European Union Trade Commissioner Valdis Dombrovskis, in a Der Spiegel interview published April 10, said that the EU has offered to lift its retaliatory tariffs in response to 25% tariffs on EU steel and 10% tariffs on EU aluminum, while they try to resolve the overcapacity problem. “We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution,” Dombrovskis said, according to the EU press office in Washington. “This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” he said.
The White House announced it has selected Chris Magnus, the police chief of Tucson, Arizona, and former police chief of Fargo, North Dakota, and Richmond, California, to lead CBP. The April 12 announcement said, “In each of these cities Magnus developed a reputation as a progressive police leader who focused on relationship-building between the police and community, implementing evidence-based best practices, promoting reform, and insisting on police accountability.” It also said that because Tucson is close to the Mexican border, he has extensive experience in addressing immigration issues.”
Two South Korean companies that make lithium-ion batteries in the U.S. have reached a settlement to end a case at the International Trade Commission that had led to an import ban on SK Innovation for theft of trade secrets (see 2102120021). The settlement was announced April 11, which was also the deadline for the White House to say if it would overrule the ITC. If the import ban had remained, SK Innovation had said it would not be able to continue plans for a large battery plant in Georgia, which will supply domestic electric vehicle production at Ford and Volkswagen. LG Energy Solution is in a joint venture with General Motors in Lordstown, Ohio, building a plant to produce vehicle batteries.
The trade policy counsel at a free markets-oriented think tank said that the hike in tariffs on 70% of what we import from China has increased costs on consumers, led to an estimated 300,000 fewer jobs, and didn't achieve its aims. “That might have been worth it if China were making wholesale changes to its commercial policies, but the early indications are not positive,” Clark Packard said during an R Street Institute webinar April 9. Packard said that staffers on Capitol Hill accept his argument that tariffs are damaging to the U.S. economy, but they say that not doing anything to respond to China's quest for economic domination is not an answer.
Seventeen Republican members of the House Ways and Means Committee, led by ranking member Rep. Kevin Brady of Texas, told Treasury Secretary Janet Yellen that they are still “deeply concerned” with various components of the Organization for Economic Cooperation and Development's approach to taxing digital firms' overseas activities. In the April 8 letter, they asked Yellen for a briefing on the administration's goals. Without a clearer principle on how to allocate profits to countries where businesses provide services, they said, “other countries will continue to extract as much revenue as possible from the United States through digital services taxes or otherwise.” They also said they support the steps the Office of the U.S. Trade Representative has taken to pressure countries to repeal their digital services taxes.
A brief sketch of President Joe Biden's budget priorities, released April 9, proposes increasing Commerce Department funding by 28%, or $2.5 billion. A bullet list of where extra funding would go, without line-item details, says the administration would increase hiring at the International Trade Administration, so that it could have sufficient resources “to defend U.S. workers by addressing unfair foreign trade practices and barriers, strengthening enforcement of U.S. trade laws, and enhancing oversight of foreign government compliance with trade agreements.”
Four pro-trade House Democrats joined Rep. Suzan DelBene, D-Wash., recently in introducing a resolution asking the Biden administration to reopen negotiations in Geneva for an Environmental Goods Agreement at the World Trade Organization. DelBene led, joined by Reps. Jimmy Panetta, D-Calif.; Don Beyer, D-Va.; Terri Sewell, D-Ala.; and Ron Kind, D-Wis.
Senate Finance Committee Chairman Ron Wyden, D-Ore., said through a spokesperson that he will continue working with House and Senate colleagues “to reauthorize GSP and pass the new MTB bill as soon as possible.” The bills must originate in the House, since they are revenue bills.
Commerce Secretary Gina Raimondo, speaking at a White House press conference April 7, argued that America's infrastructure needs are broader than roads, bridges and ports, and touted the president's proposal to invest $50 billion in semiconductor manufacturing and research, as well as spending to carry broadband to rural areas. She also argued that spending on elder care will prevent people from having to drop out of the workforce to care for relatives.
Chipmakers and Chip Purchasers Tell Commerce Department More US Production Needed, but Imports Vital
A wide range of companies and trade groups told the Commerce Department that the semiconductor supply is vulnerable because of over-concentration in Taiwan, China and Japan in particular, and because packaging and testing is becoming more concentrated in China. Comments in docket BIS-2021-0011 closed April 5, but some comments were not published until April 6. The comments were sought to flesh out policy to follow an executive order on the semiconductor shortage (see 2103110048).