The Office of the U.S. Trade Representative announced Oct. 21 that the U.S. will not impose tariffs on goods from European countries over digital services taxes, as those countries have reached a settlement with the Treasury Department about the transition from DSTs to a new approach to taxing multinational firms. The agreement covers suspended tariffs on goods from Italy, Spain, France, the United Kingdom and Austria -- all those proposed tariffs will now be terminated, not just suspended.
The Tariff Reform Coalition, which includes trade associations representing major metal consumers such as automakers, boat manufacturers, the beer industry and machinists, as well as exporters hurt by retaliatory tariffs, sent a letter to senators asking them to support the Section 232 tariff reform bill re-introduced this month by Sens. Pat Toomey, R-Pa., and Mark Warner, D-Va. The Oct. 19 letter, signed by 27 trade groups, said that the bill (see 2110050040) would ensure "that all national interests are taken into account prior to the imposition of tariffs or quotas. These interests were not properly weighed in the case of steel and aluminum and our industries are still reeling from the effects of these tariffs.... Invoking national security as a justification to protect a few industries, to the detriment of countless others, sets a bad example for the rest of the world and opens the door for other countries to take similar actions." They noted that if the bill becomes law, and then if Congress does not approve the steel and aluminum tariffs within 75 days, they would be repealed.
An executive with a logistics company with more than 100,000 customers talked about tariffs as a contributor to supply chain strains. So did the owner of a 200-person candy manufacturer, and a board member from the National Association of Home Builders. While tariffs were not the top concern for businesses mentioned at the hearing on how global supply chain kinks are hurting small businesses, companies said lifting them, even temporarily, would ease the pain of high shipping costs.
Senate Democrats would like to increase funding for CBP's Office of Trade by $10 million to better identify and prevent entry of goods made with forced labor, and an additional $10 million for trade enforcement, including the 21st Century Framework initiative, enforcement of safeguard and sections 232 and 301 tariffs, and going after online counterfeiting.
Even with the surge of migrants crossing the Mexican border, the nominee to lead CBP fielded plenty of questions on trade during his appearance in front of the Senate Finance Committee. Chairman Sen. Ron Wyden, D-Ore., told him, "This committee has a special interest in ensuring that CBP’s trade mission doesn’t get short shrift. Enforcing trade laws vigorously and working to stay a step ahead of trade cheats is key to protecting jobs, businesses and innovators in America, and CBP is right at the heart of that challenge. Too often in the past, including during the Trump administration, trade enforcement has been a secondary issue for CBP." He said his committee "is going to continue looking for ways to strengthen our trade enforcement even further."
Amazon is calling for legislation to allow CBP to share information about suspected counterfeiters with platforms and logistics companies, providing examples of how such information sharing worked to stop counterfeiters. In a just-published policy paper, Amazon said it received a tip from CBP about Champion-branded earbud cases, and "immediately quarantined the counterfeiter’s additional inventory in our fulfillment network and terminated their accounts." The tip led to HanesBrands bringing a civil lawsuit against 13 counterfeiters.
Alan Wolff, a former deputy director-general at the World Trade Organization, called on China to join the WTO Pharmaceutical Agreement, play a constructive role in the fisheries negotiations, and lead in restarting the Environmental Goods Agreement.
U.S. Trade Representative Katherine Tai has asked the International Trade Commission to launch an investigation into the effects of goods and services trade on U.S. workers by skill, wage, gender, race and age, and not just through economic or sociological research, but also through roundtable discussions with disadvantaged community members, unions, minority-owned businesses, Historically Black Colleges and Universities, Hispanic Serving Institutions, Tribal Colleges and Universities, civil rights organizaitons and think tanks.
China has retaliated against various countries for political stances, most recently, against Australian wine and barley, and members of Congress would like a more formal approach to reacting to that coercion. So a group of lawmakers introduced the Countering China Economic Coercion Act in the House of Representatives. Rep. Ami Bera, D-Calif., and Rep. Anne Wagner, R-Mo., are the lead co-sponsors, and were joined by two other Republicans and three Democrats. Bera said in an Oct. 15 press release that the bill would "create an interagency taskforce to streamline U.S. tools and mechanisms for deterring and addressing Beijing’s economic coercion and expand cooperation with the private sector as well as U.S. allies and partners on this important matter."
The U.S. Chamber of Commerce, framing the resolution of the Section 232 tariffs as being careful to guard against transshipment of Chinese steel and preventing import surges, is calling for an end to the tariffs on the European Union, Japan and Korea as quickly as possible. The organization put out a brief this week noting that the cost of steel in the U.S is spiking, and said, "a 'worker-centric' trade policy needs to take into account the U.S. workers employed in manufacturing industries that depend on steel as an input. These workers outnumber those in steel production by approximately 45-to-1, and these much larger industries are badly harmed by the higher costs and shortages imposed by tariffs."