USTR Fields Questions on Trade Deal Enforcement Before Senate Finance Committee

U.S. Trade Representative Katherine Tai gave testimony April 17 to the Senate Finance Committee regarding President Joe Biden’s 2024 trade policy agenda. She touched mainly on trade deal enforcement, U.S. exporters’ access to new markets and the USTR’s new stance on digital trade, though she also discussed issues such as forced labor and the upcoming legislation on the Generalized System of Preferences benefits program.

She appeared before the House Ways and Means Committee April 16 for a similar discussion (see 2404160071).

In response to multiple senators asking when a review of the Section 301 tariffs would be complete, she answered “very, very soon.” If it decides to do so, USTR also will announce its plan to triple tariffs on Chinese steel at that time, as urged by President Joe Biden on April 17, she said (see 2404170040).

Many senators raised the issue of trade deal enforcement. Sen. Mike Crapo, R-Idaho, called Biden’s enforcement record “the weakest of any administration in 25 years.” He pointed out that USTR hasn't brought any enforcement actions against China under the World Trade Organization, the phase one deal or Section 301 tariffs until that morning (see 2404170029).

“Today’s announcement accepting a Section 301 shipbuilding petition, which could take a full year to complete, does not make up for over three years of inaction on China,” he said.

His sentiment was echoed by Sen. John Cornyn III, R-Texas, who, in a slightly heated exchange with Tai, asked whether the administration had taken any enforcement actions against China at all, in the WTO or elsewhere. China has brought WTO cases against the U.S., he argued, taking advantage of that system while the U.S. refuses to in turn.

“We have, in the past, taken lots of actions against China,” Tai said. “But it’s been ineffective, Senator Cornyn, which is why we no longer do things that aren’t effective.”

Tai said her office prefers to use other methods of enforcement -- especially Section 301 tariffs, which she called “perhaps the most important enforcement tool at USTR.”

Sen. Ron Wyden, D-Ore., chairman of the Finance Committee, noted that Congress had given USTR the power to raise Section 301 cases independently and asked whether it would be employing the tariffs in regard to Chinese subsidies in other areas, including semiconductors, electric vehicles, batteries and solar. She said that it “remains very much in the forefront of our minds.”

However, Sen. Elizabeth Warren, D-Mass., supported the USTR’s decision to remove a number of foreign policies and programs from its annual report on foreign trade barriers, something that others had raised as more evidence that the administration wasn’t focusing adequately on enforcement.

“Up until now, corporate interest has stacked this report with kind of a laundry list of any other policy from any other country that they think somehow nips in to their own profits,” she said. “But not you. You haven't fallen for this this year; you refuse to label common-sense tech policies from the EU, from Canada and from other allies as trade barriers.”

Several senators also raised concerns about the forced labor practices of exporters from China, India and Cuba. Sen. Bill Cassidy, R-La., said that a whistleblower found “unsanitary conditions and rampant labor abuses” in the Indian shrimp industry, asking whether CBP would take action, and Sen. Bob Menendez, D-N.J., brought up the Mexican government’s practice of “importing” doctors who had actually been sent to the country against their will by the Cuban regime.

Tai said that her office “will continue to champion this particular issue,” although she noted that the Cuban practice was likely a trafficking challenge rather than one involving products made by forced labor.

Tai also briefly discussed GSP legislation, which had hit the House Ways and Means Committee for markup that day (see 2404160029).

And she pushed back against several attacks on the USTR’s decision to withdraw from its commitments on digital free trade at the WTO, refusing to call it “scaling back.” She said the choice was an answer to legislation being raised in both houses directed at increasing U.S. citizens’ safety and privacy online and part of an effort toward “upgrading and advancing our conversation about what digital trade means.”

Wrapping up the hearing, Wyden expressed satisfaction with the administration's policies overall, but added, “Let’s just play more offense.”