Members of the Senate Finance Committee and the House Ways and Means Committee who spoke at the first meeting of that conference committee to find a compromise China competition package sounded more combative than cooperative.
The Biden administration's approach to changing Section 301 tariffs is "a work in progress," said Sarah Bianchi, a deputy U.S. trade representative, while at a May 11 National Council of Textile Organizations conference. Her comments, which avoided directly answering a question of whether the administration position is that tariffs on apparel are not strategic, came a day after President Joe Biden told reporters that administration officials are discussing whether any Section 301 tariffs should be lowered or removed, "and no decision has been made on it."
CBP is ready for the June start date of the Uyghur Forced Labor Prevention Act, John Leonard, deputy executive assistant commissioner of the CBP Office of Trade told a textile conference audience. However, Leonard acknowledged that CBP won't have identified factories outside of the Xinjiang Uyghur Autonomous Region that employ Uyghurs or members of other persecuted groups by the start of enforcement. Those goods are also supposed to be blocked under the UFLPA.
Jon Huntsman Jr., a former U.S. ambassador to China and Russia, told the U.S. Chamber of Commerce that the current administration has not found a strategy on how to deal with China's economic abuses. He said intellectual property theft has grown to a trillion-dollar problem, and there's a need to address the distortions caused by Chinese industrial subsidies and state-owned enterprises. "If we don't define that agenda, nobody else will," Huntsman said.
Senators said that officials from the Office of the U.S. Trade Representative failed to consult properly before a proposal to make changes to the TRIPS Agreement regarding coronavirus vaccines was released, and that the agency's approach needs to change. Senate Finance Committee Chairman Ron Wyden, D-Ore., and ranking member Mike Crapo, R-Idaho, led the letter, which said: "Administrations of both parties have struggled to comply with the terms Congress has provided to ensure its views are reflected in our trade policy. Accordingly, we request that you take steps to ensure Congress is a full partner in the Administration’s ongoing trade negotiations, regardless of whether the Administration believes any eventual agreement from such negotiations will require formal Congressional approval. To that end, the Office of the United States Trade Representative... must provide Congress with timely, substantive briefings on negotiations and share all U.S. negotiating texts before the Administration commits the United States to a particular negotiating position or outcome."
The Uyghur Forced Labor Prevention Act and the likelihood that the EU will pass a due diligence directive requiring disclosure of forced labor risk for large companies are changing the paradigm of supply chain visibility, a top Labor Department official said during a webinar on human rights in global supply chains. Thea Lee, a long-time union official and now deputy undersecretary for international affairs in the Bureau of International Labor Affairs, said, "I do think that we are in a new era, and it will behoove most companies to start taking these steps to be able to have the eyes into their supply chain whether they are directly impacted right now by the EU directive or whether they are selling goods into the United States."
Sidley lawyer Ted Murphy says he doesn't expect a review of Section 301 tariffs to lead to a policy change on the tariffs, which cover about $300 billion worth of Chinese imports annually. He said that even though a review of the tariffs has to evaluate how effective the actions have been, and has to analyze how the tariffs have affected consumers, "if it ultimately concludes that the additional duties have been only mildly effective and/or have had a negative impact on U.S. interests (businesses and/or consumers), there is no requirement that the USTR take any action. As a result, we do not think that this effort is likely to present a meaningful opportunity for change." Murphy wrote those sentences in bold, for emphasis. Still, he said it is possible, given the messages from some corners of the administration that goods such as bicycles or apparel should not be facing higher tariffs, that "additional duties on certain non-strategic consumer goods may be lifted."
When the Biden administration announced that the U.S. would roll back 25% tariffs on Ukrainian steel for one year, following the U.K. and the EU, there was no pushback from steel interests, and praise from Senate Finance Committee Chairman Ron Wyden, D-Ore.. He issued a statement that said, "As Ukraine continues to valiantly fend off Russia's brutal invasion, it is important that the United States do everything it can to support the Ukrainian economy. Removing the Section 232 tariffs is an appropriate and welcome move from the Biden Administration that makes clear our primary concern is with China's overcapacity, not the people of Ukraine."
Commerce Secretary Gina Raimondo said that the Section 232 25% tariffs on Ukrainian steel will be temporarily lifted. "For steel mills to continue as an economic lifeline for the people of Ukraine, they must be able to export their steel," she said. "Today’s announcement is a signal to the Ukrainian people that we are committed to helping them thrive in the face of Putin’s aggression, and that their work will create a stronger Ukraine, both today and in the future." The tariff reprieve will last one year.
Legislation from Senate Foreign Relations Chairman Bob Menendez, D-N.J., would have the State and Commerce departments report to Congress on how each is working with allies to secure supply chains for semiconductor manufacturing and advanced packaging, large capacity batteries, pharmaceuticals and active ingredients for those drugs, and critical minerals. The bill, whose text was published May 6, also directs the administration to develop common standards for transparent, trusted and sustainable supply chains and to end reliance on China for these goods. About 80% of critical mineral processing is in China and China is dominant in active ingredients for pills.