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What Biden plans to do differently when it comes to trade with China


America has been on the wrong path when it comes to its trade policy with China. That was the message from the top U.S. trade official, Katherine Tai, in a speech yesterday. President Biden and his administration are trying to distance themselves from the Trump trade war with China, but the administration is keeping the tariffs in place. I talked to Ambassador Tai about what the administration plans to do differently. She said, for starters, they'll reopen a dialogue with China.

KATHERINE TAI: The second piece is - and this is a really critical piece that is a hallmark of the Biden administration - we will make sure that our trade policies are coordinated with and reinforce our domestic economic priorities. And that means that we will start a tariff exclusion process.

MARTIN: Just to clarify that - a tariff exclusion process means that specific businesses and industries that have been hard-hit by tariffs could ask for a carve-out.

TAI: Yes. Specific products - that's right - could become eligible for exemption from tariffs. My third point is we have to - we have to - raise with China our continuing and intensifying concerns about the impacts of China's very muscular industrial policies on economies like ours. And the last element, which is a critical one, is that we will continue to build out our work with partners and allies who share our interests and who also are impacted by China's policies.

MARTIN: You are, however, keeping in place the tariffs that were the central piece of former President Trump's trade policy with China, correct?

TAI: So that enforcement structure is a part of the architecture of the relationship that we have with China right now. So yes, this is where we are starting. In terms of our next steps with China, it's to start from where we are.

MARTIN: So that's yes, by all accounts, these tariffs are attacks on Americans, right? Are they supposed to just keep on keeping on, American consumers who end up bearing the brunt of this?

TAI: Well, I think that what you need to see with respect to the tariffs and the authority that they were raised under is a trade enforcement authority. And so what I want to put in context for everyone is that when I talk about the trade enforcement structure, it is the actions that were taken pursuant to an investigation and findings that these intellectual property and forced tech transfer practices of China had harmed the American economy. So it is a part of the current status of the U.S.-China trade relationship. And what we do with where we are and how we evolve from where we are is going to be determined in a very, very large part by the conversations that we are going to have, starting soon.

MARTIN: It sounds like you're saying, though, to consumers something akin to what the Trump administration said, which was, listen, we know this is hard on you, but you sort of have to take one for the team because this is the leverage we have. Tariffs are the leverage we have against China to fix these other problems.

TAI: Let me take this opportunity to distinguish what we're doing from the Trump administration, which is to say this. In terms of laying out a vision today, that is and has been a Biden administration priority - to define the problem in the U.S.-China trade relationship clearly for everyone, to lay it out so that we can then lay out our goals in terms of what we are trying to effectuate. In trade policy, we take a holistic approach that trade policy must stay lodged at the intersection of our foreign policy and our domestic economic policy. And those are things that the Biden administration is bringing to shaping the U.S.-China trade relationship and ensuring that we take steps to defend the interests of America's workers and businesses and farmers.

MARTIN: What about U.S. manufacturers who make things that require parts made in China - for example, solar companies that source panels and cells from China? This is obviously an industry the Biden administration wants to support, but these tariffs seem to be doing the opposite by making it more expensive for them to get these parts.

TAI: So I'm glad you raised the issue of solar because the story that I really wanted to share with America is the trajectory of the American solar cell producers and how the hope and the strength of that industry were directly undercut by these very powerful industrial policies in China. It is really a very clear example of what is at stake about changing the dynamics in this relationship.

MARTIN: And forgive me, I am going to push you a little more. What do you tell these manufacturers for whom the current tariffs are economically oppressive to them? As they try to get their foothold in the global market, they are essentially being forced to pay more for critical parts because of the Biden administration's larger trade objectives.

TAI: So Rachel, I'm not trying to be evasive, but this is why we are starting the tariff exclusion process.

MARTIN: So you could imagine solar alternative energy, other businesses in that particular industry being able to apply for exemptions and getting them?

TAI: Rachel, everyone can apply. But with respect to solar, you know, there is a very large domestic agenda that we have where all of these equities have to be weighed and trade needs to be a part of that larger conversation.

MARTIN: Lastly, in a response to a question after your speech, you said that smarter trade is better than liberal trade. Can you expand on that? Does a free trade philosophy still work for America right now?

TAI: Our trade policies for several decades now have been focused on the theory that liberalization and increasing trade in and of themselves will lead to more peace and prosperity. I think what we have found through COVID-19, through contending with the non-market competition that we have from economies like China - have demonstrated that just pursuing liberalization and more trade can lead us to a very, very vulnerable place. And that's what I mean by seeking smarter and more resilient trade.

MARTIN: We so appreciate you taking the time, Ambassador Katherine Tai. She is the U.S. trade representative. Thank you so much.

TAI: Thank you, Rachel. Transcript provided by NPR, Copyright NPR.