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2 August 2021 Monday

White House Proposal Would Tighten “Buy American” Requirements
On July 28, the Biden administration released a proposed rule to strengthen Buy American requirements under President Biden’s January 25 “Buy America” Executive Order (E.O.). The proposal recommends that the domestic content threshold, the share of a product that must originate in the U.S. in order for it to be considered American-made, immediately increase to 60%. Of note, the Trump administration increased the threshold to 55% from 50% in January 2021. That content threshold would then gradually increase to 65% in 2024 and 75% in 2029, “allowing businesses time to adjust their supply chains to increase the use of American-made components,” according to the White House fact sheet.
This action follows recent moves to adhere to the January order, including the establishment of a Made in America Office in the Office of Management and Budget led by Celeste Drake and the issuance of new waiver guidance that aims to reduce the need for waivers from Made in America laws. The administration’s announcement triggers a 60-day consultation period for stakeholders to weigh in before a final rule is instituted. The Chamber intends to submit comments and will solicit input from members to that end.
The proposal also aims to:
  • Bolster reporting requirements for government contractors to “improve data on the actual U.S. content of goods purchases.” Contractors were previously allowed to self-report whether they satisfied the Buy American criteria;
  • Apply price preferences to select critical products and components identified by the Critical Supply Chain review (E.O. 14017) and the pandemic supply chain strategy (E.O. 14001); and
  • Establish a temporary grace period, deemed a “fallback threshold” until 2029 for companies that meet the current 55% requirement to remain eligible to supply to the federal government if no American competitor meets the new rules.
Notably, Biden administration officials maintain these changes will not impact U.S. government procurement obligations at the World trade Organization (WTO) or under free trade agreements (FTA). Several U.S. trading partners and allies have publicly opposed past U.S. actions to strengthen Buy American requirements, sparking concerns that a stricter U.S. government procurement policy may invite retaliation from those countries, which in some sectors would lead to a disproportionate loss of procurement-related sales abroad by U.S. firms. The Chamber previously issued a Q&A document that provides context on the already extensive scope of “Buy American” rules, which includes a section describing the benefits of the WTO Government Procurement Agreement and U.S. FTA government procurement obligations.
The Chamber shared a statement, which was picked up in multiple media outlets:
“The U.S. Chamber strongly supports federal agencies acquiring goods and services from American companies but believes mandating further increases in procurement thresholds and quotas is inefficient, costly, and counterproductive. In all acquisition matters, the Chamber believes that procurement officials need more flexibility rather than less to ensure they can acquire the products and services necessary to meet the critical missions of the U.S. government. We look forward to providing input to the administration as the notice-and-comment period proceeds.”
For further information or to provide input on the proposal, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
GAO Finds Inconsistencies in China Tariff Exclusion Process
On July 28, the Government Accountability Office (GAO) released a report concluding that Section 301 tariff exemptions on Chinese goods were inconsistently implemented under the last administration. GAO found that, despite having developed a four-step process for exclusion requests, the Office of the U.S. Trade Representative (USTR) did not document the roles and responsibilities for each step in its review process nor many of the internal procedures used in the decision-making for exclusion requests.
As a result, GAO recommended that USTR fully document its internal procedures used to make tariff exclusion and extension decisions, though USTR has yet to determine whether it will resume the Trump-era exclusion process. The Trump administration established the exclusion process for companies seeking to avoid paying a Section 301 tariffs on products and components manufactured in China. A petitioning company was granted an exclusion if it could prove Section 301 tariffs would cause severe economic harm to its business or that a particular product could only be purchased from China. Most exclusions have expired, and USTR is not currently issuing new ones.
Following the report’s release, Senior Vice President for International Policy John Murphy wrote in a tweet: “USTR denied 87% of the 50,000 tariff exclusion requests it received. GAO found ‘inconsistencies’ and a ‘lack of documentation’ in those reviews. Today there’s no way to secure new exclusions from these hefty 301 duties: We badly need a fair, transparent, and expeditious process.”
The Senate-passed “United States Innovation and Competition Act (USICA) of 2021” includes a provision, found in the “Trade Act of 2021” amendment, that would establish a permanent exclusion process whenever Section 301 tariffs are applied (with some exceptions) and reinstate Section 301 exclusions to tariffs imposed on goods from China for entries filed on or before December 31, 2022, with retroactivity in some cases.
