The Democrats on the House Ways and Means Committee, led by its chairman and trade subcommittee chairman, told CBP that its answers on its enforcement strategy on forced labor “have been insufficient” so far, and they want specifics on what the agency is doing to stop the import of palm oil made with forced labor.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said that the temporary tax break for small brewers, cider makers, vintners and distillers is sure to be renewed as part of the year-end package. Grassley was responding to a question from International Trade Today during a phone call with reporters Dec. 15. Although the tax break is called the Craft Beverage Modernization and Tax Reform Act, it also applies to large producers, but not at the same level of generosity. For example, for breweries that produce fewer than 2 million barrels a year, the tax is $3.50 a barrel on the first 60,000 barrels; that's a 50% discount compared with before the law's passage. For all brewers, the tax went from $18 a barrel to $16 a barrel on the first 6 million barrels produced in a year.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, accused Democrats of holding up renewal of the Generalized System of Preferences benefits program and said it's unjustified, “because it's always been very bipartisan, and for the most part, almost unanimous.” Referring to Democratic proposals to reform GSP, he said Dec. 15 that “some of the things they’re asking to do are legitimate, but we didn’t hear about some of these things until November 27th, and some of them are technical things that it takes a long time to work out.”
Seventy-five House members, led by Rep. Jackie Walorski, R-Ind., Rep. Collin Peterson, D-Minn., Rep. Ron Kind, D-Wis., and Rep. Darin LaHood, R-Ill., are asking U.S. Trade Representative Robert Lighthizer to automatically extend all product exclusions for the China tariffs. Their letter, sent Dec. 11, says that some expiring exclusions cover personal protective gear and equipment that would be used to administer vaccines. “Additionally, extending these exclusions will provide needed certainty for employers and help save jobs,” they wrote. “We recognize that the exclusions were granted in part on the premise that businesses need adequate time to relocate their supply chains out of China. However... [w]ith global travel essentially shut down, it has been difficult, if not impossible, for company representatives to travel to and inspect potential new sites and to build relationships with new partners.”
Although the reduction in the alcohol excise tax for small producers was meant to last two years, the temporary tax cut continues to draw wide support in Washington to make it permanent. The craft brewers and small distilleries, cider-makers and wineries won a one-year renewal at the end of last year, and 125 members of the House wrote to Speaker Nancy Pelosi and Minority Leader Kevin McCarthy to ask that the tax break be extended.
Ambassadors to the World Trade Organization said they're hoping the new Joe Biden administration will line up behind Ngozi Okonjo-Iweala for director-general, and will get serious about finding a way to resuscitate the Appellate Body, though they acknowledged the latter may have to wait for the COVID-19 crisis in America to subside. Ambassadors from Canada, Japan, Singapore, Australia and Switzerland spoke on a webinar Dec. 11 hosted by the Washington International Trade Association.
House Ways and Means Committee Chairman Richard Neal, D-Mass., says that the new administration should prioritize a free trade deal with the European Union following the template of USMCA, saying President Donald Trump's abandonment of serious trade talks with Europe was a “particularly detrimental blunder.”
Chemicals are not among the top imports under the Generalized System of Preferences benefits program -- travel goods, jewelry, car parts, and lamps are -- but chemical distributors are still anxious that the program be renewed before it expires. Eric Byer, CEO of the National Association of Chemical Distributors, said in a phone interview that about 50% of his 250 members benefit from GSP tariff breaks. He said last time GSP expired, it took a couple of months to get reimbursed even after GSP was restored. He gave an example of a small company near Philadelphia that had to pay $250,000 in additional tariffs during the expiration, for a company that only had about 25 employees. Byer said citric acid is imported by many of his members, and if GSP expires, a 6% tariff will be applied to that citric acid coming from Thailand. Erin Getz, coordinator of governmental affairs for NACD, said 110 million pounds annually is imported from Thailand.
President-elect Joe Biden announced Dec. 10 that he's selecting House Ways and Means Committee Chief Trade Counsel Katherine Tai to be the next U.S. trade representative, saying that her deep experience will allow the administration to “harness the power of our trading relationships to help the U.S. dig out of the COVID-induced economic crisis and pursue the President-elect’s vision of a pro-American worker trade strategy.”
Sen. Josh Hawley, a populist Republican from Missouri, has introduced a Generalized System of Preferences bill that would only allow the tariff benefits to be granted when unemployment is below 4% in the U.S. The unemployment rate has been below 4% less than two years of the last 20. This version of GSP would also bar any country that the Department of Labor identifies as a country where there's a problem with forced labor or the worst forms of child labor.