May 24, 2019

Washington Wire: President Signs Congressional Spending Package Requiring China List 3 Exclusions

02/21/2019

President Signs Congressional Spending Package Requiring China List 3 Exclusions  

 
In the recent funding bill signed into law by President Trump on February 15, Congress included language requiring the Office of the U.S. Trade Representative (USTR) to institute an exclusion process for Section 301 tariffs under List 3 within 30 days, including for the 5,745 imported items currently subject to 10 percent tariffs. When implementing the exclusion process for Lists 1 and 2, USTR indicated it would not put into operation an exclusion process for List 3 products if the rate remains at 10 percent. Currently, the 10 percent tariffs on List 3 products is scheduled to increase to 25 percent on March 2nd if no progress is made between the Trump administration and China. Now, however, even if President Trump extends the March 2nd deadline, thereby maintaining the 10 percent tariffs on List 3 products, USTR will still need to establish an exclusion process by the middle of next month. Finally, the funding bill includes an appropriation for no less than $4.55 million for the Commerce Department to pay contractors to review 232 steel and aluminum exclusion requests and requires the agency to submit a report on the 232 exclusions each quarter.

 

 

 
Commerce Submits Section 232 Auto and Auto Parts Report to the White House
 
On Sunday, February 17, the Commerce Department announced it submitted the National Security Section 232 autos and auto parts report to the White House. While details of the report have not been made public, sources expect it to either recommend imposing 20 to 25 percent tariffs on all auto and auto part imports, or applying tariffs to a narrower category of Automated, Connected, Electric and Shared (ACES) vehicles, or 10% tariffs on select autos and parts.
 
These tariffs will also apply on imports coming from Mexico and Canada that exceed quotas outlined in the new NAFTA agreement signed on November 30, 2018. The U.S. can impose tariffs on Mexican car and SUV imports over 2.6 million vehicles and imports of automotive parts over $108 billion. It can also impose tariffs if car and SUV imports from Canada exceed 2.6 million vehicles. The threshold for tariffs on automotive parts coming from Canada is $32.4 billion. Automotive manufacturers and auto supplier organizations have raised significant concern that if Washington imposes tariffs, U.S. parts manufacturers will lose business to lower cost options in Mexico then imported under the new NAFTA. In addition, many industry observers believe auto sales have reached their peak, and increased prices will deter consumers from purchasing new vehicles and delay repairs on their current autos as the cost of after market prices also increases.

 

 

 
Senate Chairman seeks to Reauthorize the Higher Education Act
 
Senator Lamar Alexander (R-TN), Chairman of the Senate Health, Education, Labor and Pensions (HELP) committee, recently stated his intent to renew the Higher Education Act (HEA) during this congressional term. Congress has not fully reauthorized HEA since 2008, making only minor changes when it extended the law in 2013. One Voice strongly applauded this development and is working with leading policymakers in Washington to expand the HEA to treat credentials equally with two and four year degrees and allow Pell Grants for short term skills training.
 
Intending a bipartisan process, Chairman Alexander highlighted additional priorities for HEA renewal, including other provisions strongly supported by One Voice such as a new accountability system measuring colleges’ employment, graduation, and loan repayment rates. One Voice has also endorsed several bipartisan bills focusing on career pathways, supporting community colleges partnering with local industry, and allowing employers to claim up to $5,250 in tax credits for helping employees repay student loans. Senate Committee staff are preparing to put together concepts to include as hearings may begin in the Spring.

 

 

 
Currently Happening within the EPA
 
The EPA recently announced it will miss a March deadline to issue a final rule repealing the Clean Power Plan (CPP) because of the 35-day partial government shutdown. The EPA now plans on finalizing the Affordable Clean Energy (ACE) rule by the end of April or early May. Of importance to One Voice members, the ACE rule will repeal the CPP on grounds that it exceeds the statutory authority provided under section 111 of the Clean Air Act. Rather than imposing restrictions and mandates on existing power plants that are largely out of their control, the ACE rule will focus instead on modifications to existing facilities “within the fence line” of the utility. The EPA estimates saving up to $33 billion in compliance costs by 2030 through repealing the CPP.
 
Recently, an EPA official stated the agency may lock in reductions to nitrogen oxide (NOx) emissions from highway heavy-duty trucks and engines in an upcoming regulation resulting from the EPA’s “Cleaner Truck Initiative.” When announcing the initiative last fall, Acting EPA Administrator Andrew Wheeler suggested the initiative may lead to a reduction in permissible NOx emission levels from truck engines. Sources expect the EPA to propose a new rule soon as the last time it set NOx emissions standards was in 2000. In past statements, the EPA did disclose it wants to have a final rule by the end of 2020. Also, likely sometime in 2020, the California Air Resources Board (CARB) is planning on a new statewide NOx emissions standard. According to CARB staff members, it would lower the NOx ceiling from 0.2 to around 0.015-0.035 gram per brake horsepower-hour.
 
Last week, the EPA published Step 2 of its proposed changes to the definition of Waters of the U.S. (WOTUS) in the Federal Register, restricting federal protections on some waters. Currently under WOTUS, the EPA may consider industrial ditches as “tributaries,” leading to costly maintenance activities, and expensive and time-consuming dredge and fill permits. This proposed change would apply to wetlands not connected to larger waterways or riverbeds that flow only after rainfall. In addition to reducing the number of waterways protected under the Obama-era WOTUS rule, the EPA is still seeking to repeal the rule in its entirety. One Voice has worked with regulators and lawmakers for several years to address concerns about the EPA overreaching beyond what the law intends. The deadline for filing comments on Step 2 is April 15.

 

 

 
REMINDER: OSHA Forms 300A for Calendar Year 2018 Due March 2
 
As mentioned in the last edition of Washington Wire, the Labor Department’s Occupational Safety and Health Administration (OSHA) issued its final rule changing the Obama Administration’s OSHA rule tracking of workplace injuries and illnesses regulation, revoking the requirement for businesses to submit Forms 300 and 301. The final rule did keep in place the annual requirement for businesses to electronically submit a Form 300A (Summary of Work-Related Injuries and Illnesses). Businesses have until March 2 to electronically submit their Form 300As for Calendar Year 2018. Click here to access OSHA’s injury reporting portal.