November 17, 2018

Washington Wire: Commerce Concludes China 301 Hearings; Tariffs Expected Soon

09/06/2018

Commerce Concludes China 301 Hearings; Tariffs Expected Soon 

At the end of August, the Office of the U.S. Trade Representative conducted six days of hearings on proposed tariffs on over 6,000 products worth $200 billion from China. Over the course of the hearings, nearly 400 companies and trade groups testified about their concerns over the Trump administration’s plan to impose tariffs of as much as 25% on these wide range of Chinese goods. The broad list includes items from finished goods to machinery used to manufacture parts in the U.S. Most of the testimony noted how the rise of global supply chains has left U.S. companies with little options but to rely on materials from foreign countries including China. Now that the hearings have concluded, sources expect the tariffs to take effect by the end of September. Furthermore, the Federal Government intends to utilize Section 301 to restrict some investment and impose export controls to limit the ability of Chinese companies to acquire “industrially significant” technology and may announce the possible imposition of even more tariffs beyond the 6,000 and the previous 1,097 already in place.

 

 

 

 
 Commerce to Allow Steel Tariff Exclusions for Quota Countries
 
The administration recently reversed course and announced it would permit U.S. companies to request an exclusion from the tariffs if they import steel and aluminum from countries with quotas, such as South Korea, Brazil, and Argentina. Accordingly, manufacturers “can apply for product exclusions based on insufficient quantity or quality available from U.S. steel or aluminum producers.” Under these circumstances, “an exclusion from the quota may be granted and no tariff would be owed.” In addition, on September 5, Commerce Secretary Wilbur Ross signed an interim final rule making some changes to the overall exclusion process and addressing many of the concerns raised about the process by One Voice and others.
 
One Voice applauds this decision by the administration to consider the actions these tariffs take on downstream industrial users. Metalworking manufacturers around the country struggle to secure not only tool and die steel on a timely basis at global prices, but also specialty metals from stainless steel to heavy gauge metals.

 

 

 

 
Canada Rejoins NAFTA Talks; Text Due to Congress Sept. 29
 
On August 31, the Trump administration notified Congress of its intention to enter into a new trade agreement with Mexico or a trilateral deal that includes Canada. Under the 2015 Trade Promotion Authority law (TPA), the administration should submit the text of the agreement to Congress by September 30, 2018. Assuming Congress decides the administration complied with TPA, it can fast-track a bill in favor or against the deal, allowing the parties to sign the agreement by the November 29 target date. Regardless of whether the final agreement also includes Canada, it is unlikely the current Congress will vote on a bill to implement the new NAFTA, as that process will likely begin anew in late winter, early spring 2019.
 
While the administration and Mexico continue to hammer out the text of a new agreement, Canadian Foreign Minister Chrystia Freeland has continued talks with U.S. Trade Representative Robert Lighthizer this week. While Minister Freeland would not disclose the substance of these talks, she made a point to mention that Representative Lighthizer has been negotiating in good faith. Some are speculating the sides could reach an agreement in the next week or so, however, significant points remain involving dispute settlement, dairy, and others. Many in Congress have signaled an unwillingness to vote in favor of an agreement if Canada is not included.
 
For a more detailed summary and analysis on the current status of NAFTA negotiations please click here.

 

 

 

 
Waters of the U.S. Takes Effect Again in 26 States
 
In August, South Carolina District Judge David Norton ruled against the Trump administration’s suspension of the 2015 Waters of the United States (WOTUS) Rule. Last February, then EPA Administrator Scott Pruitt issued a suspension rule, delaying WOTUS until 2020 to give the agency time to craft a new rule. In striking down the suspension, the judge noted the regulation failed to provide the public with an adequate notice and comment period. The ruling lifts Pruitt’s suspension action in 26 states, however, the decision does not apply to 24 other states where legal challenges to WOTUS are pending.
 
Currently under WOTUS, EPA may consider industrial ditches as “tributaries,” leading to costly maintenance activities, and expensive and time-consuming dredge and fill permits. The change also affects storm water retention ponds, fire ponds, and on-site impoundments, leading to point source discharge and other permit requirements. The rule opens up thousands of manufacturers, farmers, and other businesses to citizen group lawsuits and lengthy environmental reviews – the median cost for some of these permits is $155,000. Undeterred by this outcome, One Voice will continue to work with the administration to revoke and replace this undue burden on small businesses and farmers.

 

 

 

 
Congress Considering Workforce Funding - Take Action
 
In August, the Senate passed the Fiscal Year (FY) 2019 Labor, Health and Human Services, and Education spending bill funding key workforce training programs at lower levels than set in the House proposal. The Senate legislation maintains current levels of funding for the Perkins Basic State Grant at $1.192 billion and CTE National Programs at $7.4 million. This bill differs from the House’s FY 2019 bill passed out of committee in July, which increases the current level of funding by $102 million and is supported by One Voice, members of the business community and educators. The House and Senate will now negotiate their differences in a Conference and One Voice is asking help from manufacturers to ask their lawmakers to support the House spending levels.
 
Job recruitment, training, and placement, as well as advanced technical education, are critical to the future of manufacturing in America. One Voice just succeeded in helping pass a new Perkins Career and Technical Education authorization bill into law this summer and now we need to make sure those programs have adequate funding. Washington should support job training initiatives and programs that support in-demand jobs such as those in the manufacturing industry.
 
Please click here to contact your Representatives and Senators TODAY and ask them to support the House bill funding levels for Perkins.

 

 

 

 
Manufacturing Communities Legislation Passed Into Law
 
The Made in America Manufacturing Communities Act was recently signed into law as part of the FY 2019 National Defense Authorization Act (NDAA). The provision, previously endorsed by One Voice, allows the Department of Defense to administer funds to designated “Manufacturing Communities” that bolster the nation’s defense and manufacturing competitiveness. One Voice has supported this bill for a number of years and will continue working with the administration to make sure this legislation is successfully implemented and benefits manufacturers across the country.