U.S. Chamber of Commerce

International Policy Update

March 11, 2022

U.S. Advances Additional Sanctions on Russia, Aid for Ukraine

Chamber, BusinessEurope Urge Legal Certainty for U.S.-EU Data Flows

USTR, Commerce Seek Input for Indo-Pacific Economic Framework

USTR Requests Comments on USMCA Automotive Rules of Origin

Chamber Supports U.S. Candidacy for Secretary General of the ITU

Pagán Confirmed as Deputy USTR and Ambassador to WTO

From the Home Front

Chamber Urges Focus on Energy, Food, Housing to Combat Historic Inflation

Chamber: We Can’t Fill 11.3 Million Open Jobs Without More Legal Immigration

U.S. Advances Additional Sanctions on Russia, Aid for Ukraine

The United States and its allies have continued to announce punishing sanctions on Russia in response to its invasion of Ukraine, as the Chamber has summarized in recent updates to members. Among the global financial and economic consequences of the Russian invasion of Ukraine and the sanctions on Russia are the following:

On March 8, President Joe Biden announced the U.S. will ban imports of Russian oil, liquefied natural gas (LNG), and coal, thus “targeting the main artery of Russia’s economy,” and adding in remarks, “We will not be part of subsidizing Putin’s war.” This announcement followed several weeks of hesitancy to ban Russian oil and risk raising gas prices. The Executive Order allows deliveries of contracted purchases during a 45-day wind-down period. It also will prohibit new U.S. investment in Russia’s energy sector and ban Americans from financing foreign companies making energy investments in Russia.

U.S. Chamber Senior Vice President for Policy and President of the Global Energy Institute Marty Durbin issued a statement:

“We applaud the administration for banning Russian energy imports. It’s time now for the administration to partner with domestic energy producers to leverage America’s ability to produce more oil and gas and focus on pro-growth policies to benefit our economy and the world’s security.”

Last week, Durbin outlined in a blog post policy changes the Chamber is supporting to increase domestic energy production.

Russia supplies roughly 8% of U.S. imports of oil and refined products, and the U.S. does not import LNG or coal from Russia. The United Kingdom made a similar pledge, aiming to phase out Russian oil imports by year’s end. The European Union also announced moves to cut imports of Russian natural gas by two-thirds by the end of the year.

The Biden administration is weighing imposing sanctions on Russia’s state-owned atomic energy company, Rosatom, which is a major supplier of uranium. The White House is working with U.S. industry to assess the potential impact for domestic nuclear plants. The U.S. imported 16.5% of its uranium from Russia in 2020.

In retaliation to Western sanctions, Putin signed a decree to restrict the export of select products through the end of this year. Oddly, the list includes sophisticated manufactured goods that Russia is ill-suited to produce since sanctions largely cut it off from global supply chains, but it does not include commodities Russia produces (e.g., palladium, titanium, platinum, and nickel) and on whose supply global markets depend.

In addition to the Chamber’s summary of recent actions, members are directed to the United States Treasury’s Office of Foreign Assets Control (OFAC) frequently-updated FAQs for further information on how to comply and better understand U.S. government sanctions and export controls measures. The agency also encourages companies to reach out to the OFAC hotline/feedback account (ofac_feedback@treasury.gov). The Department of Commerce’s Bureau of Industry and Security (BIS) also published resources for companies including compliance guidance, seminar opportunities, and contact information.

Meanwhile, Congress passed $13.6 billion in funding to support Ukraine. The funds will provide aid for refugees, deploy U.S. troops and military equipment to Ukraine’s NATO neighbors, and enforce economic sanctions against Russia.

In terms of sanctions legislation, the House passed a bill that mirrors the Biden administration’s E.O. prohibiting the importation of Russian oil and other energy products. The bill, the “Suspending Energy Imports from Russia Act,” also includes a provision allowing the president to waive the ban if deemed in the national interest. This waiver would be subject to a resolution of disapproval by Congress. The bill also includes language calling on the U.S. Trade Representative (USTR) to begin the process of seeking the Russian Federation’s suspension from the WTO and reauthorizes and amends the Global Magnitsky Act, which imposes sanctions on human rights violators.

