It says something when you haven’t made any enemies after working more than a decade in today’s viciously polarized Washington, especially on Capitol Hill. And it’s difficult—no, let’s be frank, it’s impossible—to find anyone who will say anything bad about Katherine Tai.
Perhaps that’s one reason the little-known Tai, a 46-year-old daughter of Chinese immigrants, became the first congressional staffer in memory to make the leap to a cabinet position as President Joe Biden’s nominated U.S. trade representative. “Freakishly smart.” “Tough.” “Fantastic.” Such comments pop up prodigiously from both sides of the aisle—but it’s noteworthy that all the above accolades came from Republican trade experts interviewed by Foreign Policy. Biden himself remarked, upon nominating her late last year, that “she’s earned praise from lawmakers of both parties and from both labor and business as well. Now that’s a feat.” Turning to Tai, Biden added: “I’ve gotten more calls complimenting me on your appointment than you can imagine.”
Tai will need all the friends and allies she can get in Washington, because she may not find many abroad. She faces a reordered world in which China and other major nations, including U.S. allies, are negotiating their own trade deals at a high rate, excluding the United States. This in turn has created one of the toughest trade environments ever for the United States, the nation that reinvented the global trading system after World War II. And it’s clear that Biden chose Tai, a graduate of Yale University and Harvard Law School who is fluent in Mandarin and understands Beijing’s aggressive trade practices as well as anyone, largely because China’s often illegal behavior poses the biggest trade challenge that Washington faces. She is considered a shoo-in for confirmation, though her hearing date has not been officially set (it is expected in late February), an administration official said.
But faced first with ending the COVID-19 pandemic, righting a teetering economy, and mitigating climate and immigration crises, not to mention addressing a dangerous diplomatic standoff with Iran, Biden and his team are trying to set aside trade as an issue for now. It’s still too raw a subject after years in which the Democratic Party nearly split apart over the question of free versus fair trade. Though Biden openly deplored his predecessor Donald Trump’s unilateral approach, especially toward China, he has set out no new trade agenda three weeks into his administration other than to say he plans to build a united front with like-minded nations.
And notably, even as he has reversed a plethora of Trump policies from climate to immigration to COVID-19, Biden has not yet indicated he’s ready to roll back Trump’s tariffs on China and the European allies he is wooing.
The administration official, asked what Tai’s trade priorities were, said they were still being discussed. “Trade policies that support and benefit American workers are what you’ll likely see her bring to the job,” he said, echoing the Biden team’s populist line. The administration, however, did announce “strong support” last week for former Nigerian Finance Minister Ngozi Okonjo-Iweala to serve as the World Trade Organization’s next director-general—yet another repudiation of Trump, who had blocked the appointment.
But Biden may not be able to set other trade issues aside. China is cutting new deals apace, as are Europe and Japan, and the World Trade Organization is all but broken. New challenges are arising quickly—for example, the long-running tariff dispute between Boeing and Airbus over government subsidies, in which French President Emmanuel Macron is pushing Biden hard for resolution. On Feb. 8, envoys from the United Kingdom and the European Union also pressured Biden on the issue, with EU Ambassador Stavros Lambrinidis saying that if it’s not resolved then China—which provides 100 percent subsidies to its aircraft industry—could soon be flooding the global market in that sector as well.
Other pressing issues hang on the question of a digital services tax partially blocked by the Trump administration; steel and aluminum tariffs that Trump slapped indiscriminately on allies as well as adversaries, even though the real issue was Chinese overcapacity in these metals; and a partly finished trade pact with Britain that awaits Biden’s perusal. Meanwhile the U.S.-Mexico-Canada Agreement (USMCA) that Tai helped to negotiate as a replacement for NAFTA when she was the House Ways and Means Committee’s chief trade counsel—Trump’s only real notable success in trade—is already starting to fall apart.
“Mexico is going to be a real problem,” Brian Pomper, a former Democratic lead trade counsel in the Senate, said in a phone interview. “There is a whole variety of areas where the Mexican government is ignoring its obligations under the USMCA, for example on energy contracts [where Mexico is favoring its state-owned companies]. You can’t give priority to domestic companies, and they are clearly doing so.”
One of the toughest issues Tai will have to deal with is also the most arcane and technical: fixing the Appellate Body of the WTO, in a long-running dispute that has all but paralyzed the global negotiating agenda. U.S. critics say the Appellate Body has made up its own rules as it goes along, often to the disadvantage of Washington, ruling illegal unilateral U.S. measures such as countervailing duties on countries accused of dumping in the U.S. market and harming U.S. manufacturers. The Trump administration reacted with fury, threatening to leave the WTO and refusing to appoint new judges to the panel. Now the Biden administration will have to pull out all the stops just to save the WTO and persuade other members to rewrite the rules.
