving the impasse. facing.
This is because they are also pushing for industrial decarbonization and combating non-market practices such as those of China.
“We’re not just trying to achieve more trade; we’re trying to achieve better trade,” Tai said.
He cited the U.S.-Mexico-Canada agreement, which allows for enforcement actions against factories for labor violations, as an example of “worker-centered trade.”
He added that Washington wants to “expand the dialogue beyond North America.”
But his term as trade secretary has been marked by challenges, including the stalling of the trade pillar of the Indo-Pacific Economic Framework for Prosperity, an agreement involving Asia-Pacific partners, amid concerns about labor issues.
Mr. Tai rejected the notion that labor regulations were alone posing “insurmountable challenges” and said countries continued to make progress this year.
He added that Washington still has a presence in the region: “We are there, we have been there and we are engaged.”
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