President Biden on March 11 called for an end to Permanent Normal Trade Relations (PNTR) with Russia, clearing the way for increased tariffs on Russian imports. The announcement was made in collaboration with G7 and EU leaders and includes bans on the export of luxury goods and import of signature goods from Russia, among other measures. The White House will work with Congress to alter the trade status, which trade leaders in both parties support. The move would come after congressional trade leaders first introduced bipartisan legislation with the same goal but then removed it from the bill banning Russian oil imports. A recent analysis by the Progressive Policy Institute showed that revoking PNTR would have an unusually small impact on Russia, a significant exporter of raw materials, because “America’s ‘non-MFN’ tariffs on natural resources are usually low.”

In terms of humanitarian response, the U.S. Chamber of Commerce Foundation’s Corporate Citizenship Center (CCC) is stepping up to aid efforts for Ukraine. The Foundation often serves as an essential connector between business leaders, government agencies, nonprofits, and humanitarian groups during times of crisis.

Since the conflict in Ukraine began, CCC has activated to liaise between the business community and groups assisting refugees in need, rapidly convening expert advice and providing best practices for donating cash and delivering material support in the conflict zone as well as the diaspora receiving refugees. Businesses are stepping up to provide in-kind donations and have so far committed more than $68 million in financial support.

As U.S. Chamber President and CEO Suzanne Clark stated:

“The Russian attacks on Ukraine and the Ukrainian people are a violation of the core tenets of international law and human rights. We are hearing firsthand from friends and colleagues and seeing with our own eyes how Russia’s invasion is inflicting terrible suffering on the Ukrainian people, and we call for an immediate end to these atrocities. The U.S. Chamber of Commerce and the American business community stand with the people of Ukraine.

“The American business community is here to help. We are heartened to see a remarkable outpouring of support for Ukraine from businesses large and small across the country. Businesses are mobilizing their expertise, capabilities, and resources to help the more than 1 million refugees, as well as Ukrainians who remain in their homes and under threat. And this is just the beginning with many more companies lining up to help.”

The Chamber will continue to monitor developments and engage with the administration and Congress as these policies are implemented. For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com) or Director for International Policy Isabelle Icso (iicso@uschamber.com). On matters related to Ukraine’s humanitarian crisis, please contact U.S. Chamber of Commerce Foundation Senior Vice President Marc DeCourcey (mdecourcey@uschamber.com).

Chamber, BusinessEurope Urge Legal Certainty for U.S.-EU Data Flows

On March 9, the U.S. Chamber and BusinessEurope released a joint statement aiming to present a unified business message to the European Commission and U.S. government on the significance of legal certainty for data flows to companies operating in the United States and the EU:

“Businesses from both sides of the Atlantic operate in a global economy and their continued growth, innovation, and competitiveness depend on unimpeded transfers of data. As recent events have clearly demonstrated, reinforcing our shared connectivity is imperative as we face growing geopolitical and economic threats from other actors that do not share our values.

“The economic importance of data flows is only increasing as our economies embark on a generational transformation towards a more digitally connected and sustainable society. To make such a transition a success, secure data transfers are foundational.

“We call on the European Commission and on the U.S. Administration to swiftly conclude a robust new framework for data transfers, addressing the problems which led to the invalidation of the Privacy Shield, and upholding our shared transatlantic values of privacy and security.

“Finalizing a new agreement will not only provide a legal mechanism that is accessible to small and medium-sized businesses but also will remove growing uncertainty around the role of standard contractual clauses, which are relied upon for the bulk of cross-border data flows. We are confident that a new agreement is within reach that can provide long-term legal certainty and will in turn yield increased innovation, cooperation, and growth across the transatlantic economy.”

