On The Hill

Trade Update (January 17)

Jan 20, 2021 | SHARE

Boeing-Airbus

On Tuesday (Jan. 12), the French Economic Ministry said new U.S. tariffs imposed on aircraft parts and other products over the Boeing-Airbus were “illegitimate under WTO law.”
French Finance Minister Bruno Le Maire said France has asked the European Commission for a compensation fund due to U.S. tariffs.^[1]
On Thursday (Jan. 14), Director of International Affairs in the European Commission’s Agriculture unit John Clarke said the European Union will urge President-elect Biden to remove or suspend tariffs over the Boeing-Airbus dispute.
Clarke also said a six-month moratorium on sanctions would be a logical and sensible way to promote negotiations.^[2]

U.S. Steel

Steel Industry Groups

On Monday (Jan. 11), the American Iron and Steel Institute and three other steel industry groups urged President-elect Joe Biden to maintain tariffs and quotas on steel.

“Continuation of the tariffs and quotas is essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity,” the industry groups said in a letter.

Biden has not said what he plans to do with the steel tariffs.^[3]

To view the letter to President-elect Biden, click here.

AFL-CIO

On Tuesday (Jan. 12), AFL-CIO President Richard Trumka urged President-elect Joe Biden to maintain tariffs on steel and aluminum until issues with global excess capacity are addressed. He also called for Biden to keep Chinese tariffs while working with allies to pressure China and to pause from negotiating any new trade deals.

“We believe that we ought to hit the pause button for a while on negotiating new trade deals, until major new domestic investments are made in infrastructure and education and training and manufacturing,” Trumka said.

Biden has stated previously that he does not intend to complete new trade agreements until the U.S. has made investments into rebuilding the economy.^[4]

Digital Taxes

On Thursday (Jan. 14), the Office of the U.S. Trade Representative (USTR) announced findings in Section 301 cases on digital service taxes (DST) adopted by the U.K., Austria, and Spain. The report found that the DSTs discriminate against U.S. digital companies, however, USTR did not take any specific actions.^[5]

Biden-Harris

Nominees

This week, President-elect Joe Biden announced the following nominees and appointees:
Shalanda Young, Deputy Director, Office of Management and Budget

Jason Miller, Deputy Director for Management, Office of Management and Budget

William Burns, Director of Central Intelligence Agency

Nadiya Beckwith-Stanley, Special Assistant to the President for Budget and Tax Policy

Sameera Fazili, Deputy Director, National Economic Council

To view a full list of nominees, appointees, and White House staff, click here.

American Rescue Plan

On Thursday (Jan. 14), President-elect Biden announced a $1.9 trillion plan to address the COVID-19 pandemic and stimulate economic recovery. The plan calls for the U.S. to restore global leadership and provide support for international health responses to the COVID-19 pandemic. Additionally, the proposal provides resources for a national vaccination plan, school and business reopening, and direct payments to individuals.

To view a press release on the “American Rescue Plan,” click here.

Ways and Means

New Republican Members

Representatives Carol Miller (R-WV), Kevin Hern (R-OK), and Lloyd Smucker (R-PA) will join the House Ways and Means Committee. Republicans added an extra spot on the committee after picking up seats in the November election. Representatives George Holding (R-NC) and Kenny Marchant (R-TX) served on the committee in the 116th Congress, however, did not seek reelection last year.^[6]

New Chief Trade Counsel

On Thursday (Jan. 14), House Ways and Means Chairman Richard Neal (D-MA) announced Alexandra Whittaker will replace Katherine Tai as Chief Trade Counsel for the Subcommittee on Trade. Tai was nominated by Biden to serve as USTR.

China

Oil Company Ban

On Thursday (Jan. 14), the Commerce Department effectively banned exports to China’s state-owned oil company, China National Overseas Oil Corporation (CNOOC). U.S. companies will have to apply for special permits to export goods to CNOOC.

Commerce cited the role the company had in building artificial islands in the South China Sea as the reason for its actions. A U.S. CNOOC subsidiary operates oil and gas fields in Colorado, Wyoming, and Texas.^[7]

Biden-Harris Administration

On Wednesday (Jan. 13), U.S. Chamber of Commerce Executive Vice President for International and Economic Affairs Myron Brilliant said a high-level Chinese delegation is expected to visit Washington, D.C. to explore areas of cooperation with the Biden administration.

Brilliant also said he has been in contact with incoming members of the Biden administration and Chinese officials.

“I think what I can tell you is that they recognize that the path we’re on is (contrary to) what we all want, which is to find some common ground between China and United States on some of the really tricky global issues, particularly dealing with pandemic relief and climate,” Brilliant said.^[8]

DHS Import Ban

On Wednesday (Jan. 13), the Department of Homeland Security (DHS) announced it will block imports of all cotton and tomatoes from the Xinjiang region of China. The ban is due to evidence the products are made with forced labor of Uighur Muslims. This is the strongest action taken by DHS thus far. Around 85 percent of cotton produced in China comes from Xinjiang.^[9]

5G Security Strategy

On Friday (Jan. 15), the Trump administration released an implementation plan for the administration’s 5G security strategy meant to address Chinese telecom companies. The plan would have the White House National Security and Economic councils lead the 5G strategy.

Additionally, the plan outlines how to facilitate domestic rollout of new technology, probing risks, identifying core security principles, and promoting secure networks globally. The Biden administration is not obligated to follow any initiatives in the plan.^[10]

To view the 5G security strategy, click here.

Interim Rule

On Thursday (Jan. 14), Commerce created an interim rule that could require business transactions to be subject to a new Commerce Department review process if they involve technology companies with ties to a U.S. adversary. China and five other countries are designated as adversaries.

