Crapo Says He Has 'High Hopes' GSP, MTB Renewal Will Be in Ultimate China Package

Sen. Mike Crapo, the top Republican on the Finance Committee, proposed a renewal of the Generalized System of Preferences benefits program through the beginning of 2027, and a Miscellaneous Tariff Bill that covers 1,423 products, and directs the Office of the U.S. Trade Representative to offer exclusions on some products subject to the China tariffs. The USTR would still have discretion on the exclusions. however.

That Trade Act would also require an annual CBP report on seizures of counterfeits, what country they were from, how they arrived, and in what categories. CBP then would be required to increase inspections of imports from the top source countries for counterfeit goods, as identified by the report. The bill also authorizes CBP to share information on suspected violations of intellectual property rights with “any other party with an interest in the merchandise.”

"I have very high hopes that we will keep the Trade Act provisions," Crapo said at the Capitol, in response to a question from International Trade Today. "Remember, it got 91 votes in the Senate. That’s a signal to the House and to the country that this is important. I can tell you, our allies, particularly those around China, those in the South Pacific, and India are very interested in those trade provisions, to help them push back and strengthen themselves against China’s aggressive economic and military policies. And so, I think that the case can be made for this being one of the key parts of our China bill."

When asked if that meant he wants India to regain eligibility under GSP, Crapo said he would like to see that.

House Ways and Means Trade Subcommittee Chairman Earl Blumenauer's version of GSP and MTB renewal are not that far from the Senate versions, though the MTB covers 60 fewer products The House version would renew the program through the end of 2024, and it would add a more stringent environmental protection to the list of eligibility requirements (see 2106170040). However, Blumenauer wants future MTB lists to be narrower. MTB is defended as an aid to manufacturers, but includes tariff waivers on a number of consumer products, including scissors, leather belts, certain shoes, electric rice cookers, certain portable stoves, drip coffee makers, leather basketballs, table saws, certain sports rackets, swim goggles, plastic pet carriers, aquarium plastic plants, nail clippers, tweezers, curtain hardware, steam irons and certain microwave ovens. Blumenauer's bill would end the practice of waiving tariffs on consumer goods.

Products covered by MTB must have no more than $500,000 in annual tariffs in aggregate, and be administrable; otherwise, the only restriction is that no domestic producer or member objects.

While it's not clear that Crapo's argument that GSP is a strategic counterweight to Chinese trade would win the day, Sen. Rob Portman, R-Ohio, suggested an argument that might be more powerful during conference negotiations, given the political environment.

Portman, who was also at a press conference at the Capitol, said he likes the tariff reductions proposed in the bill because they are counter-inflationary. "In other words, it would be positive right now. It would help on the supply chain issues and it would help in terms of inflationary pressures upon the supply side." Portman contrasted that with the Build Back Better Act. That bill, which is still being shaped among Senate Democrats, would extend a generous child tax credit, giving millions more money to spend, and is expected to offer subsidies for buying certain green products, which would also goose demand. "And it’s demand chasing supply right now that’s causing our inflation," Portman said. "Actually, that trade bill would be very helpful."