December 7, 2023

Washington Wire: USTR to Accept Comments on 301 Tariffs in Next Step of Review



USTR to Accept Comments on 301 Tariffs in Next Step of Review
The Office of the U.S. Trade Representative (USTR) announced on October 12, that it will solicit comments on the effectiveness of the 25 percent and 7.5 percent Section 301 tariffs on more than 10,000 imported goods from China. USTR will accept stakeholder input to inform its statutorily required four-year review of the tariff actions, which could inform President Biden’s decision on whether to suspend some of the tariffs. 
In a Federal Register notice, USTR said it is seeking “public comments on the effectiveness of the actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.” It also wants feedback on “other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation," as well as on the effects of the tariffs on the economy, consumers, workers, domestic manufacturing, technology, small businesses, and supply chains.
The public docket for filing comments will open on November 15, 2022, and will close on January 17, 2023. 



Senators Offer Trade Amendments to Defense Policy Bill
Consideration of the annual National Defense Authorization Act has begun in the Senate, with several Senators offering numerous trade-related proposals as amendments. While no votes on the fiscal year 2023 NDAA will occur until after the midterm elections, close to 1,000 amendments have already been offered by Senators hoping to include legislation that has yet to be approved by Congress as stand-alone bills. 
One Voice is working with Senators on the legislation, including an amendment to transfer review authority of Section 232 national security tariffs from the Commerce Department to the Pentagon. Senator Pat Toomey (R-PA) is calling for the change in response to the 25 percent tariffs on steel and 10 percent on aluminum imported from our national security allies, which many believe the Commerce Department imposed over the objections of defense officials.
Sens. Chris Coons (D-DE) and Todd Young (R-IN) offered an updated version of their “Countering Economic Coercion Act of 2022,” which would allow the president to modify duties or tariff-rate quotas on a U.S. trading partner if the country were being targeted economically by a foreign adversary. The amendment would, however, disallow the president from applying the new authority to antidumping or countervailing duties. In addition, the amendment would provide authority to modify duties and tariff-rate quotas only on articles eligible under the Generalized System of Preferences, and would require the president to consult with Congress before exercising such authority.
A proposal by Sens. Ben Ray Lujan (D-NM) and Lindsey Graham (R-SC) aimed at strengthening U.S. supply chains would establish an “Office of Manufacturing Security and Resilience” at the Commerce Department to help promote U.S. leadership concerning critical industries and certain supply chains. 
An amendment proposed by Sens. John Cornyn (R-TX) and Tom Carper (D-DE) would direct USTR, in consultation with other agencies, to develop a “strategy for how the United States will work with the governments of Canada and Mexico to improve the resiliency of North American supply chains,” including via the U.S.-Mexico-Canada Agreement.
Senator Pat Toomey also offered his 301 exclusion language as an amendment, directing USTR to restart a Section 301 tariff-exclusion process within ninety days. Toomey last offered the language as a “motion to instruct” directing Senate conferees to include provisions for restarting an exclusion process as part of legislation that became the CHIPS and Science Act. The MTI was agreed to in the Senate by a vote of 53-43. 



Joint Employer Comment Period Extended
On October 14, 2022, the National Labor Relations Board announced that they extended for 30 days the deadline to comment on the recently issued proposed rule regarding who is a joint employer under the National Labor Relations Act. Comments are now due on December 7, 2022. 
The proposed rule, published on September 7, 2022, would replace the Trump-issued standard that shielded companies from shared liability for unfair labor practices and responsibility for bargaining with a union, which took effect in April 2020. 
The proposed rule would expand the factors that can establish a joint employment relationship to include indirect and unexercised control over the terms and conditions of a job. Employers would be considered joint employers if they co-determine “essential terms and conditions of employment,” such as scheduling, wages, and benefits.
The NLRB’s action could have a significant impact on businesses that utilize temporary staffing agencies. One Voice is working with the Coalition for a Democratic Workplace on the rule and will file comments raising concern over the impact on smaller employers. 



New Buy American Threshold in Effect Beginning October 25
The updated thresholds for the federal government purchasing domestic content under the Buy American Act (BAA) officially go into effect next week. The changes to the BAA due to Biden’s Executive Order 14005 on “Ensuring the Future is Made in America by All of America’s Workers,” increases the threshold from 55% to 60% on October 25, 2022.
On March 7, 2022, the Biden administration finalized a rule amending the Federal Acquisition Regulation (FAR) BAA provisions to increase the domestic content threshold requirements for products purchased by the federal government. The rule increases the domestic content threshold over a several-year period from the current 55%. Following the first increase this month to 60%, the threshold will next increase to 65% in 2024 and then to 75% in 2029. 
The domestic content thresholds set by the rule will not apply to end products or construction materials that consist wholly or predominantly of iron or steel (or a combination of both). These items will continue to be classified as domestic under BAA only if the cost of foreign iron and steel comprises less than 5% of the overall cost of all components used. 
Through 2023, a fallback threshold is available where agencies can use the current 55% threshold in instances where there are no end products or construction materials that meet the new domestic content threshold, or such products are of unreasonable cost Exceptions to the fallback threshold include construction materials or end items that consist wholly or predominantly of iron or steel or a combination of both or commercially available off-the-shelf (COTS) items.
A framework is established in the rule for higher price preferences to be applied to end products and construction materials that are determined to be “critical or made up of critical components.” A definitive list of these critical items and components will be established in further rulemaking. 



Deadline Set for Secondary NAAQS Reviews
A federal court has agreed to a deal between the Environmental Protection Agency (EPA) and the Center for Biological Diversity (CBD) and the Center for Environmental Health over EPA's failure to review the secondary national ambient air quality standards (NAAQS) for nitrogen oxides (NOx), sulfur oxides (SOx) and particulate matter (PM) within a statutory five-year timeframe. The consent decree entered on October 12 by the U.S. District Court for the Northern District of California, was first proposed by the EPA in July. Under the agreement, the EPA must issue a proposal to either retain or tighten the secondary standards for NOx, SOx, and PM by February 9, 2024, and issue a final rule by December 10, 2024. 
The secondary standard for NOx is set at 53 parts per billion (ppb) of nitrogen dioxide (NO2) annually, the same level it has been at since 1971. The SOx secondary standard stands at 0.5 parts per million (ppm) of sulfur dioxide (SO2) over three hours, a level also set in 1971. The secondary annual PM2.5 standard now stands at 15 micrograms per cubic meter (ug/m3), and the secondary daily PM2.5 standard at 35 ug/m3. The secondary daily limit for larger "coarse" PM, or PM10, stands at 150 ug/m3.
New secondary standards for SOx and NOx were due in 2017, while new secondary standards for PM were due in 2018.