The Commerce Secretary will have 180 days after the review process is requested to permit, block, or impose changes on the deal. The new rule will be published in the Federal Register and remain open for comments for 60 days. Implementation of the rule would occur under the Biden administration.^[11]

USMCA

On Monday (Jan. 11), U.S. Secretary of State Mike Pompeo, Energy Secretary Dan Brouillette, and Commerce Secretary Wilbur Ross wrote a letter to Mexican President Andrés Manuel López Obrador regarding blocked energy permits. They claimed Mexican regulators blocked private sector energy permits in favor of a Mexico’s state-owned energy company and warned the action could be in violation of the U.S. – Mexico – Canada (USMCA) trade deal.

In October 2020, a bipartisan group of 30 lawmakers wrote a letter to President Trump to express similar concerns.^[12]
To view the letter to President López Obrador, click here.

Vietnam Currency Investigation

On Friday (Jan. 15), USTR announced it will not impose tariffs on imports from Vietnam over its Section 301 investigation on currency valuation. However, USTR claimed Vietnam’s practices burden and restrict U.S. commerce.

“Unfair acts, policies and practices that contribute to currency undervaluation harm U.S. workers and businesses, and need to be addressed,” USTR Robert Lighthizer said. “I hope that the United States and Vietnam can find a path for addressing our concerns,” he added.^[13]

Agriculture Trade Advisors

On Thursday (Jan. 14), U.S. Secretary of Agriculture Sonny Perdue and USTR Lighthizer announced the appointment of 67 people to serve on seven agriculture trade advisory committees. The advisors will serve until 2025.

To view a list of members, click here.

References

^[1] Moens, Barbara & Braun Elisa. “France calls new U.S. tariffs ‘illegitimate.” Politico Pro, 12 Jan. 2021.https://link.edgepilot.com/s/5cd64c78/lmN5caHSIE2N9qD4dqPCow?u=https://subscriber.politicopro.com/article/2021/01/france-calls-new-us-tariffs-illegitimate-3986289

^[2] Neslen, Arthur. “Brussels to push for tariff suspension in U.S. trade dispute.” Politico Pro, 14 Jan. 2021.https://link.edgepilot.com/s/d7ba555b/AHEQWdIPrUSvylqGl5AgYA?u=https://subscriber.politicopro.com/article/2021/01/brussels-to-push-for-tariff-suspension-in-us-trade-dispute-2028800

^[3] Palmer, Doug. “Transition 2020: Steel industry pressures Biden to keep Trump’s tariffs in place.” Politico Pro. 11 Jan. 2021.https://link.edgepilot.com/s/854b6bb4/92ponFA650C-R9CoyBVVSw?u=https://subscriber.politicopro.com/article/2021/01/transition-2020-steel-industry-pressures-biden-to-keep-trumps-tariffs-in-place-3986246

^[4] Palmer, Doug. “AFL-CIO chief Trumka urges Biden to take ‘pause’ on new trade” Politico Pro, 12 Jan. 2021.https://link.edgepilot.com/s/f061641d/55TAB7hOSUy1rynjQrI8JQ?u=https://subscriber.politicopro.com/article/2021/01/afl-cio-chief-trumka-urges-biden-take-pause-on-new-trade-deals-3986292

^[5] Palmer, Doug. “USTR says Austria, U.K., Spain digital tax schemes are discriminatory.” Politico Pro, 14 Jan. 2021.https://link.edgepilot.com/s/20ad4bfb/PAqxzUPN2k6gyGSveH0FyA?u=https://subscriber.politicopro.com/article/2021/01/ustr-says-austria-uk-spain-digital-tax-schemes-are-discriminatory-3986352

^[6] Becker, Bernie. “3 Republicans set to join House Ways and Means.” Politico Pro, 14 Jan. 2021.https://link.edgepilot.com/s/480232bd/nzCh6JtGSUGDLTpypwRAFg?u=https://subscriber.politicopro.com/article/2021/01/3-republicans-set-to-join-house-ways-and-means-3986366

^[7] Lefebvre, Ben. “U.S. bans exports to China’s state-owned oil company CNOOC” 14 Jan. 2021. https://link.edgepilot.com/s/9d501d75/ttzMOnwXiEyaeAsG_5mR1Q?u=https://subscriber.politicopro.com/article/2021/01/us-bans-exports-to-chinas-state-owned-oil-company-cnooc-2028640

^[8] Palmer, Doug. “High-level China delegation expected to visit early in Biden administration.” 13 Jan. 2021.https://link.edgepilot.com/s/4825f352/hTbYKjTQ-k2GaznGp4-P5Q?u=https://subscriber.politicopro.com/article/2021/01/high-level-china-delegation-expected-to-visit-early-in-biden-administration-2028456

^[9] Bade, Gavin. “DHS bans all cotton, tomato products from Xinjiang over forced labor conditions.” Politico Pro, 13 Jan. 2021.https://link.edgepilot.com/s/73e55507/ZAnf_rQBCUCDTXJYw77wxw?u=https://subscriber.politicopro.com/article/2021/01/dhs-bans-all-cotton-tomato-products-from-xinjiang-over-forced-labor-conditions-3986325

^[10] Hendel, John. “Trump administration unveils outline for implementing 5G security strategy.” Politico Pro, 15 Jan. 2021.https://link.edgepilot.com/s/b4213cf5/R6clH0h31Uy5EWniB2hDZg?u=https://subscriber.politicopro.com/article/2021/01/trump-administration-unveils-outline-for-implementing-5g-security-strategy-3986398