For further information, please contact Senior Vice President for Europe Marjorie Chorlins (mchorlins@uschamber.com) or Senior Vice President for International Regulatory Affairs & Antitrust Sean Heather (sheather@uschamber.com).

USTR, Commerce Seek Input for Indo-Pacific Economic Framework

On March 10, the Office of the U.S. Trade Representative (USTR) published a request for comments on the “Fair and Resilient Trade” pillar of the Biden administration’s Indo-Pacific Economic Framework (IPEF) initiative. USTR will lead the trade pillar, which will include commitments on labor, the environment and climate, the digital economy, agriculture, transparency and good regulatory practices, competition policy, and trade facilitation. The agency states in the notice that it seeks comments specifically on “U.S. interests and priorities” in each of those areas “in order to develop U.S. negotiating objectives and positions and identify potential partners.” Notably, USTR added in its notice, “the Administration is not seeking to address tariff barriers.” The deadline for submission is April 11.

The Department of Commerce followed with its own request for comments on the three pillars it will lead: 1) supply chain resilience; 2) infrastructure, clean energy,

and decarbonization; and 3) tax and anti-corruption. Those comments are also due April 11.

The Chamber previously shared business recommendations with administration officials engaged in the development and formulation of IPEF. The recommendations will serve as the basis of the Chamber’s comments to USTR.

On a related note, the Senate Finance Committee will hold a hearing on March 15 on “The Promise and Challenge of Strategic Trade Engagement in the Indo-Pacific Region.” The administration’s IPEF is expected to be the main focus of the hearing, and witnesses include two former administration trade officials and a U.S.-China Economic and Security Commission member.

Chamber members with perspective to share are invited to contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

USTR Requests Comments on USMCA Automotive Rules of Origin

The Chamber plans to submit comments to the Office of the U.S. Trade Representative’s (USTR) in response to its request for public comment “concerning the operation of the United States-Mexico-Canada Agreement (USMCA) with respect to automotive goods, including the implementation and enforcement of the USMCA rules of origin for automotive goods, as well as whether the automotive provisions of the USMCA are relevant in light of technological and production advances.” The comments will guide USTR as it conducts a review of auto trade under USMCA and prepares a report for the Senate Finance Committee and House Ways and Means Committee. Responses are due on March 28.

USMCA’s rules of origin provisions tighten the requirements to claim preferential treatment for automotive goods, including higher thresholds for regional value content, rules to produce core parts in the region, steel and aluminum purchasing requirements, and a labor value content threshold. Both Canada and Mexico oppose the U.S. interpretation of how to apply the regional value content calculations, claiming that USTR’s stricter interpretation is inconsistent with USMCA. They have joined in requesting a dispute settlement panel under the pact.

The Chamber welcomes input on this issue as it prepares comments. Members wishing to express a view should contact Director for International Policy Isabelle Icso (iicso@uschamber.com).

Chamber Supports U.S. Candidacy for Secretary General of the ITU

On March 8, the U.S. Chamber issued the following statement supporting Doreen Bodgan-Martin’s Candidacy for Secretary General of the International Telecommunications Union (ITU):

“The U.S. Chamber of Commerce strongly supports the candidacy of Doreen Bodgan-Martin to become the next Secretary General of the International Telecommunications Union (ITU). During a time of unprecedented developments in telecommunications technology, and as the COVID-19 pandemic has shown, advancing global connectivity has become more critical than ever before so that the world can continue to operate and meet the needs of the 21st century economy.

“Bodgan-Martin’s previous experience as Director of the ITU’s Bureau of Telecommunications Development, her career-long commitment to universal connectivity and resilience, and collaboration with diverse stakeholders and members of states make her an exceptional candidate. We are confident she will continue the positive momentum for global connectivity, economic growth and competitiveness across all sectors of the modern economy.”

