President-Elect Joe Biden’s trade and economic team will face a variety of China-related issues from day one in office. The next US trade representative will have to grapple with what to do with the Phase One trade agreement and tariffs on some $370 billion worth of Chinese goods. The Commerce secretary will be responsible for implementing export control policy and deciding how to move forward with securing the information and communications technology supply chain, including recent orders banning transactions with Chinese Apps. And the Treasury secretary will be tasked with assessing a slew of sanctions imposed on Chinese officials and entities in response to Hong Kong and Xinjiang, overseeing the securities trading ban on Chinese military-associated firms, and determining what inbound Chinese investment constitutes a national security risk. The list goes on.
Rejuvenating the United States’ economy, competitiveness, and alliance structure are pillars of Biden’s trade and economic agenda, and will underpin his China strategy. The goals and values outlined by Biden’s Build Back Better platform are reflected in the experience of his nominees for US Trade Representative, Treasury Secretary, and Commerce Secretary.
US Trade Representative: Katherine Tai
No nominee underscores how the incoming administration will address China on the trade and economic front better than Katherine Tai, Biden’s nominee for United States Trade Representative. A trade lawyer by training, Tai has extensive experience working on China industrial policy issues, including as USTR’s chief counsel for China trade enforcement. She was responsible for developing and litigating disputes against China at the World Trade Organization (WTO). Tai was successful in leveraging the multilateral trading system and bringing alliances on board to pressure China to change unfair trade practices, including winning a notable case challenging China’s rare earth export quotas with support from Canada, Japan, and the European Union.
Tai also brings valuable experience and relationships on the Hill, which will be essential to advancing the administration’s trade agenda. In her current post as chief trade counsel for House Ways and Means Democrats, she was pivotal in getting the US-Mexico-Canada Agreement over the line with stronger labor and environmental provisions—top priorities of any new trade agreement. However, she may face challenges pursuing a trade agenda with trade promotion authority—which allows USTR to “fast track” new trade agreements through Congress without amendments—to expire July 1 unless there is a push to renew.
Though Republican lawmakers have been reserved in commenting on her nomination so far, Tai is widely respected and has received broad support from industry and labor groups. She is likely to have a smooth confirmation process.
Treasury Department: Janet Yellen
Janet Yellen, Biden’s pick for Treasury secretary, will primarily be tasked with reviving the domestic economy, but will also play an important role in the US-China trade and economic relationship. As former Federal Reserve chair, Yellen engaged with China’s top financial regulators bilaterally and in multilateral fora. Yellen said that, at the time, the Fed viewed China’s currency practices as manipulation, and in 2015, they were concerned about the impact of Chinese currency practices on global financial markets. Despite the concerns, her team was able to maintain a good working relationship with China’s central bank and financial regulators.
Yellen has publicly disagreed with the premise and approach of the Trump administration’s tariffs, but acknowledges that there are real issues that need to be addressed. Government subsidies for Chinese state-owned enterprises and the national security implications of US-China competition in artificial intelligence, 5G, and other technology, are issues she views as having significant consequences for the global economy and that must be addressed delicately. At the same time, Yellen has warned about the risks of technological decoupling.
Deputy Treasury Secretary: Adewale “Wally” Adeyemo
Adewale “Wally” Adeyemo, if confirmed, will be charged with implementing the administration’s economic strategy vis-à-vis China. He has experience working at the intersection of national security and economic policy, having served as Obama’s Deputy National Security Advisor and in senior positions at Treasury. He has represented US interests in bilateral and multilateral settings, including as Obama’s representative to the G7 and G20 and as Treasury’s chief negotiator for the Trans-Pacific Partnership’s provisions on macroeconomic policy.
Adeyemo has expressed concern about the national security implications of US global disengagement and withdrawal from multilateral financial institutions, arguing it has helped fuel China’s disregard for international rules and created opportunities for China to advance strategic economic and geopolitical interests. However, he is optimistic about the United States’ economy, arguing for both expanding trade opportunities for American firms to sell to global consumers, particularly the Asian middle class, and investing domestically to reduce inequality. He has consistently argued that the best defense of multilateralism and the rules-based order is addressing domestic social and economic inequality.
Secretary of Commerce: Gina Raimondo
Biden nominated former venture capitalist and Rhode Island Governor Gina Raimondo for Commerce secretary, filling out his economic team. The Department of Commerce has a wide range of responsibilities that includes helping to negotiate trade agreements, aggregating trade data, enforcing laws to ensure a level playing field for American businesses, and fostering innovation. While Raimondo has extensive experience promoting economic growth and investment, she has less international experience.
The secretary of Commerce played an outsized role in the US-China relationship during the Trump administration, particularly on the technology and national security front. Raimondo is unlikely to assume a similar role in the Biden administration, but her views on the US-China economic relationship are likely shaped by her experience with deindustrialization and the outsourcing of jobs when her father’s watch factory was shuttered—a formative experience she shared in her nomination speech.