While the timing of the announcement of the first rapid response mechanism complaint was clearly political, according to the CEO of the Business Coordinating Council of Mexico, that doesn't mean that businesses shouldn't expect a stream of complaints to follow. Sergio Gómez Lora, who was speaking on a Thompson Hine webinar May 12, said that's challenging for companies, because it is the union, not their own actions, that could be the problem, even though it is the company that could face the penalty of a tariff on its exports to the U.S.
Sens. Jerry Moran, R-Kan., and Jeanne Shaheen, D-N.H., asked the U.S. trade representative to lift trade remedies on Canadian softwood lumber, because the cost of framing lumber has quintupled and lumber prices overall are up 300%. "In December of 2020, the average tariff was reduced to 9%. While a reduction in tariffs for some Canadian producers is a step in the right direction, the complete elimination of these tariffs is necessary to provide relief for rising lumber prices. American home buyers, not Canadian lumber producers, are the ones who end up paying the cost of these trade restrictions," they wrote May 12. The USTR told Senate Finance Committee members on May 12 that there are good reasons for the countervailing duties, and an agreement that would allow for more Canadian imports to avoid these kinds of price surges is not one the Canadians have expressed interest in so far.
U.S. Trade Representative Katherine Tai, in her second day of testimony on Capitol Hill, heard again and again from members of Congress who are hearing from companies in their districts that they want Section 301 tariff exclusions back. She heard repeatedly that the 9% countervailing duties on Canadian lumber are making a bad situation worse. And she heard that the Miscellaneous Tariff Bill and Generalized System of Preferences benefits program should be renewed. On each topic, both Democrats and Republicans shared concerns, though on GSP, Republicans only spoke of the cost to importers, while Democrats worried about the effects of GSP on the eligible countries. Tai testified for more than four hours in front of the House Ways and Means Committee on May 13.
Rep. Jared Huffman, D-Calif., and Rep. Garret Graves, R-La., are co-sponsoring the Illegal Fishing and Forced Labor Prevention Act, which would require importers to provide more information on imported fish and shellfish at least 72 hours before entry, and require that all importers have an International Trade Fisheries Permit. It would expand the reach of the Seafood Import Monitoring Program at the National Oceanic and Atmospheric Administration, which currently only covers 13 species particularly vulnerable to overfishing or fraud, to include all species within two years. If a SIMP audit found wrongdoing, the permit would be pulled.
A day after Mexico's Labor Department announced it would require a new union vote at a General Motors plant -- and that it referred the case to state authorities for a criminal investigation -- the Office of the U.S. Trade Representative announced it is asking Mexico to review whether workers at the GM factory in Silao were being denied labor rights. That makes the GM case the first for the new rapid response mechanism, since the Biden administration has not yet decided whether it will pursue the AFL-CIO complaint announced May 10.
U.S. Trade Representative Katherine Tai generally avoided being pinned down on timing as she was asked about rekindling trade negotiations with the United Kingdom and Kenya, the pause on tariffs on European imports, and a solution for steel overcapacity that could make way for the lifting of Section 232 tariffs.
Thea Lee, a former AFL-CIO trade economist and top official for 20 years, will be leading the Department of Labor's Bureau of International Labor Affairs, which is involved in both enforcement of the USMCA labor chapter and in investigating forced labor and the worst forms of child labor. The AFL-CIO reacted to the news of her appointment by saying “there is no better person to help strengthen enforcement of labor standards that increase the power of workers in the U.S. and around the world. She will also help shape policies to end forced labor and egregious worker rights violations throughout global supply chains.” The job is not one that requires Senate confirmation.
The first complaint under a new rapid response mechanism under USMCA, which targets a particular workplace, could take months to resolve, but even if the complaint is found valid, there will be no direct impact on exports from the auto parts factory this year.
Very few businesses testified at a live hearing May 6 on the tariff targets for the United Kingdom, Italy, Spain and Austria, in response to those countries' digital services taxes, but dozens of firms and trade groups submitted comments to the Office of the U.S. Trade Representative.
Uyghur Human Rights Project Board Chair Nury Turkel told the House Foreign Affairs Committee that his nonprofit wants swift passage of the Uyghur Forced Labor Prevention Act, which would create a rebuttable presumption that goods from China's Xinjiang province were made with forced labor. "The 11 current Withhold-release orders (WROs) are a wholly inadequate response to the gravity of the crimes, the harm to American workers whose wages are undercut by forced-labor competition, and the unwitting complicity of American consumers who buy face masks, hair weaves, cotton apparel, and solar panels produced by the forced labor of Muslim Uyghurs," he said in his prepared testimony.