U.S. Chamber of Commerce

International Policy Update

November 5, 2021

U.S., EU Strike Deal on Sec. 232 Tariffs on Steel and Aluminum

Tai Endorses Brown-Portman AD/CVD Bill

Chamber Supports Nominee for Chief IP Negotiator

Chamber Comments on Proposed Buy American Act Amendments

Business Groups Write to Commerce on Semiconductor Supply Chain Review

U.S., EU Strike Deal on Sec. 232 Tariffs on Steel and Aluminum

On October 31, the U.S. and the European Union announced agreement on a tariff-rate quota (TRQ) system to settle the trade dispute stemming from the U.S. Section 232 tariffs on steel and aluminum imports first imposed in 2018. The U.S. and EU also agreed to suspend the World Trade Organization (WTO) dispute settlement proceedings related to the Section 232 tariff action and the EU’s retaliatory tariffs against U.S. exports. Furthermore, the two partners committed to negotiate a global arrangement to address the effects of high-carbon steel and aluminum production and to cooperate on non-market excess capacity in the steel and aluminum sectors.

U.S. Chamber Executive Vice President and Head of International Affairs Myron Brilliant commented:

“The deal announced today offers some relief for American manufacturers suffering from soaring steel prices and shortages, but further action is needed. The EU’s move to suspend its retaliatory duties on American exports such as Bourbon, motorcycles, cosmetics and motorboats is welcome news for U.S. workers and companies.

“When these tariffs were imposed in 2018, the Chamber warned they ‘would directly harm American manufacturers, provoke widespread retaliation from our trading partners, and leave virtually untouched the true problem of Chinese steel and aluminum overcapacity.’ All of that came to pass. These tariffs hurt 50 American workers for every one they helped. We should learn from this experience.

“Meanwhile, Section 232 tariffs and quotas remain in place on imports from many other countries. The U.S. should drop the unfounded charge that metal imports from the U.K., Japan, Korea, and other close allies represent a threat to our national security — and drop the tariffs and quotas as well.”

The U.S. announced on November 1 that it is holding consultations with the United Kingdom and Japan on the Section 232 tariffs and ways the countries can work together to address overcapacity in the steel and aluminum markets. Other countries are quietly doing the same.

Under the agreement with the EU, the U.S. will replace the existing 25% tariff on steel and 10% tariff on aluminum with TRQ levels based on a historical baseline of EU steel and aluminum import volumes between 2015-2017. These TRQ levels are divided into 54 separate quotas on steel and 16 on aluminum and further divided among the 27 EU member states. Any imports entering the U.S. above-quota amount will be subject to the Section 232 tariffs. The quotas fill on a quarterly basis, with a limited carry over of unfilled quotas.

Other key points of the agreement, which takes effect on January 1, 2022, include:

The EU’s retaliatory duties on U.S. exports will be terminated on January 1, and the announced duty escalation scheduled for December 1 will not take place.

U.S. Trade Representative Katherine Tai and Secretary of Commerce Gina Raimondo released statements lauding the agreement and the relief it will provide for American industries and workers. Ambassador Tai’s statement highlighted the agreement’s language on confronting China and fighting climate change, though further details on U.S.-EU cooperation in those areas will need to be worked out. Her statement reads in part:

“With this dispute behind us, we are in a stronger position to address global overcapacity from China with an enhanced enforcement mechanism to prevent leakage of Chinese steel and aluminum into the U.S. market. And the deal is a significant win on one of President Biden’s top priorities – fighting climate change.”

For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).

Tai Endorses Brown-Portman AD/CVD Bill

This week, U.S. Trade Representative (USTR) Katherine Tai endorsed legislation put forth by Senators Sherrod Brown (D-OH) and Rob Portman (R-OH), the “Eliminating Global Market Distortions to Protect American Jobs Act,” in an address to the American Iron and Steel Institute (AISI) and Steel Manufacturers Association (SMA) General Meeting. During her remarks, just two days after the U.S. and EU announced a steel and aluminum tariff arrangement related to the Section 232 trade dispute, Ambassador Tai discussed the current global overcapacity in steel and said the Biden administration will engage with China on its non-market oriented policies while being prepared to “deploy all tools and explore the development of new ones” to protect U.S. workers and industries from unfair competition.

The Portman-Brown legislation, supporters contend, would serve as a new tool to strengthen anti-dumping and countervailing duty (AD/CVD) laws and allow the government to respond more quickly as foreign firms — particularly Chinese firms, according to the bill’s supporters — shift production from country to country to evade the duties. However, a number of Chamber members have expressed concerns about the bill, particularly amid reports that a version may be included in an end-of-year legislative package.

