US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries.
Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized.
The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies.
Photo: AFP
In an interview on Thursday looking back on her term, Tai defended the use of tariffs as a means “to counterbalance unfair trade” with China.
The latest hikes, she added, aim to help US clean energy investments “take root.”
“We wanted to make sure that those increased areas are paired with the investments that we’re making,” Tai said, referring to efforts to build domestic industries, such as those for EVs, batteries and semiconductors.
“Once you’ve lost an industry, bringing it back from the brink is much, much harder,” she said.
The US manufacturing industry has declined in recent decades, a period that saw production shift offshore and heightened competition from China.
China’s share of global manufacturing output has been about 30 percent, significantly above the US and other developed countries.
Tai said that while the US has seen new manufacturing investment, “in order to bring manufacturing back across the board, it is going to take more time.”
However, she stressed that Washington is not aiming to bring all production back on its shores, but to recover from earlier “levels of erosion.”
US President Joe Biden has largely maintained tariffs imposed by former US president Donald Trump, which affected some US$300 billion in goods from China. The hikes this year include earlier products and some additional ones.
An estimate by think tank the Tax Foundation in June noted the cumulative impact of tariffs would “reduce long-run GDP by 0.2 percent.”
Further increases proposed by Trump, the Republican Party’s nominee for president, could “shrink GDP by at least 0.8 percent,” the foundation added.
Tai, who has held office for more than three years, is also hopeful that Washington would reach new deals with European partners — referring to ongoing talks on critical minerals.
A key factor in negotiations on a critical minerals deal has been labor standards and how these would be upheld.
“I remain very, very optimistic that we will be able to achieve these kinds of new agreements that put workers at their center,” she said.
She sounded a positive note on steel and aluminum talks as well.
Biden has paused Trump-era tariffs on most European steel and aluminum in favor of quotas allowing some imports without levies, but both sides face a complicated task in resolving an impasse.
This is because they are also pushing for the decarbonization of industries and to combat non-market practices from parties such as China.
“We’re not just trying to accomplish more trade. We’re trying to accomplish better trade,” Tai said.
She pointed to the US-Mexico-Canada Agreement, which allows enforcement actions against factories over labor violations, as an example of “worker-centered trade.”
She added that Washington wants to “expand the conversation beyond North America” and to Europe.
However, the trade chief’s term has seen challenges including a snag with the trade pillar of the Indo-Pacific Economic Framework for Prosperity — a pact involving Asia-Pacific partners — amid labor concerns.
Tai pushed back on the view that labor provisions alone have caused “insurmountable challenges,” saying countries are still making progress this year.
She added that Washington remains present in the region: “We are there, we have been, we are engaging.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that its investment plan in Arizona is going according to schedule, following a local media report claiming that the company is planning to break ground on its third wafer fab in the US in June. In a statement, TSMC said it does not comment on market speculation, but that its investments in Arizona are proceeding well. TSMC is investing more than US$65 billion in Arizona to build three advanced wafer fabs. The first one has started production using the 4-nanometer (nm) process, while the second one would start mass production using the
A TAIWAN DEAL: TSMC is in early talks to fully operate Intel’s US semiconductor factories in a deal first raised by Trump officials, but Intel’s interest is uncertain Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter. Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal. Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies. Trump officials raised the
‘SILVER LINING’: Although the news caused TSMC to fall on the local market, an analyst said that as tariffs are not set to go into effect until April, there is still time for negotiations US President Donald Trump on Tuesday said that he would likely impose tariffs on semiconductor, automobile and pharmaceutical imports of about 25 percent, with an announcement coming as soon as April 2 in a move that would represent a dramatic widening of the US leader’s trade war. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25 percent,” Trump told reporters at his Mar-a-Lago club when asked about his plan for auto tariffs. Asked about similar levies on pharmaceutical drugs and semiconductors, the president said that “it’ll be 25 percent and higher, and it’ll
CHIP BOOM: Revenue for the semiconductor industry is set to reach US$1 trillion by 2032, opening up opportunities for the chip pacakging and testing company, it said ASE Technology Holding Co (日月光投控), the world’s largest provider of outsourced semiconductor assembly and test (OSAT) services, yesterday launched a new advanced manufacturing facility in Penang, Malaysia, aiming to meet growing demand for emerging technologies such as generative artificial intelligence (AI) applications. The US$300 million facility is a critical step in expanding ASE’s global footprint, offering an alternative for customers from the US, Europe, Japan, South Korea and China to assemble and test chips outside of Taiwan amid efforts to diversify supply chains. The plant, the company’s fifth in Malaysia, is part of a strategic expansion plan that would more than triple
RSS