For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
USTR Forgoes Tariff Action in Vietnam Currency Probe
On July 23, the Office of the U.S. Trade Representative (USTR) officially announced that no further tariff action is warranted in its Section 301 investigation into Vietnam’s currency practices after the State Bank of Vietnam and the Department of the Treasury reached an agreement to address U.S. concerns about Vietnam’s currency practices. This announcement does not affect the separate Section 301 investigation into Vietnam’s illegally harvested or traded timber. Ambassador Katherine Tai made the following statement on the determination:
“I commend Vietnam for its commitment to addressing U.S. concerns with its currency practices and setting an important example for the Indo-Pacific region. American workers and businesses are stronger when our partners value their currency fairly and compete on a level playing field. Going forward, in coordination with Treasury, we will work together with Vietnam to ensure implementation, and we will continue to examine the currency practices of other major trading partners.”
Executive Vice President and Head of International Affairs Myron Brilliant lauded the news of the U.S.-Vietnam agreement. He cited a July 14 letter led by the Chamber and a coalition of more than 70 industry groups urging USTR not to impose tariffs on Vietnamese imports under both the currency manipulation investigation and the separate illegal timber investigation. In addition to emphasizing the recent removal of Vietnam’s designation as a currency manipulator, the group warned this action could lead to retaliatory tariffs and global supply chain disruptions.
For further information, please contact Executive Director for Southeast Asia John Goyer (jgoyer@uschamber.com) or Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
House Committee Advances Research, Competitiveness Bills
On July 27, the House Science, Space and Technology Committee passed by voice vote the “National Institute of Standards and Technology (NIST) for the Future Act of 2021” and four other research and competitiveness bills. The NIST for the Future Act, which would reauthorize the Commerce Department’s National Institute of Standards and Technology with enhanced funding and programs, took up most of the session as a number of amendments were considered. The “National Science and Technology Strategy Act” and “Regional Innovation Act” would direct the White House Office of Science and Technology Policy to devise a national technology strategy and authorize the creation of a regional technology and innovation hub program, respectively. In June, the committee advanced the “National Science Foundation for the Future Act” and “Department of Energy (DOE) Science for the Future Act,” both of which passed the full House.
These bills, along with the “Ensuring American Global Leadership and Engagement (EAGLE) Act” recently advanced out of the House Committee on Foreign Affairs, are expected to serve as the base for the House’s offering in conference committee negotiations with the Senate-passed “United States Innovation and Competition Act (USICA) of 2021.” Science Committee Chair Eddie Bernice Johnson (D-TX) and Ranking Member Frank Lucas (R-OK) are among the critics of the Senate bill, and they contend it steers the U.S. in a similar direction as China’s industrial policies and duplicates ongoing efforts at U.S. agencies.
Vice President of the U.S. Chamber Technology Engagement Center Jordan Crenshaw sent a letter to committee members in support of the NIST for the Future Act. The letter reads in part: “The Chamber appreciates the Committee’s continued bipartisan efforts to bolster our national research enterprise, including the effort to reauthorize NIST. The NIST for the Future Act would establish innovative programs to support U.S. global competitiveness and makes crucial investments in our future. The Chamber urges the Committee to advance this important legislation.”
The Chamber is continuing to engage with members of Congress on these bills. Member companies are encouraged to share their views and concerns with Chamber staff on these measures.
For further information, please contact Senior Vice President for International Policy John Murphy (jmurphy@uschamber.com).
From the Home Front
Chamber Statement on Senate Bipartisan Infrastructure Deal
On July 28, Senior Vice President of Government Affairs Jack Howard issued the following statement in response to the Senate bipartisan infrastructure deal:
“We applaud the bipartisan group of Senators — led by Senators Portman and Sinema — who worked tirelessly to achieve agreement on this much needed infrastructure proposal. The investment included in this agreement will provide enormous benefits for the American people and the economy. Our nation has been waiting for infrastructure modernization for over a decade, and this is a critical step in the process. We now urge the full Senate to vote yes on the cloture motion to proceed to consideration so infrastructure legislation can be approved before the August recess.”
Chamber Applauds Commerce Department for Investing in America’s Workforce Through New Grant Program
On July 22, U.S. Chamber President and CEO Suzanne Clark issued the following statement:
“With 9.2 million job openings, America’s workforce shortage is a significant threat to the economic resurgence. The U.S. Chamber applauds the Department of Commerce’s historic investment in workforce through the new $3 billion grant program funded by the American Rescue Plan. We appreciate the leadership of Secretary Gina Raimondo, who understands both the connection between economic development and workforce and the importance of partnering with the business community. Building on deep expertise and years of leadership on workforce solutions, including the recently launched America Works initiative, the U.S. Chamber  and the Chamber Foundation are committed to supporting this effort to bolster the economic recovery and fill open jobs.”

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