Trade Update (October 5)
China Task Force Recommendations
On Wednesday (Sep. 30), the China Task Force (CTF), led by 15 House Republicans and chaired by Rep. Michael McCaul (R-TX), unveiled its recommendations to crack down on China. The recommendations come after a months-long probe into the Chinese Communist Party (CCP) over the origins of the COVID-19 pandemic and problems within the medical supply chain.
The report lays out 83 key findings and makes 430 policy recommendations. According to House Minority Leader Kevin McCarthy (R-CA), two thirds of the recommendations are bipartisan.
McCaul said the report, “is the blueprint for bipartisan action Congress and the Administration can take now to address the greatest national and economic security challenge of this generation.”
The CTF recommendations address issues such as: ideological competition, supply chain security, national security, technology, economics and energy, and competitiveness.
The blueprint calls for securing medical and national security supply chains by boosting U.S. production, completing a bilateral free trade agreement with Taiwan, limiting the Thrift Savings Plan from investing in certain Chinese companies, evaluating whether the CCP crimes against humanity amount to genocide, and providing a safe harbor for Hong Kong refugees. Furthermore, it recommends passing legislation targeted at Chinese trade practices and increasing collaboration with U.S. allies.
Notably, the report said the COVID-19 pandemic exposed the U.S. medical supply chain over-reliance on China, and that this undermines medical and national independence. To address this, the report said the U.S. should develop market-based incentives without imposing sweeping government mandates or controls in order to increase U.S. domestic manufacturing. It recommended changing U.S. tax incentives to relocate key supply chains back to the U.S.
Additionally, it highlighted the need for: a more robust domestic manufacturing capacity, including for advanced semiconductors; investments in biomedical research and development; and the U.S. to secure the critical supply of sensitive and strategic minerals.
To view the report, click here.
This week, the Aluminum Association said it filed antidumping and countervailing duty (AD/CVD) petitions charging that unfairly traded imports of aluminum foil from Armenia, Brazil, Oman, Russia, and Turkey are causing material injury to the domestic industry.
The Aluminum Association said existing unfair trade orders in the U.S have prompted Chinese producers to shift exports of aluminum foil to other foreign markets, which has resulted in producers in those countries exporting their own production to the U.S.
“We continue to see how persistent aluminum overcapacity driven by structural subsidies in China harms the entire sector,” Tom Dobbins, President and CEO of the Aluminum Association, said.
“While domestic aluminum foil producers were able to invest and expand following the initial targeted trade enforcement action against imports from China in 2018, those gains were short lived. As Chinese imports receded from the U.S. market, they were replaced by a surge of unfairly-traded aluminum foil imports that are injuring the U.S. industry,” he added.
To view the Aluminum Association’s press release, click here.
The World Trade Organization (WTO) is set to authorize the European Union (EU) to impose $4 billion worth of retaliatory tariffs against the U.S. for subsidies provided to Boeing.
Previously, the EU had been seeking the right to impose tariffs on up to $12 billion. The U.S. has been imposing tariffs on $7.5 billion worth of European goods in retaliation for the subsidies EU member states provided to Airbus. Additionally, the EU has a right to retaliate against another $4.2 billion in goods due to a separate dispute.
The decision is expected to be made public in the next few weeks.
Canada Softwood Lumber Dispute
On Monday (Sep. 28), Canada accused the U.S. of an unfair delaying tactic in the dispute between the two countries over duties the U.S. imposed on softwood lumber.
Canada made the statement at a meeting of the World Trade Organization’s (WTO) Dispute Settlement Body. Earlier this year, the U.S. announced it was appealing an earlier WTO ruling against the duties that the U.S. has imposed on the lumber since 2017.
In the statement, Canada said the U.S. appeal was surprising because the U.S. has blocked the appointment of new judges to the WTO Appellate Body, disrupting its function. Additionally, the U.S. refused Canada’s offer to enter into a separate arbitration appeals process to resolve the dispute.
“Canada is disappointed that the United States decided to appeal last month’s WTO panel report, which found the countervailing duties against Canada to be inconsistent with the United States’ WTO obligations,” Canadian Trade Minister Mary Ng said. “These duties have caused unjustified harm to Canadian industry and U.S. consumers alike, and are impeding economic recovery on both sides of the border,” she added.
To view the statement by Canada, click here.
To view Ng’s statement, click here.
Supply Chain Executive Order
On Wednesday (Sep. 30), President Trump issued an Executive Order (EO) declaring a “national emergency” to deal with the threat to U.S. security, foreign policy, and economy from its reliance on supplies of critical minerals from foreign adversaries, specifically China.
“Our dependence on one country, the People’s Republic of China (China), for multiple critical minerals is particularly concerning. The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries,” the order said.
To counter the threat, Trump ordered the Secretary of the Interior, in consultation with other agencies, to investigate U.S. undue reliance on critical minerals from foreign adversaries, and to inform the president of the status of that threat.
To view the EO, click here.
President Donald Trump tweeted on Friday (Oct. 2) that he and first lady Melania Trump have tested positive for COVID-19.
“Tonight, @FLOTUS and I tested positive for COVID-19. We will begin our quarantine and recovery process immediately. We will get through this TOGETHER!,” he wrote on twitter.
There are 32 days until the election. The 2020 campaign, at least from Trump’s end, will likely be paused for the time being.
 Zanona, Melanie. “House Republicans release recommendations for China crackdown.” Politico Pro, 30 Sep. 2020. https://link.edgepilot.com/s/d7882d18/_yTUe6Tn0EqikGiOqtAhTA?u=https://subscriber.politicopro.com/article/2020/09/house-republicans-release-recommendations-for-china-crackdown-2002797
 Shalal, Andrea & Hepher, Tim. “WTO backs EU tariffs on $4 billion U.S. goods over Boeing subsidies.” Reuters, 29 Sep. 2020. https://link.edgepilot.com/s/6dff9d4d/_VN4zjxgA0CMP5R9CH4c9A?u=https://www.reuters.com/article/us-wto-aircraft/wto-backs-eu-tariffs-on-4-billion-u-s-goods-over-boeing-subsidies-sources-idUSKBN26K3Q0
 Palmer, Doug. “Canada vents frustration over U.S. appeal in softwood lumber dispute.” Politico Pro, 28 Sep. 2020. https://link.edgepilot.com/s/7818b86c/DcbZMTd9hk_yuA8EWMu9Vg?u=https://subscriber.politicopro.com/article/2020/09/canada-vents-frustration-over-us-tactic-in-softwood-lumber-dispute-2001149