USTR Tai: Free Trade Agreements Don't Make Sense At This Moment In History

USTR Katherine Tai will say in a "major policy speech" today that traditional free trade agreements, "don't make sense at a moment in history when we are trying to diversify [supply chains] and make them more resilient."

• Tai's speech is the next significant marker in Biden administration policy to reshore supply chains in friendly countries in response to the elevated political risk associated with Ukraine and China.
• Tai: "I hear all the time that because we are not doing traditional trade agreements, we are not doing trade at all. But if we look at what those agreements... they contributed to the very problems we are now trying to address."
• Tai: "...we are working toward a world with a more diverse set of economies producing steel and aluminum, a world where democracies and open markets can flourish..."
• Tai speech reinforces the prevailing view that Secretary of State Antony Blinken's trip to China this week will focus on opening communication channels, rather than any particular set of deliverables.
• Tai's reference to metals suggests an acrimonious multi-year dispute with China and the WTO over tariffs will continue.