The Office of the U.S. Trade Representative released three more reports on Digital Services Taxes, covering those in Austria, Spain and the United Kingdom, and finding that each one discriminates against U.S. firms and burdens U.S. commerce. All the countries designed the taxes so that they were more likely to hit American internet giants and not domestic firms. As it did in earlier reports, USTR makes no recommendations about what the government should do to convince these countries not to apply extraterritorial taxes on companies like Facebook or Google, often on revenue rather than profits.
The Office of the U.S. Trade Representative's 2020 Notorious Markets List focused heavily on websites and apps where you can download or stream pirated movies, shows, music and video games, but did continue to express concern about how easy it is to buy something online based on a picture of a legitimate product and then receive a counterfeit good. The agency said in press release that the report “includes for the first time a section addressing the role of Internet platforms in facilitating the importation of counterfeit and pirated goods.”
In a strategic action plan to “confront the full spectrum of Chinese threats” to the homeland, the Department of Homeland Security said it will work with intelligence agencies and the National Security Council to assess to what extent goods produced by forced labor are imported. After that assessment, the report said, the government will discuss what it found with private industry. CBP recently put a withhold release order on all cotton grown in China's Xinjiang region (see 2101130034). The leading trade group for the apparel industry has said there is no cost-effective way to know where cotton in an item of clothing is from when the brand does not control the factory's purchases (see 2009170029). American Apparel and Footwear Association CEO Steve Lamar said Xinjiang cotton could be sent to factories in Bangladesh, Kenya, Ethiopia, Cambodia, Vietnam or Indonesia.
In a week, Sen. Chuck Grassley, R-Iowa, will become the top Republican on the Judiciary Committee, but he will retain a seat on the Finance Committee, and he said he'll still be working on trade issues in 2021. Grassley said that it would “be a lot easier” to pass legislation renewing the Miscellaneous Tariff Bill than to renew the Generalized System of Preferences benefits program, since Democrats have proposed numerous changes to GSP that would make eligibility more difficult for developing countries. “But I believe because the Democrats have tied them together, we won’t get it done until we get some compromise done with them on Generalized [System of] Preferences,” he told International Trade Today during a conference call with reporters Jan. 14.
The Commerce Department released an interim final rule that would require government assent for inputs into certain products if those imports are from Iran, China, Russia, Cuba, Venezuela or North Korea. Several of those countries are already sanctioned; as a practical matter, this rule will target Chinese goods. Commerce proposed the rule in 2019 (see 2001130009).
Incoming Senate Finance Committee Chairman Ron Wyden, D-Ore., told reporters on a Jan. 13 conference call that he's going to work closely with the Joe Biden administration to make sure the rapid response labor mechanism is used against Mexico, and he wants similar provisions to be used with other countries. Wyden, who emphasized unemployment relief, infrastructure, drug pricing, taxes and fighting greenhouse gas emissions ahead of trade, said that he's very impressed with the choice of Katherine Tai for U.S. trade representative, and said he hopes to have a Finance Committee hearing on her nomination “very soon.”
The U.S. Chamber of Commerce said further decoupling from China is certain if China doesn't do more to step up on industrial subsidies, intellectual property rights protection, trade secret theft and other U.S. companies' priorities. Myron Brilliant, head of international affairs for the Chamber, told reporters on a Jan. 13 call that there's not much political space for incoming President Joe Biden to roll back tariffs, even as his campaign was critical of the economic consequences of the trade war.
In a Jan. 12 speech to the National Foreign Trade Council, a business group that promotes free trade, President-elect Joe Biden's choice for U.S. trade representative said “U.S. trade policy must benefit regular Americans, communities and workers.” Katherine Tai added that it “starts with recognizing that people are not just consumers. They are also workers.”
A Republican congresswoman who has been the biggest critic of the Section 232 exclusion process told National Foreign Trade Council webinar listeners that, “I’m hoping for the best under this administration. We’ve suffered a lot under [Section] 232 and 301.” Rep. Jackie Walorski, R-Ind., added that “I can’t wait to see it start unraveling.” Walorski, who claimed Jan. 12 that “we were kind of in this battle” with President Donald Trump over the broadness of the China tariffs, voted against certifying Biden's Electoral College victory last week.
National Foreign Trade Council panelists addressing the future of U.S.-China relations agreed that the political climate won't allow President Joe Biden to reverse the Section 301 tariffs on China, even though they think those tariffs haven't been effective in achieving their goal of changing the competitive playing field with Chinese firms.