June 3, 2023

Washington Wire: ITC Issues Report on Tariffs

03/28/2023

ITC Issues Report on Tariffs

 
The U.S. International Trade Commission (ITC) has released its report stemming from the Congressionally-mandated investigation of the economic impact of the China Section 301 tariffs and the Section 232 tariffs on steel and aluminum. The investigation examined trade, production, and prices in the domestic industries impacted by the tariffs.
 
In the report, the ITC found that while the 232 tariffs reduced imports of foreign steel and aluminum, U.S. importers have borne nearly the full cost of the tariffs as import prices increased at a  one-to-one ratio with the increased tariffs. Additionally, the investigation found that the tariffs had largely "largely negative" impacts on downstream production with the most negatively impacted industries including industrial machinery manufacturing; cutlery and hand tool manufacturing; motor vehicle steering, suspension components, and brake systems; other general purpose machinery; agriculture, mining, and construction manufacturing; and other fabricated metal products.
 
One Voice members, leadership, and coalition partners testified in front of the ITC during a three-day hearing in late July 2022. During testimony, One Voice informed ITC of the harmful impacts of the 232 tariffs on steel consumers and our allies along with the disruption they have created in the U.S. market, and stressed that China should remain an emphasis and focus of trade enforcement actions and not our national security allies. 
 
One Voice continues to voice the importance of the administration acting to reverse the tax on imported steel and aluminum used by NTMA and PMA members. Especially during times of economic uncertainty, artificially inflating the price of raw materials as the 232 tariffs have done reduces cash flow that the business could use now. 

 

 
  
Biden Releases Budget Request
 
President Biden has released his 2024 fiscal year (FY24) budget proposal. The White House first released an outline of the budget request on March 9, 2023, which focused on topline numbers for major programs under the various agencies and outlines of policy proposals.  Additional details including the Congressional Budget Justifications (CBJs), which provide additional information and funding specifics regarding many of the proposals, were then released by the departments and agencies in the following week. 
 
The President’s Budget Request (PBR) for FY24 includes an additional $100.9 million for the Hollings Manufacturing Extension Partnership, to $277 million as well as $98 million to support the existing Manufacturing USA institutes, an increase of $60.3 million, and $21 million to establish a Supply Chain Resiliency Office within the International Trade Administration (ITA). 
 
The request proposes a $43 million increase for the Carl D. Perkins Career and Technical Education Act’s (Perkins V) basic state grant program, a three percent increase over FY23 enacted levels, for a total of $1.47 billion in FY24.  The Administration also included a request for $200 million for the creation of a new competitive grant program or “Career-Connected High Schools,” which would award funding supporting dual enrollment, work-based learning, industry-recognized credentials, and career counseling.
 
The release of the non-binding budget proposal is the first step in the annual appropriations process. Congress will now begin to determine its own funding priorities and develop appropriations packages in the coming weeks and months.  

 

 
EPA Releases Final “Good Neighbor” Rule
 
The Environmental Protection Agency (EPA) has issued a final expanded interstate air pollution rule, imposing requirements to help states meet their Clean Air Act "good neighbor" requirement by managing their emissions from power plants that travel into downwind states. The Cross-State Air Pollution Rule (CSAPR), announced by EPA on March 15, 2023, modifies the existing CSAPR program which is geared toward meeting the 2008 national ambient air quality standard (NAAQS) for ozone, set at 75 parts per billion (ppb), to instead meet the tougher 2015 ozone NAAQS of 70 ppb. 
 
The new rule covers 23 states in total. Power plants in 22 states will be covered under the CSAPR summertime ozone season NOx trading program, starting this summer. California will not participate in the power plant program. In 20 states, the new rule will also set NOx emission rate limits for nine new industry sectors. 
 
The regulated industrial sources are: reciprocating internal combustion engines in pipeline transportation of natural gas; kilns in cement and cement product manufacturing; reheat furnaces in iron and steel mills and ferroalloy manufacturing; furnaces in glass and glass product manufacturing; boilers in iron and steel mills and ferroalloy manufacturing, metal ore mining, basic chemical manufacturing, petroleum and coal products manufacturing, and pulp, paper, and paperboard mills; and combustors and incinerators in solid waste combustors and incinerators.
 
The new emissions limits for manufacturing industries will apply in Arkansas, California, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia, and West Virginia.
 
The final rule will be effective 60 days after it is officially published in the Federal Register. 

 

 

 
  
House Votes to Overturn WOTUS
 
The House of Representatives voted to approve the Congressional Review Act (CRA) resolution to overturn the Biden administration’s Waters of the United States (WOTUS) rule, which officially took effect on Monday, March 20, 2023.  The resolution passed the House on a 227-198 vote on March 9, with nine Democrats joining the GOP to vote in favor of repeal -- while one Republican opposed it.
 
The White House has already issued a statement promising to veto the resolution should it reach Biden’s desk. "The final rule provides clear rules of the road that will help advance infrastructure projects, economic investments, and agricultural activities -- all while protecting water quality," reads a March 6 statement of administration policy (SAP) targeting the WOTUS disapproval resolution, known as H.J. Res. 27. "The rule reestablishes critical protections for the nation's vital water resources by returning to the longstanding 1986 regulations with appropriate updates, exclusions, and streamlining clarifications." The Biden Administration believes that repealing the WOTUS rule would increase uncertainty around the definition of WOTUS by baring the agencies from moving forward with any "substantially similar" rulemaking.
 
The fight over WOTUS in Congress comes as the rule is facing numerous industry and state attempts to block the rule's implementation in the courts. Late on March 19, 2023, a federal court judge in Texas issued a preliminary injunction blocking the rule from taking effect in Texas and Idaho. US District Court Judge Jeffrey Vincent Brown ruled that the WOTUS rule "poses irreparable harm" to residents of Texas and Idaho if the EPA regulation was effective pending the resolution of the States' lawsuit.