All in all, it means the Biden team may be whistling past the trade graveyard right now, by thinking it can put off hard choices. “I think trade is going to be on the agenda whether or not the United States wants it to be,” said Wendy Cutler, who spent nearly three decades as a diplomat and negotiator at the Office of the U.S. Trade Representative and worked with Tai frequently.
“My major concern is while we’re trying to figure out a trade policy that works for us domestically, the rest of the world is moving on without us,” said Cutler, who is now a vice president at the Asia Society Policy Institute. “China is not holding still, and at the same time we’re losing our leverage with other countries, which want to reduce their reliance on the U.S. Look at the trade flows: Other countries are trading more and more with China and less with the U.S. That percentage lowers our leverage.”
This became clear when the EU negotiated an investment pact with China late last year, despite pleas from the incoming Biden administration to delay the deal (although questions remain about whether the European Parliament will approve it). Moreover, major European countries such as Germany last year rebuffed the Trump administration’s efforts to raise national security concerns about Huawei, China’s 5G giant, which Washington argued will facilitate espionage by Beijing if allowed to help build countries’ cellular networks. Germany instead will buy Huawei equipment while setting up “stringent security requirements” to evaluate 5G gear, according to a government statement.
Last year, Beijing also orchestrated the signing of the 15-nation Regional Comprehensive Economic Partnership in Asia as an alternative to the U.S.-authored Trans-Pacific Partnership (TPP). The new pact, which includes key U.S. allies such as Japan and South Korea, comprises a trade zone that will be bigger than both the USMCA and the EU.
For Biden, the situation is almost a complete reversal of where Washington started when he was former President Barack Obama’s vice president. Through two terms, the Obama administration developed a comprehensive strategy to negotiate broad trade agreements with Europe and its Asian allies, the Transatlantic Trade and Investment Partnership (TTIP) and TPP, respectively. The strategy was to pressure China multilaterally into agreeing to fair trade norms.
“It was a great strategy that didn’t pan out,” Pomper said. “They said, ‘Let’s negotiate TPP, and TTIP with Europe. Then two-thirds of the world economy would have been under the same set of rules, pushing China and forcing them to be much more of a rule-taker than a rule-maker.’”
All that fell apart when the EU balked at TTIP, and the progressive wing of the Democratic Party forced Biden to forswear the TPP, a huge 12-nation agreement intended to pressure China into accepting free trade norms. Meanwhile the Trump administration launched an ill-fated unilateral approach to China, discarding the TPP (though a resistant Congress may have already made it dead letter), and Trump hamstrung the WTO by paralyzing its appellate panel, rendering changes all but impossible.
Now it’s up to Katherine Tai, most recently a mere House Ways and Means Committee staffer, to pick up the pieces of the global trading system—and to take on China.
Katherine Chi Tai’s life story is a classic example of the fast-fading American Dream, or as Biden said in introducing her as his nominee in December, she “embodies a powerful immigrant story of America.”
Tai is the daughter of parents who were born in China and raised in Taiwan, finally relocating to the Washington, D.C., area near Bethesda, Maryland. She grew up well-off, though she also made it to the big time on her own merits. Her father was a researcher at Walter Reed National Military Medical Center in Maryland. Her mother, a scientist, still works at the National Institutes of Health in Bethesda, researching opioid addiction—and Tai enjoyed an elite upbringing and education, graduating from the prestigious Sidwell Friends School, attended by Obama’s daughters and many other progeny of Washington’s best and brightest. Tai was born in Connecticut and graduated from Yale in 1996 with a B.A. in history. An intensely private person, she has kept the names of her husband and family from public view since she was nominated—another notable achievement in gossip-hungry Washington.
And though she’s generally described as soft-spoken, she takes no guff, her admirers say. “Katherine is someone who will not fall for lofty high level talk. She’s going to demand action from Europe,” said Clete Willems, who was Trump’s deputy assistant for international economics and deputy director of the National Economic Council. “I remember her being frustrated that the Europeans weren’t more forward leaning on China. She’s an expert at pushing and at building on alliances, which is what Biden wants.”
Tai accomplished that in two cases she won before the WTO reducing Chinese export quotas on raw materials and rare-earth minerals, which are critical to producing high-tech products such as iPhones. Tai exerted legal pressure by bringing Japan and Mexico in on the first case, and Europe, Canada, and Japan on the other.
In rare public remarks last month before the National Foreign Trade Council, Tai came off as a China hawk in a world that, as she described it, “feels like a more complicated and a more fragile place today than it has at any point in my lifetime.” Giving her predecessor, the relentless China critic Robert Lighthizer, a run for his money, Tai slammed China for having an economy “directed by central planners who are not subject to the pressures of political pluralism, democratic elections, or popular opinion.”
But Tai is also known among friends and work partners for her sense of humor and sociability, sometimes playing the piano for guests at her suburban Washington home or watching favorite old movies, even as she relentlessly turns the conversation back to her favorite subject, trade. “She’s a lot of fun to be around as a person,” said Kelly Ann Shaw, a lawyer who worked in concert with Tai in the House on the Republican side. “She’s always reading something new. She’s a very academic thinker. … You often hear her thinking out loud.”
