Trade policy cannot exist in a vacuum, nor top-down only. It must equitably take into account those most impacted, and give their voices a seat at the table. Katherine Tai, the former U.S. Trade Representative (USTR) and executive director of the newly formed non-profit advocacy group Coalition for New Trade has been listening to the concerns of business communities large and small, and wants to “put the U.S. back in U.S. trade.”
At the Port of Los Angeles’ May media briefing, Tai joined executive director Gene Seroka for a broad discussion on tariffs, global instability, supply chain disruption and the future of U.S. trade policy. She argued the world is entering a major transition period in global commerce; one that requires rethinking decades-old assumptions about free trade, manufacturing and economic resilience. Through the new organization, Tai is hoping to encourage cross-functional conversations that can help build more inclusive, worker-centered trade policy.
As a trained trade attorney who served as chief trade counsel for the House Ways and Means Committee and also held key roles at USTR focused on trade enforcement and China, she brings a grounded perspective to both the legal and policy sides of global commerce. Here, her insights on today’s most salient topics.
On how geopolitics is impacting the world economy: “People tend to think about energy prices first, but the impacts go much deeper than that. The Strait of Hormuz affects energy, fertilizer, plastics and packaging materials, all of which feed directly into food production, manufacturing and transportation systems. Once those disruptions start spreading, you realize how interconnected everything is. What I’m looking to next is the fact that everybody assumed for a long time that prosperity would lead to peace. Yes today, our world is extremely prosperous in the macro, yet less peaceful. What happens when you don’t have peace? The prospects for prosperity become much dimmer, so the conflict in Iran and in the Middle East are critical.”
On what might happen with tariffs in the coming years: “I think businesses should prepare for a tariff-rich environment for the foreseeable future. The moment the IEEPA tariffs were ruled illegal, the Trump administration moved quickly to different statutory authorities, like Section 122, and launched 76 new Section 301 investigations on 60 different trading partners. The details may change—which countries, which sectors, what tariff rates—but tariffs themselves are likely to remain a major feature of U.S. trade policy. That creates enormous uncertainty for importers, exporters and supply chain operators. It also creates an incredible amount of administrative and bureaucratic headache. It’s a deeply disruptive time, but a good opportunity for everyone directly involved in trade to develop agility and resilience.”
On rules-based trade: “Rules-based trade is still a value worth defending. The issue is whether those rules are still fit for today. We need new rules that will safeguard and protect people in our economy; the parts of this vibrant ecosystem that are critical to our success as a nation and to thriving opportunities for our people.”
On the upcoming Trump-Xi meeting in Beijing: “It’s critically important because the U.S.-China relationship remains the defining economic relationship in the world. China is the world’s largest producer economy, while the United States remains the world’s largest consumer economy. You can likely interpret president Trump’s comment about how children in America have too many dolls to mean we consume too much and probably should produce more. You see this imbalance in how these two large economies relate to each other. I have been hopeful that in high level talks between Washington and Beijing these dynamics might come onto the table. If the U.S. and China can’t establish a clearer framework for managing their economic relationship, that uncertainty affects virtually every country and industry in the world.”
On the current U.S.-China dynamic: “My concern is that when these two leaders come together, the trade and economic relationship conversation slips further into the background and the urgent conversations don’t happen. Policymakers in Beijing are likely regarding the U.S. as the vector of change and chaos, so they’re about holding onto as much of the status quo as possible—the status quo of the free trade era of WTO membership. I see the Chinese defending a system that needs to change.
“Both sides have demonstrated areas where they hold leverage over the other—rare earth minerals in China’s case, advanced semiconductors in the U.S. case. But after you demonstrate leverage, you still need a plan. The world is looking for signs that the two countries can move beyond tactical escalation toward a longer-term framework for coexistence and economic stability.”
On whether manufacturing diversification away from China will continue: “I think that the reordering of the global order may well continue in terms of the shift to Southeast Asia, but I’m tracking the desire to focus on the Western Hemisphere. I wouldn’t exclude the possibility that some of that shift out of China to Southeast Asia would also start to shift into Central and South America. And when you look at some of the investment patterns from the big manufacturers in the world, especially the Chinese manufacturers, you start to see that pattern already taking shape.”
On how supply chain disruption fuels agility: “Take packaging. It’s something you tear through to get to the item you actually want, but it’s so important and highlights how this era of disruption changes things we take for granted. We’re starting to realize all the supply chain, trade implications and decision making along the way that allow us to live in this modern world. So how do big and small businesses alike examine underlying assumptions and really prepare for resilience? I liked the word Gene used—optionality diversification—looking toward the future and trying to figure out how to expand your chances for success in a very volatile world. It’s the difference between short term ‘I’m doing well now’ and navigating tough times to come out the other side to make longer-term decisions later.”
On the Coalition for New Trade’s mission: “We are in the midst of a huge inflection point and transition—or rupture, depending on who you’re talking to—and the Coalition for New Trade is about building a new coalition around the principles of new trade policies and new trade practicalities. This is the right time to be having these conversations economy wide, with our workers, large and small businesses, the ports, our agricultural producers—especially the small ones—the family farmers and ranchers. It’s an opportunity to connect with everyone and ask how trade policy is working for them in the midst of all the uncertainty and insecurity. It’s an opportunity to start putting the pieces together of how we’re going to enact trade going forward, so more Americans, and more of the world, can benefit.”
On why workers need to be at the center of trade policy: “The workers were at the center of what we were doing during the Biden administration, and they remain front and center for us today because workers, especially blue collar workers, have been the ones that have fared the least well in the trade policies of the last 45 years. Entire communities saw manufacturing disappear, and many workers felt left behind by globalization, and a lot of what we see today is the result of that frustration.
“We need a coalition to come together and change the dial of how things are working. It’s an opportunity to reevaluate what was so free about the era of free trade. Free trade actually incurred a lot of costs that we haven’t talked about, and in many ways, today’s trade policy, geopolitics and even our domestic politics is a result of sweeping inconvenient realities under the rug for too long. As a trade policy expert, this tells me we must completely reimagine free trade to create more winners and fewer losers. Trade policy cannot simply focus on efficiency and low prices. It also has to focus on resilience, opportunity and long-term economic stability.”
