House Ways and Means Committee Approve GSP, de Minimis Legislation Despite Pushback

Ways and Means concluded markup on a number of new bills (see 2404160029) on April 18, although only one saw support by a substantial number of Democrats. The legislation moving on to a full House vote includes bills aimed at preventing the president from removing “Made in Israel” designations from West Bank-origin products; barring Congolese goods made with child labor and electric vehicles whose batteries contain prohibited imports from the U.S. market; closing an alleged de minimis loophole; and preventing new critical minerals free trade agreements.

In discussions on the GSP legislation, Chairman Jason Smith, R-Mont., argued that program renewals have never included TAA provisions in the past. He said GSP bills were historically bipartisan efforts, and he called the current iteration especially so because it includes new environmental and human rights standards for partner nations.

Rep. Bill Pascrell, D-N.J., said he would be a “new person” in committee meetings moving forward, having lost faith in the proceedings. He called the bipartisanship claims hypocritical, arguing that the bill did not contain any amendments submitted by Democrats.

The committee’s ranking member, Rep. Richard Neal, D-Mass., said that his party was opposing the GSP bill because the Republicans had failed to fulfill Democrats’ “one simple request” on trade adjustment assistance. Smith argued in turn that the request was not simple, but highly partisan.

TAA is necessary to protect workers who may face layoffs as the result of lower trade barriers, many Democrats argued. Neal also said that TAA legislation would be passed “eventually” either way. Most of the members of the “other side” are likely to support a TAA bill anyway, he said. “Mr. Chairman, I’m suggesting to you that you could have had a unanimous bill coming out of this committee, gone to the floor, easily passed,” Neal said. “At least putting us in a position to negotiate with the United States Senate over something we know has to be done: GSP.”

Smith said he would "guarantee" that a TAA bill can’t pass the Ways and Means Committee.

Rep. Earl Blumenauer, D-Ore., also protested that the bill does not contain any provisions preventing gender-based violence or recognizing the public health impacts of environmental protection. And he said he was concerned that they hadn’t studied the impacts of the GSP legislation -- it’s possible China’s access to the program won’t be limited at all, he said. There are simply “too many unknowns,” he said.

Legislation with another popular aim, limiting de minimis imports, also faced controversy during markup. The proposed bill would deny de minimis privilege to any products subject to safeguards or tariffs under sections 201, 232 and 301 of the 1930 Tariff Act. Meanwhile, goods from any countries that are subject to Section 301 tariffs would be required to provide their 10-digit Harmonized Tariff Schedule classification code upon entry. And, finally, the bill included new penalties for de minimis violations beyond forfeiture of the package.

The bill is also intended to help stem the flow of illegal fentanyl into the U.S. through the southern border, Smith said.

“[CBP] has picked up on patterns where importers are lying about what's contained when it is fentanyl precursors,” said Joshua Snead, trade counsel for House Ways and Means' Trade Subcommittee. “But they've been able to identify those patterns and crack down in some cases, they need information like the 10-digit HTS that this bill would require.”

The committee argued over an amendment by Blumenauer that would prevent China from shipping under de minimis at all. Blumenauer argued that the legislation alone didn’t do enough to stop fentanyl from reaching the U.S. Though a vast majority of the fentanyl seized by CBP is stopped while traveling over the southern border, he said, no evidence shows how much fentanyl is actually entering the country and from where -- though much does likely come from China.

"How does the proposal that's been advanced by the majority deal with the problem you've raised?" he asked.

Rep. Drew Ferguson, R-Ga., asked the chair if they committee could revisit the issues raised by Blumenauer in more detail later, saying he saw merit in Blumenauer's positions.

"As I have stated, and as the chairman of the trade committee, Mr. [Adrian] Smiith, has stated, this is just a first step," Smith said. "And there's a lot more to do."