AIR Airbus SE

By Yuka Hayashi 

WASHINGTON -- President Biden's pick for United States Trade Representative said she would accelerate negotiations with the European Union to resolve a longstanding dispute over commercial-aircraft subsidies, citing the fight's negative impact across several industries.

Speaking at her confirmation hearing Thursday before the Senate Finance Committee, Katherine Tai, a veteran government trade lawyer, said the 16-year-old dispute over how governments subsidize Boeing Co. and Airbus SE has led to counter-tariffs -- sanctioned by the World Trade Organization -- on food and beverage products, causing "disruption" and "pain."

"At the core of this...is the need for the U.S. and the EU to come together to figure out an answer," Ms. Tai said. "I would very much be interested in figuring out how to land this particular plane because it has been going on for a very long time."

Restaurant and beverage industries have been pushing for a solution to the aircraft dispute, which has heaped pressure on businesses already struggling with the Covid-19 pandemic. The Trump administration imposed tariffs on $7.5 billion worth of European wine and food items such as cheese and olives in late 2019. The EU hit back with levies on U.S. whiskey, nuts and tobacco.

The EU's trade commissioner, Vladis Dombrovskis, called for a mutual suspension of tariffs in the aircraft dispute this month.

Ms. Tai is expected to receive Senate confirmation as she enjoys support from lawmakers from both parties, as well as from business groups and labor unions.

Ms. Tai has spent much of her career in the government, first as a lawyer for the Office of the U.S. Trade Representative, then as a congressional staff member. If confirmed, she would be the first Asian-American and the first woman of color to serve in the position.

Asked if she would consider lifting steel and aluminum tariffs imposed by former President Donald Trump on America's allies, Ms. Tai suggested a simple and immediate elimination of the duties is unlikely, saying they should be dealt with as part of a broad policy to address global oversupply of the metals.

Mr. Trump in 2018 imposed tariffs on about $50 billion of imported steel and aluminum, calling the global oversupply of metals a "threat to national security." The duties hit allies such as the EU and Japan, not just China.

"We have to acknowledge that we have overall a very significant global marketplace problem in the steel and aluminum that is driven primarily by China's overcapacity," Ms. Tai told lawmakers. "What we are going to need...is an effective solution that looks at a whole slew of policy tools to address the problem."

Ms. Tai said tariffs are a "legitimate tool in the trade toolbox."

Biden administration officials have said they would review all tariffs and other trade policies introduced by Mr. Trump. Trade experts say that rather than eliminating tariffs already in place, the administration is likely to use them as leverage to win concessions from trading partners.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

(END) Dow Jones Newswires

February 25, 2021 14:54 ET (19:54 GMT)

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