U.S. Trade Representative Katherine Tai heard many bipartisan complaints about the pain of both Section 301 tariffs and Europe's retaliatory tariffs in response to steel tariffs, but stood her ground on both during a hearing in front of a Senate Appropriations subcommittee responsible for funding the Office of the U.S. Trade Representative.
PricewaterhouseCoopers has been cautioning its clients not to get their hopes up about a reversal of sections 232 and 301 tariffs with the new administration, and Scott McCandless, a principal in the firm's tax policy services group, also sought to manage expectations for trade policy action in Congress in 2021. McCandless, speaking to a webinar audience April 27, said that while forced labor is a hot issue right now, and CBP “is on a more active footing” on forced labor, he doesn't believe that legislation that would create a rebuttable presumption of forced labor in Xinjiang is going to pass this year. “I doubt that moves forward,” he said.
A witness at a Senate Finance Committee hearing on China and trade competitiveness told senators that if the Miscellaneous Tariff Bill and his company's Section 301 exclusion aren't granted retroactively, Element Electronics would be forced to move production out of the U.S.
The Tax Foundation, a nonpartisan think tank that advances right of center tax policy, issued a lengthy report how Congress might consider changing the tax code for faster growth, for income distribution, or for reducing the deficit, noting that each change requires balancing trade-offs. For instance, the Foundation says that getting rid of safeguard tariffs on washing machines and solar panels, the Section 232 tariffs on metals, making permanent the pause in Airbus tariffs, and removing and the Section 301 tariffs on $475 billion worth of Chinese imports will mean a reduction in $79.5 billion in revenue next year, though the economists at the think tank estimated that the savings would spur enough economic growth that about $7 billion of that loss would be recovered with other taxes.
U.S. Trade Representative Katherine Tai's conversations with her counterparts from Italy and the Netherlands addressed global overcapacity in steel, according to summaries of the video calls released April 16. The administration has suggested that Section 232 tariffs on aluminum and steel cannot be removed until overcapacity has been addressed, even when the countries subject to those tariffs are not dumping steel or aluminum in their exports to the U.S.
Although the Aluminum Association opposed the imposition of 10% tariffs on imported aluminum in 2018, now the trade group doesn't want those tariffs lifted entirely. The tariffs have already been removed on Canada, the No. 1 source of imported aluminum. “We were not in favor of the drastic move of putting [Section] 232 in” and “we would not be in favor of the drastic move of removing 232 in one fell swoop,” Aluminum Association CEO Tom Dobbins said.
European professors speaking about the future of the trans-Atlantic trade relationship said that while it's logical for democratic, rule-of-law countries to coordinate trade policy against an authoritarian rival, that's easier said than done.
International Trade Today is providing readers with the top stories from April 5-9 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Christopher Kane, partner at Simon Gluck, expressed optimism over a recent U.S. Court of International Trade ruling striking down an extension of President Donald Trump's Section 232 tariffs to aluminum and steel derivatives (see 2104050049). He believes the ruling spells good news for the massive litigation involving more than 3,700 companies challenging the expansion of the Section 301 tariffs on goods from China. Although based on a different law, Kane believes CIT's April 5 ruling demonstrates the court's willingness to hold the president to account over laws and regulations. In the case of the derivatives, the tariff expansion was eliminated because it was imposed after a 105-day period during which the president can impose Section 232 tariffs after receiving a report on the need for the duties from the Commerce Department.
Although many American liquor exports received a reprieve with the lifting of Boeing tariffs in Europe, bourbon and other American whiskeys continue to face a 25% punitive tariff in the European Union and the United Kingdom because of Section 232 tariffs on those countries' steel and aluminum exports. At the time the tariffs were imposed, Sen. Mitch McConnell, R-Ky., was majority leader, so the product choice was considered to create additional pressure on the administration to reverse the action.