December 2, 2020

Washington Wire: President Trump Reinstates Tariffs on Canadian Unwrought Aluminum Imports

08/26/2020

President Trump Reinstates Section 232 Tariffs on Canadian Unwrought Aluminum Imports  

 
On August 6, President Trump announced the reinstatement of Section 232 tariffs of 10 percent on unwrought aluminum imported from Canada effective August 16, 2020. Even though President Trump lifted the tariffs last year and the USMCA went into effect on July 1, the United States preserved the right to apply tariffs if it experiences a spike in imports of steel or aluminum from either Canada or Mexico. In July, One Voice helped draft a letter from the Coalition of American Metal Manufacturers and Users sent to the Trump Administration opposing the re-imposition of Section 232 tariffs on aluminum imports from Canada.
 
The Aluminum Association, Alcoa (the largest U.S. aluminum producer), and virtually the entire domestic aluminum producing and using industry opposed the move. With the reinstatement of the tariffs, One Voice members will face higher input costs and delivery delays. The new tariffs will lead to customers importing a more finished product that does not have tariffs rather than purchase from domestic Tier II or III suppliers who still have higher input costs than their foreign competitors due to government intervention in the markets. In response to the administration’s action, Canada pledged to apply tariffs on $2.7 billion on U.S. aluminum containing goods in September.

 

 

 
FEMA Providing Supplemental Payment Grants to State Unemployment Benefits
 
After negotiations collapsed between the Trump Administration and Congressional Democrats over continuing the $600 increase in state unemployment benefits under a new COVID-19 emergency spending bill, on August 8, President Trump signed an Executive Order making up to $44 billion funds from the Federal Management Agency’s (FEMA) Disaster Relief available to increase state unemployment benefits. States applying for this grant must increase their weekly unemployment benefits by $100 to receive an additional $300 from FEMA.
 
FEMA grants for lost wages supplemental payments will continue until one of these four conditions are met:
 
  1. FEMA has expended $44 billion from the Disaster Relief Fund (DRF).
  2. The DRF balance reaches $25 billion.
  3. Enactment of legislation providing supplemental Federal unemployment compensation, or similar compensation, for unemployed or partially employed individuals due to COVID-19.
  4. The program end date of no later than December 27, 2020.
 
So far, FEMA has approved 30 states to receive this grant. Click Here for more information on this program.
 
It is uncertain whether this Executive Order will help get the ball rolling on a new COVID-19 relief bill that will aid One Voice members during this economic crisis. One Voice continues to actively work with lawmakers to extend the Paycheck Protection Program (PPP) loan and allow manufacturers to apply for a second loan. PMA and NTMA urge Congress to create a long-term low interest government guaranteed loan program that allows manufacturers to use funds for raw materials, capital equipment, and other needs beyond payroll. One Voice is also working to make additional changes to the PPP including allowing the deduction of expenses for those having their loan forgiven. Finally, the associations are lobbying to increase resources for Career and Technical Education and online training, while also working to pass into law the College Transparency Act to inform borrowers about the potential financial burdens of only pursuing a four-year degree.

 

 

 
Labor Department Announces Good Guidance Rule
 
On August 21, the U.S. Department of Labor announced the publication of its “Promoting Regulatory Openness through Good Guidance Rule” (PRO Good Guidance Rule), requiring the agency to use regulatory guidance appropriately and making it transparent and accessible to the public. Under the rule, the Labor Department must provide a notice and comment review period for any guidance it issues involving economic impacts greater than $100 million. In addition, the rule requires the agency create a searchable public database containing all guidance documents and allow the public to petition the Labor Department on issues related to its guidance. Of importance to One Voice members, the rule limits the Labor Department’s use of guidance documents instead of following required procedures under the regulatory process.
 
In February, One Voice met with the White House Office of Management and Budget (OMB) on the Labor Department and EPA’s abusive tendencies of issuing regulatory guidance documents to create unfair new obligations on manufacturers. Guidance documents should help clarify how to comply with existing rules and regulations, not create new ones without a notice and comment period for affected stakeholders.

 

 

 
California Finalizes Agreement with Five Automakers over Emissions Standards
 
On August 17, automakers Ford, Honda, Volkswagen, BMW, and Volvo finalized an agreement with the California Air Resources Board (CARB) to manufacture cars with stronger fuel economy and lower greenhouse gas (GHG) emissions standards than the Trump administration’s Safer and Affordable Fuel Economy (SAFE) rule. The automakers decided to make this agreement with California binding and enforceable because they feared the SAFE rule would compel them to sell different kinds of automobiles in different states. The thirteen other states following California’s emissions standards have also decided to enforce this agreement.
 
Under the terms, the five automakers (about 30 percent of the U.S. auto market) are required to hit a fleetwide average of 51 miles per gallon (mpg) by model year (MY) 2026. While this is a significantly higher standard than the SAFE rule’s 40 mpg by MY 2025, it is looser than the original Obama standard of 54.5 mpg by MY 2025. In addition to increasing mpg, the agreement sets increasing year-over-year stringency standards for GHG emissions. Beginning with MY 2022, the automakers will need to reduce GHG emissions by an average rate 3.7 percent annually. This increasing stringency standard extends through to MY 2026, however, automakers can use advanced technology multiplier credits for 1 percent of the 3.7 percent annual stringency rate. Also important to automakers, CARB agreed to remove a requirement to account for upstream emissions of fuels.
 
Finally, the parties agreed to recognize California’s authority to set its own standards. Last year the Trump administration revoked the federal waiver allowing California to set its own emissions standards. California and twenty-two other states filed a lawsuit against the revocation, which may ultimately be decided by the Supreme Court. However, the issue may become moot if former Vice President Biden wins the election. If elected, sources expect the Biden Administration will scrap the SAFE rule, move to restore the Obama standard, and allow California and other states to set stricter standards.