For further information, please contact Senior Director for the Center for Global Cooperation Abel Torres (atorres@uschamber.com).

Pagán Confirmed as Deputy USTR and Ambassador to WTO

On March 10, the Senate confirmed María Pagán as Deputy U.S. Trade Representative (USTR) and Ambassador to the World Trade Organization (WTO) in an 80-19 roll-call vote. Pagán was previously Deputy General Counsel at USTR where she gave legal advice about trade negotiations, agreements, and regulations. She has twice served as Acting USTR during presidential administration transitions. USTR shared a congratulatory statement following Pagán’s confirmation.

From the Home Front

Chamber Urges Focus on Energy, Food, Housing to Combat Historic Inflation

On March 10, the Bureau of Labor Statistics released the Consumer Price Index (CPI), which measures the change over time in the price of consumer goods. The new numbers for February 2022 show a 0.8% rise in the cost of goods and services from January, up 7.9% in the past 12 months, with energy, housing, and food seeing the largest increases last month. Following the release of February’s CPI data, Executive Vice President and Chief Policy Officer Neil Bradley released the following statement:

“Yet another report of historic inflation is a stark reminder that this is one of the most pressing economic challenges we face today and for the foreseeable future. With Russia’s invasion of Ukraine adding to the inflationary pressures, it is time for policymakers to focus on what they can do to reduce rising prices. But first, the administration must stop blaming business for rising prices. The data is clear, prices are rising for all types of goods and services, driven by constrained supply and increased demand.

“We urge policymakers to focus on three key areas that have a large impact on family budgets and the overall economy: energy, food, and housing. It’s time now for the administration to partner with domestic energy producers to remove regulatory redtape and make it easier to produce more oil and gas here in America. Congress and the administration should act now to support American farmers in increasing production, to help offset what will be lost in Ukraine and Russia, including by dealing with rising energy costs and potential fertilizer shortages. Finally, over many years housing construction has not kept up with demand. Policymakers need to reduce costs on housing inputs by reducing tariffs and reforming our zoning and permitting laws to make it easier to build new housing where it is needed.”

New findings from MetLife and the U.S. Chamber of Commerce Small Business Index shows soaring concern for inflation from small business owners. This quarter, 85% of small business owners say they are concerned about the impact of inflation on their business, up from 74% last quarter. Two-thirds (67%) have raised prices to cope with inflation pressures. Click here to read the full report.

Additionally, the Chamber released a study yesterday conducted by NERA Economic Consulting showing industrial concentration has been declining, rather than increasing, since 2007. Click here to read more and see the full report here.

Chamber: We Can’t Fill 11.3 Million Open Jobs Without More Legal Immigration

On March 9, a report from the Bureau of Labor Statistics (BLS) revealed there were 11.3 million job openings in January, little changed from 11.4 million the month before. U.S. Chamber Executive Vice President and Chief Policy Officer Neil Bradley stated:

“There are 4.75 million more open jobs today than there are people looking for work. One reason for the shortfall is decreased legal immigration. It is past time for Congress to act to modernize our broken immigration system.

“As a result of COVID and other policy changes, there are one million fewer college educated immigrants in the United States today. We can’t get inflation under control, unclog our supply chains, or fully grow our economy and remain competitive unless we welcome more people into our country to fill these jobs.”

The U.S. Chamber recently joined a diverse group of industries and organizations across the political spectrum in announcing a new coalition, The Alliance for a New Immigration Consensus. The coalition of business, faith, and advocacy leaders is working to build support for bipartisan legislative solutions that provide permanent legal protections and other reforms for Dreamers, TPS recipients, and agricultural workers.

For the latest statistics capturing the current state of the workforce, visit the America Works Data Center. The Data Center is part of America Works, a partnership of the U.S. Chamber and U.S. Chamber Foundation mobilizing industry and government to swiftly address America’s worker shortage crisis by providing research on underlying workforce issues, policy recommendations, and practical workforce solutions for businesses.