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Former Senate Finance Staffer Says Section 232 Reform Unlikely 'Any Time Soon'

The Trump administration's use of tariffs on steel and aluminum, China tensions and the threat of tariffs on French products in retaliation for digital taxes have prompted constituents to lobby on trade like never before, said Nasim Fussell, a Holland & Knight partner who recently left her position as chief international trade counsel for the Senate Finance Committee. That constituent interest elevated trade for some senators who had not been hearing from constituents in the past.

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Senate Finance Committee Chairman Chuck Grassley, R-Iowa, Fussell's old boss, wanted to give Congress more of a say in Section 232 tariffs, the section of the law used to levy 25% tariffs on steel from around the world. There were two bills introduced that would have done so, both with Democrats and Republicans on board. But a bill was never brought to a vote in his committee, and Fussell thinks that won't change “any time soon.”

Despite the bipartisan interest, it was very difficult to garner that broader bipartisan support that would be necessary to get something through committee, she said. In some states, she said, politicians hear from both those hurt by tariffs and those protected from foreign competition: “That puts members in a tough policy spot.” The steel industry, in particular, is effective in “getting through to members of Congress,” she added. Fussell spoke about the power of the chief executive and Congress in shaping trade policy, during the virtual American Association of Exporters and Importers conference on Aug. 25.

Kelly Ann Shaw, a partner at Hogan Lovells and former deputy assistant for international economic affairs in the White House, said she agrees with Fussell that reversing delegation on trade is quite difficult. “It’s really hard to put the genie back in the bottle,” she said. She thinks that Trump will not be the last president to use Section 232 creatively, and said she thinks a future administration will use it for climate-change related goals.

Fussell said that if Joe Biden takes office in 2021, trade will continue to be hot in Congress, and she predicted that fast track renewal, which is needed by July 1, 2021, “is going to be the most difficult one yet.”