Tai, who would not speak on the record prior to her confirmation hearings, has spent the last two months relentlessly preparing for her role, calling former U.S. trade representatives going back at least to Mickey Kantor, who was President Bill Clinton’s first-term trade representative nearly three decades ago, for advice. “I’ve talked to her twice on the phone,” Kantor said in a phone interview. “She was nice enough to ask my thoughts about certain things. We probably have a similar approach to China. Fairly rigid but a strong approach to get the Chinese to come to table.”
Paul DeLaney, another Republican trade lawyer who has known Tai since they went to elementary school together at Sidwell and has become a close friend, said she has changed little over the course of her lifetime. “She was always freakishly smart. And so personable, with a strong ability to connect and listen. She pulls disparate groups of ideas together,” he said in a phone interview.
Indeed Tai was, by most accounts, always a star in her field, perhaps more prepared than anyone in U.S. government circles to understand Beijing’s trade manipulations. She lived in China part-time after college, teaching English at Zhongshan University in Guangzhou. After graduating from Harvard Law, she clerked for U.S. District Courts in Washington, D.C., and Maryland, and worked for various prominent law firms.
But by her own account she has never forgotten her origins. In her remarks upon being nominated, she talked of how her “heart swelled with pride” at representing the United States at the WTO in Geneva alongside another first-generation American, trade lawyer Shubha Sastry, whose parents hail from South India. “Two daughters of immigrants,” Tai said. “There to serve, to fight for, and to reflect the nation that had opened doors of hope and opportunity to our families.”
There are some questions about how much sway Tai will have in the administration. Already some European diplomats are encouraged that Biden may seek to resolve the 16-year-old Boeing-Airbus dispute as a gesture for trans-Atlantic amity. “The way it’s developing it’s going to be White House-centric operation,” said former Undersecretary of Commerce Bill Reinsch, a China expert who served in the Clinton administration. “Her job is going to be primarily to implement the policy.”
But Tai is best known within trade circles for firmly asserting her views—albeit “with a smile,” Reinsch noted in a phone interview. She has often carried the day with a winning combination of being relentlessly tough on China’s abuse of forced labor, state subsidies, and intellectual property rights—and also as a progressive who has consistently stood up for the plight of U.S. workers hammered by unfair competition from abroad. That has won her the support of major labor unions as well as Republicans.
“Katherine no doubt will be driven by her progressive principles,” said Nasim Fussell, former chief international trade counsel for the Senate Finance Committee Republicans.
The Democratic left appears to agree. “Katherine Tai’s nomination signals a stark departure from the failed practices of the past,” said AFL-CIO President Richard Trumka in a statement. “The labor movement and other worker advocates have long been denied a seat at the negotiating table.” Other prominent voices from the Democratic progressive wing have expressed confidence that she’ll represent them well. “For too long, our trade policies have prioritized corporate interests at the expense of American workers,” said one such leading voice, Ohio Sen. Sherrod Brown, in a statement. “I am confident that … Katherine Tai will fight to level the playing field for workers.”
Tai played a critical role in securing real improvements for workers in the USMCA agreement in 2018. As an avowed progressive, Tai has also sometimes advocated fighting fire with fire against China, supporting American government subsidies and incentives to reduce U.S. over-reliance on Chinese imports.
Yet the U.S. Chamber of Commerce, typically a supporter of free trade, also backed her nomination. “She possesses policy acumen, negotiating experience, and political savvy which will be invaluable in her role as the president’s principal trade advisor and negotiator,” U.S. Chamber Executive Vice President Myron Brilliant told Foreign Policy in an email. On the Republican side, Sen. Rob Portman of Ohio, who served as U.S. trade representative under President George W. Bush, said he was backing her as well. “I’m pleased that we share concerns about China’s non-market techno-nationalism and the threat it poses to American workers and our economy and security, the problems facing the World Trade Organization, and the need for a comprehensive review of what makes America competitive internationally,” Portman said in an email.
Still, some trade professionals have questioned whether Tai has developed the political skills to accomplish a task that goes well beyond lawyerly confrontations at the WTO. Some trade veterans expressed dismay this week when the Office of the U.S. Trade Representative brought over a large number of congressional staff who they fear may not have the political acumen to close deals.
Tai herself has worked hard in recent years at mastering the political game. “She’s been portrayed as a pure trade wonk, but I don’t think that does her justice,” said a Democrat who worked on trade on the Republican side on Capitol Hill and did not want to be quoted by name.
“When she became chief counsel on the House side I remember her being a little nervous about that, saying, ‘That’s not really my strong suit.’ Because it involves political maneuvering. But she managed the USMCA masterfully, navigating her way through the Trump administration. She was able to do that in such a way that everyone came out of it thinking she was fair-minded.”
