December 7, 2023

Washington Wire: Administration Concludes Supply Chain Review


Administration Concludes Supply Chain Review

The Biden administration has concluded its 100-day supply chain review for critical technology and materials, the result of an Executive Order signed by the President in February. The review focused on four key areas: semiconductor manufacturing, high-capacity batteries, medical supplies, and rare earth minerals. On June 8, 2021, the administration released a 250-page report to detail the findings of the review and provide recommendations. 
The report included six broad recommendations for strengthening U.S. supply chains:
  1. Rebuild production and innovation capabilities
  2. Support the development of markets with high road production models, labor standards, and product quality
  3. Leverage the government’s role as a market actor
  4. Strengthen international trade rules, including trade enforcement mechanisms
  5. Work with allies and partners to decrease vulnerabilities in the global supply chains
  6. Partner with industry to take immediate action to address existing shortages
While the review was tasked with examining the four prioritized supply chains, the recommendations aim to rebuild and strengthen the entire U.S. industrial base. The report recommends that Congress enact a Supply Chain Resilience Program at the Department of Commerce to monitor and quickly address supply chain issues within the U.S. economy. Additional recommendations include deploying the Defense Production Act, giving the President the authority to direct industrial production for national defense purposes, to strengthen supply chain resilience and focusing support for sector-based community college partnerships, apprenticeships and on-the-job training in critical industries. 
The report also proposes the development of a comprehensive trade strategy to support supply chain resilience and U.S. competitiveness, including supply chain considerations in the on-going review of America’s trade policy towards China as well as in the examination of other current and future trade agreements. President Biden will also establish a “trade strike force” at the USTR that would identify unfair foreign trade practices that have eroded critical supply chains and suggest trade actions to counter those practices. 
The White House has announced that it is already moving forwards to adopt some of the recommendations in the report to address near-term supply chain disruptions. This 100-day review is separate from another more comprehensive one-year review already underway.



EPA Undoes Trump-Era Science Transparency Regulation
On May 28, 2021, the Environmental Protection Agency issued a final rule to vacate the “Secret Science Rule” finalized by the Trump Administration in January. Formally known as the “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information” rule, the regulation required additional disclosure of the raw data used by regulators when they create both significant new rules and release “influential scientific information.”
The final rule unwinding the regulation formally implements a decision by the United States District Court for the District of Montana in February to vacate the rule. The decision by the court followed a ruling that the agency, under President Donald Trump, violated federal law in making the substantive rule effective immediately upon its publication in the Federal Register, instead of after a customary 30-day waiting period. 



Broad Group of Trade Associations Urge End to 232 Tariffs on Allies
U.S. trade associations representing a wide range of sectors--from manufacturing and agriculture to alcohol and consumer products--released a letter today, June 9th, to President Biden calling for termination of Section 232 steel and aluminum tariffs on U.S. trade allies that have been in place since 2018.  The associations’ letter builds on a letter from 300-plus U.S. manufacturing companies who last month also requested that the Biden administration put an end to these tariffs, which are damaging a wide range of U.S. businesses. PMA and NTMA are leading voices in Washington to lift the steel and aluminum tariffs on our allies while maintaining pressure on China. President Biden is in Europe beginning his week and One Voice is urging his to reach an agreement with our partners to lift the tariffs and address Chinese overcapacity in the metals markets.



U.S. Implements & Suspends DST Tariffs
The Office of the U.S. Trade Representative (USTR) announced on June 2, 2021, the imposition and immediate suspension of retaliatory tariffs on Austria, India, Italy, Spain, Turkey, and the United Kingdom. The imposition of tariffs comes at the conclusion of a year-long Section 301 investigation begun by the previous administration into digital services taxes (DSTs) adopted by each of the six countries. 
In each case, USTR imposed an additional 25% tariff on the import of goods ranging from shellfish to clothing and other textiles. In total, the actions include 219 tariff subheadings with an estimated trade value for 2019 of approximately $2.1 billion. According to estimates by USTR U.S. companies would pay up to $880 million in taxes under the DSTs by these six countries. The 180-day suspension, until November 29, 2021, is intended to give the U.S. time to further negotiate with each country on a wide host of international tax issues. 
In March 2021, USTR terminated Section 301 investigations of four additional proposed DSTs in Brazil, the Czech Republic, the European Union and Indonesia. However, should any of those jurisdictions move to adopt or implement their proposed DSTs, USTR has stated that they would consider implementing new Section 301 investigations.



House Approves STEM Related Bills
The House of Representatives has passed several STEM-related bills aimed at strengthening the STEM talent pipeline and workforce. The five bipartisan bills developed by the Science, Space, and Technology Committee, which were approved by the House on May 18, 2021, include:
  • H.R. 210, the Rural STEM Education Research Act: Supports research regarding STEM education in rural schools as well as research into improving broadband access across the U.S.
  • H.R. 144, the Supporting Early-Career Researchers Act: Establishes a pilot program to award grants to early-career STEM researchers at institutions of higher education
  • H.R. 204, the STEM Opportunities Act: Provides for guidance, data collection, and grants for women, minorities, and other groups historically underrepresented in STEM studies and careers at postsecondary institutions
  • H.R. 2027, the MSI STEM Achievement Act: Supports the increase of STEM education at minority-serving institutions of higher education
  • H.R. 2695, the Combating Sexual Harassment in Science Act: Supports research into sexual harassment and gender harassment in the STEM workforce, including students and trainees
The bills now head to the Senate, where passage is unclear. Supporters of the measures are hoping that they could be included in a larger legislative package, increasing the chance of becoming law.