While support for international efforts to address overcapacity in sectors such as steel and aluminum is strong, Chinese imports are already subject to approximately 200 AD/CVD orders as well as other tariffs (Section 301 and Section 232). Meanwhile, this bill has not been subject to scrutiny and deliberation in committee in a manner appropriate to a complex, far-reaching measure amending U.S. AD/CVD procedures. Further, some in industry have serious questions about the significant compression of timetables for AD/CVD procedures the bill proposes — which could potentially impede full examination of the facts — as well as the substantial challenges of determining third-country subsidization contemplated in the bill.

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

Chamber Supports Nominee for Chief IP Negotiator

On November 2, Executive Vice President at the Chamber’s Global Innovation Policy Center Tom Quaadman sent a letter to Senate Finance Committee members in support of the nomination of Christopher Wilson to be the Chief Innovation and Intellectual Property Negotiator with the Office of the U.S. Trade Representative (USTR). The letter notes that his keen understanding of the landscape of global intellectual property (IP) protection and long record of public service have prepared him well to advance effective IP protection through bilateral dialogues and free trade negotiations with other countries.

Upon his expected confirmation, Wilson will be the first to serve in the position since its creation in 2015 and will likely play a critical role in working with the U.S. ambassador to the WTO on the negotiations for a waiver from the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement for Covid-19 vaccines. The Chamber recently sent a letter to USTR reiterating industry concerns about those negotiations, warning that such a waiver “would undermine not just longstanding U.S. policy but undercut U.S. led efforts to vaccinate the global community.”

For further information, please contact Senior Director for International Affairs at the Global Innovation Policy Center Robert Grant (rgrant@uschamber.com).

Chamber Comments on Proposed Buy American Act Amendments

The Chamber worked with coalition partners to submit comments on October 28 in response to the Federal Register notice soliciting input on the proposed rule to amend the Federal Acquisition Regulation (FAR) to implement an Executive Order (E.O.) addressing domestic preferences in government procurement. The comments touch on a variety of concerns and assert that “the potential expansion of domestic-sourcing requirements contemplated by the Proposed Rule will negatively impact competition, supplier diversity, supply chain resiliency, and opportunities for small and disadvantaged businesses to participate in government business opportunities.”

The comments were drafted by the Chamber’s Executive Director for Procurement Policy Christian Zur with partners in the Council of Defense and Space Industry Associations (CODSIA), an industry-wide coalition that exists to coalesce positions on procurement regulations and other issues. CODSIA hosts quarterly meetings with the FAR Council and its member associations include the Aerospace Industries Association (AIA), American Council of Engineering Companies (ACEC), Associated General Contractors (AGC), CompTIA, Information Technology Industry Council (ITI), National Defense Industrial Association (NDIA), Professional Services Council (PSC), and the U.S. Chamber of Commerce.

For further information, please contact Senior Manager for Cyber, Intelligence, and Security Jack Overstreet (joverstreet@uschamber.com).

Business Groups Write to Commerce on Semiconductor Supply Chain Review

On November 3, the Chamber joined leading business and technology associations in a letter to Secretary of Commerce Gina Raimondo urging the Department of Commerce to ensure any sensitive data collected as part of the Biden administration’s ongoing supply chain review is adequately protected. The groups highlighted the importance of data collection to develop solutions to ongoing supply chain challenges but noted concerns with the administration’s approach in seeking to collect sensitive data from companies and how the U.S. government intends to use that data.

The letter is in response to Commerce’s Request for Information (RFI) for Risks in the Semiconductor Supply Chain under President Biden’s Executive Order on America’s Supply Chains. The letter reads in part:

“Our members are supportive of the Biden Administration’s interest in addressing bottlenecks in the supply chain that may be contributing to this shortage, including improving transparency and facilitating information flow across the various segments of the supply chain, and we agree that good data is vital for guiding the design of good policy.

“We commend the U.S. Department of Commerce for seeking data-driven solutions to the current challenge through this RFI, and offer the following constructive suggestions on how best to protect and consider the data collected. First, we urge the U.S. Department of Commerce to treat information submitted thereto with the sensitivity and anonymity necessary to avoid jeopardizing the dealings of any given business. Second, much of the information requested is dynamic, with bottlenecks changing on a frequent basis, so we caution that the RFI may not yield information that presents an accurate picture of the semiconductor supply chain. Third, we encourage the U.S. Department of Commerce to consider the nature of this unique challenge and how the information requested through this RFI may unintentionally distort the realities of the semiconductor supply chain. This underscores why the ongoing exchange of information and coordination between government and the private sector is vital.”

For further information, please contact Senior Manager for Cyber, Intelligence, and Security Jack Overstreet (joverstreet@uschamber.com).