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Tai, speaking at a Roosevelt Institute conference on industrial
policy, said that government efforts to rebuild U.S. industries
must complement trade policies and rejected criticism of the
Biden administration's lack of appetite for traditional
free-trade deals.
"We have not sworn off market opening, liberalization and
efficiency," Tai said in prepared remarks. "But it cannot come
at the cost of further weakening our supply chains, decimating
our manufacturing communities, and destroying our planet."
Tai said that traditional trade deals of the past that
eliminated tariffs led to offshoring, de-industrialization and
weakening of supply chains that were exposed during the COVID-19
pandemic.
But she added that the new U.S. focus on industrial policy --
through investments in semiconductors, research, infrastructure
and clean energy -- will not devolve the global economy into a
"state of nature" where countries look only after their own
interests and the strongest thrive.
"That is not the Biden administration’s vision," Tai said,
adding that there was a need for trade rules that recognize key
domestic economic priorities as well as for cooperation with
other countries to improve prospects for their citizens.
"We believe industrial policy and trade policy must complement
each other if we are going to realize this goal," Tai said.
The Biden administration is pursuing a number of trade-related
negotiations that stop well short of reducing tariffs, with the
European Union, Britain, Indo-Pacific countries and others. But
these are focused on subjects including harmonizing regulations,
digital trade flows, labor rights and environmental standards.
Tai said traditional trade tools and institutions have failed to
address distortions from China's "non-transparent, non-market,
state-directed industrial dominance policies," she said,
limiting the ability of workers in free-market countries to
compete.
She also said that the United States needs to invest more in its
infrastructure to compete with China and other countries that
have been making such investments for decades.
(Reporting by David Lawder; Editing by Mark Porter)
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