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Ambassador Katherine Tai's Remarks at the National Press Club on Supply Chain Resilience

Speaker: United States Trade Representative Katherine Tai

Date: June 15, 2023

Words: 437

https://ustr.gov/about-us/policy-offices/press-office/speeches-and-remarks/2023/june/ambassador-katherine-tais-remarks-national-press-club-supply-chain-resilience

Glossary

1. PRC 중국(People’s Republic of China)

2. UAW 전미자동차노조(United Automobile Workers)

3. General Motors 제너럴모터스

4. Indiana 인디애나주

Script

Let me take a moment to explain how designing a system around efficiency and low costs got us here.

Trusting markets to allocate capital efficiently, we designed trade rules to liberalize as much as possible, under the theory that we were facilitating the creation of a free global marketplace.

We thought a rising tide would lift all boats, believing that this approach could lead to a gradual improvement in labor standards and environmental protection as countries grew wealthier from increased trade flows.

We did not include guardrails to ensure that it would be the case.

The system itself, then, created an incentive for countries to compete by maintaining lower standards, or by lowering their standards even further, as companies sought to minimize costs in pursuit of maximizing efficiency.

This is the race to the bottom, where exploitation is rewarded and high standards are abandoned in order to compete and survive.

When efficiency and low cost are the only motivators, production moves outside our borders.

It becomes increasingly consolidated in one economy—such as the PRC—which manipulates cost structures, controls key industries, and became a dominant supplier for many important goods and technologies.

I recently had an important conversation with UAW President.

He shared how the closure of the General Motors plant in his hometown in Indiana was a vivid illustration of why we must do things differently.

When the plant shut down, people lost their jobs.

They lost their healthcare.

The small businesses that sustain the community closed down, and people started moving away in search of other opportunities.

Those who lost their jobs, if they were fortunate to find new ones, often had to settle for lower wages and worse benefits.

Their children faced an uncertain future.

This is what a race to the bottom looks like.

You can see how the decision to allow artificially low costs and low prices to lead U.S. economic policymaking has made us less secure, less free, and less prosperous.

That is why President Biden’s vision for our future is to build the economy from the bottom up and the middle out, not from the top down.

Today, we are upgrading our roads, bridges, and airports.

Expanding manufacturing here in the United States.

Creating good-paying jobs, including 800,000 manufacturing jobs, many that do not require a college degree.

These are groundbreaking down payments on our nation’s future and our people, and our new story on trade also plays an important part in this effort.

That is why we are focusing on workers, the communities they live in, and the small businesses that sustain them and are sustained by them.