March 20, 2019

Washington Wire: White House, EU Working to Deescalate Trade Tensions

07/26/2018

White House, EU Working to Deescalate Trade Tensions  

 
On June 25, the White House and European Union released a joint statement in hopes to deescalate rising trade tensions and temporarily pause any additional retaliatory tariffs. The statement indicates the U.S. will temporarily not impose tariffs on imported autos, vans, SUVs, light trucks, and auto parts from the EU if negotiations progress smoothly. For any broader agreement on tariffs or a Free Trade Agreement, member states must first agree to begin negotiations, signaling some challenges may remain. While the EU may receive a temporary reprieve on autos, the immediate future for tariffs on steel and aluminum remains unclear. The statement said the sides will work together to resolve the steel/aluminum dispute but provides no timeline or framework for concessions by either party. The goal focuses on removing tariffs, non-tariff barriers, and subsidies on non-automotive industrial goods. This development is the first significant positive step towards bringing certainty and relief for millions of manufacturing workers negatively impacted by the tariffs, but many obstacles remain without firm timelines.

 

 

 
Hearings Conducted on Section 232 Auto Tariffs, China Section 301 Tariffs
 
Last week, the U.S. Commerce Department held public hearings on the Trump administration’s proposal of 25 percent tariffs for autos and auto parts. On May 23, citing Section 232 of the Trade Act of 1962, President Trump directed the Department of Commerce to “determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair national security.” Witnesses at the hearing presented data estimating job losses of at least 750,000 and price increases between $455 and $6,875 per vehicle if the tariffs are implemented. However, the Trump administration has indicated the President is threatening tariffs as a bargaining chip to gain better trade deals with the EU, Japan, and China. Sources expect President Trump to reach a decision by the end of August or early September. Tariffs would take effect 15 days after his decision.
 
On the China Section 301 tariffs, this week an interagency panel investigated the ability of U.S. businesses to procure goods in countries other than China. Witnesses before the panel represented various industries including fluoropolymers, solar goods, retail goods, lawnmowers, semiconductors, and wires and cables. Besides differing opinions on the 301 tariffs from witnesses within the solar and wire industries, a majority of witnesses warned of an inability to acquire the necessary amounts of vital goods outside of China. The U.S. Government is accepting applications to exclude an imported Chinese product from the 25% tariffs already in place, however, the form requires U.S. businesses to declare whether that item is available domestically or from a third country other than China.

 

 

 
Senate Passes Technical Education, Perkins Bill
 
On July 23, the Senate unanimously passed the Strengthening Career and Technical Education for the 21st Century Act. The bi-partisan bill, supported by One Voice, updates the Carl D. Perkins Career and Technical Education Act for the first time since 2006. A top priority for One Voice, Section 215 of the bill ensures that the middle grades also have access to CTE funding, an important step in filling the manufacturing workforce pipeline. Similar to the bipartisan version also passed unanimously in the House last summer, the Senate bill eliminates the negotiation process between states and the Education Secretary on how to use federal funds to meet career-training goals. Instead, states will set their own goals for career-training programs without input from the Education Department. However, the bill allows the Secretary to become involved if a state fails to make “meaningful progress toward improving the performance of all career and technical education students.” Under that criteria, the Secretary can withhold federal funds if a state fails to meet 90% of performance goals for two years in a row. With the bill’s passage in the Senate, lawmakers from the House and Senate must now draft a conference version for both chambers to vote on and send to the president for his signature.

 

 

 
President Trump Signs Executive Order on Job Training

 

 On July 19, 2018, President Trump signed an Executive Order to develop a national campaign to raise awareness of the skills crisis, STEM education, and career opportunities in the trades and manufacturing. The plan will seek to coordinate efforts among businesses, unions, non-profits, and governments to implement some of the recommendations made by the White House Task for on Apprenticeship Expansion established in June 2017. At the announcement, several Fortune 100 companies and others pledged to create 3.8 million additional training opportunities for workers, however, it is unclear that this initiative will require new actions and investment beyond the effective programs many in the private sector already have in place.
 
Separate from last year’s Apprenticeship Task Force, this latest initiative creates the President’s Council for the American Worker comprised of federal government officials that will receive advice from the American Workforce Policy Advisory Board, made up of citizens outside government. The Council will terminate after two years and recommend a national strategy for “how the Federal Government can work with private employers, educational institutions, labor unions, other non-profit organizations, and State, territorial, tribal, and local governments to create and promote workforce development strategies that provide evidence-based, affordable education and skills-based training for youth and adults to prepare them for the jobs of today and of the future.”
 
The Executive Order directs the Council to within six months develop the national awareness campaign; create a plan for recognizing companies that demonstrate excellence in workplace education and initiatives; examine current government and private spending; and educate the public about job opportunities following four year degrees vs. other pathways.
 
As manufacturing technology continues to advance, so does the need for highly skilled workers. According to a survey, over 85% of NTMA and PMA members reported job openings with the average One Voice member reporting they currently have roughly four vacancies at their manufacturing plants. Of those, 98% have severe or moderate challenges recruiting qualified employees. Both PMA and NTMA are already the industry leaders in training, skills certification, apprenticeship programs, and attracting women and young people into manufacturing careers. This latest initiative will help bring additional awareness to the efforts manufacturers and many in the private sector are already undertaking to fill the skills gap.

 

 

 
EPA Will Freeze Auto Fuel Efficiency Standards
 
At any moment, the Trump administration is expected to announce significant changes to the nation’s fuel efficiency standards. Sources expect the EPA to abandon plans raising fuel efficiency standards to 50 miles per gallon by 2025 as set by President Obama’s EPA. The Trump administration also signaled its intent to challenge California’s authority to set its own air pollution rules and is preparing for an intense legal battle over this decision.
 
In May, California along with 16 other states and the District of Columbia sued over the Trump administration’s decision to rollback greenhouse gas emission standards for auto model years 2022 – 2025. In their filing, the states argue EPA presented no evidence in its decision to revise the emission standards. In last minute developments, and in anticipation of legal challenges, the EPA may also allow “alternatives” to set standards to allow manufacturers some flexibility. California has an agreement with the federal government to impose its own air pollution rules. A dozen other states follow California’s air pollution rules, representing one-third of the U.S. auto market.

 

 

 
OSHA Still Accepting “Late” Submissions of 300A Forms, OMB Finishes Review of Revised Rule
 
Employers had until July 1, 2018, to submit Form 300A injury reports for calendar year 2017 to OSHA’s Injury Tracking Application (ITA) online portal. While OSHA is still accepting submissions of these forms, the agency will flag any submissions after July 1 as “Late.” Currently it is unclear how OSHA will handle “Late” submissions as the agency’s resources are stretched thin. Please click here to access OSHA’s injury reporting webpage and ITA portal.
 
On July 23, OMB completed its review of OSHA’s revised Improve Tracking of Workplace Injuries and Illnesses rule. Now that OMB has finished its review, OSHA will likely issue a proposed rule in the Federal Register in the coming days. Sources indicate OSHA may only require filing of 300A forms electronically for businesses with more than 250 employees, but the agency is also considering asking for EIN numbers on submissions. Another issue to look out for in the proposed rule is any revisions to the “anti-retaliation” provisions, as the current rule permits OSHA to cite an employer for having policies or procedures that may discourage reporting of work-related injuries or illnesses by its employees.