On The Hill

Trade Update (December 6)

Dec 6, 2020 | SHARE  
Biden-Harris Transition
The Biden-Harris transition team announced the following economic nominees and appointees this week:
Janet Yellen, Secretary of Treasury
  • Served as the Chair of the Federal Reserve from 2014-2018
  • Served as the Chair of the Council of Economic Advisers
Neera Tanden, Director of the Office of Management and Budget
Wally Adeyemo, Deputy Secretary of Treasury
  • Served as Deputy Director of the National Economic Council under the Obama-Biden administration
  • First Chief of Staff of the Consumer Financial Protection Bureau
Cecilia Rouse, Chair of the Council of Economic Advisers
  • Former member of the Obama-Biden Council of Economic Advisers
Jared Bernstein, Member of the Council of Economic Advisers
  •  Served as Vice-President Biden’s Chief Economist in first years of the Obama-Biden administration
Heather Boushey, Member of the Council of Economic Advisers
Brian Deese, Director of the National Economic Council
  • Former Senior Advisor to President Obama 
  • Served as Deputy Director of the National Economic Council and Deputy Director and Acting Director of Office of Management and Budget during the Obama-Biden administration
To view a full list of the selected nominations, appointments, and White House staff, click here.
2021 House Calendar
This week, House leadership announced the 2021 legislative calendar. The 117th Congress is expected to convene at noon on Jan. 3, 2021.
House Majority Leader Steny Hoyer (D-MD) noted the schedule is always subject to change, especially due to the ongoing COVID-19 pandemic.
“Committee work days may be changed to voting days with sufficient notice. The 2021 schedule seeks to balance voting days, Committee work days, and days for Members to conduct important business in their districts,” Hoyer said in a notice.
To view the calendar, click here.
House Committee Elections
This week, the House of Representatives held elections for committee leadership.
To view all the House Committee Chairs in the 117th Congress, click here.
To view all the House Ranking Members in the 117th Congress, click here.
Senator Mark Kelly
On Wednesday (Dec. 2), Mark Kelly (D-AZ) was sworn into the Senate after winning a special election against former Sen. Martha McSally (R). Republicans now only have a 52-48 majority in the Senate.
Biden Comments on China Tariffs
In an interview with the New York Times, President-elect Joe Biden said he wants to review President Trump’s Phase One trade deal with China prior to making any decisions on removing tariffs. Additionally, he said he wants to look over the existing agreement with China and consult with allies in Asia and Europe to develop a “coherent strategy.”
“The best China strategy, I think, is one which gets every one of our — or at least what used to be our — allies on the same page,” Biden said.
“It’s going to be a major priority for me in the opening weeks of my presidency to try to get us back on the same page with our allies,” he added.
Biden also said his goal would be to pursue trade policies that gain progress on addressing China’s practices of stealing intellectual property, dumping products, and giving illegal subsidies to corporations.[1] Notably, Biden said he wants to “fight like hell” by investing in the U.S., and said he would not sign any new trade agreement until “major” investments have been made domestically.
EU Anti-China Alliance
On Monday (Nov. 30), the European Union (EU) proposed teaming up with President-elect Biden to “push China out” of the global technology trade. The European Commission plans to propose a “Transatlantic Trade and Technology Council” to set standards on new technologies.
The plan would target objectives by both Europe and the U.S. and aim to prevent China from establishing economic dominance across a number of high-value sectors.[2]
US-China Commission Report
On Tuesday (Dec. 1), the U.S.-China Commission released a report that said the Chinese government views itself in a “global competition for power and influence” and is building a community of “like-minded” countries to challenge the global order.
According to the report, the Chinese Communist Party (CCP) “seeks to revise the international order to be more amenable to its own interests and authoritarian governance system,”and “desires for other countries not only to acquiesce to its prerogatives but also to acknowledge what it perceives as China’s rightful place at the top of a new hierarchical world order.”
The report offered 19 recommendations for the U.S. to address China’s economic rise, including applying higher scrutiny on mergers involving Chinese companies, forging closer ties to Taiwan, and granting asylum for political activists in Hong Kong.[3]
To view the report, click here.
On Wednesday (Dec. 2), the Department of Homeland Security (DHS) announced it would block imports of cotton products from the Xinjiang Production and Construction Corps, a major Chinese state-owned firm in the Xinjiang Uighur Autonomous Region. DHS said the company uses forced labor of ethnic Uighur Muslims for its products.
House Legislation
This week, the House passed legislation that threatens to remove Chinese companies off U.S. stock exchanges if they deny U.S. regulators access to their audits. The bill passed the Senate unanimously in May and is part of a broader crackdown on China’s involvement on Wall Street.[4]
To view the legislation, click here.
Phase One Deal
In October, exports of U.S. goods to China hit a monthly record of $14.7 billion, however the year-to-date tally is still significantly below the level needed to meet the goal under the Phase One Deal.
The record level likely reflects China’s increased purchases of U.S. farm goods.
To view the Commerce Department’s report, click here.
Foreign Trade Zones
On Tuesday (Dec. 1), a group of bipartisan senators, led by Sen. John Cornyn (R-TX), asked U.S. Trade Representative (USTR) Robert Lighthizer to back off his demand that would likely raise taxes by $2 billion on auto manufacturers and other companies that make goods in Foreign Trade Zones designated across the U.S.
“Supporting such a tax increase during a global pandemic and economic recession would harm American manufacturers across a wide range of industries, including the energy, electronics, automobile, and pharmaceutical sectors, among others,” the lawmakers wrote.
To view the letter, click here.
DOE Guidance
On Tuesday (Dec. 1), the Department of Energy (DOE) issued guidance that aims to increase the domestic supply chain of critical earth elements.
The guidance directs the agency’s Loan Programs Office to broadly interpret Title XVII and Advanced Technology Vehicle Manufacturing loan programs to boost manufacturing, recycling, and recovery of critical minerals.
The U.S. imports over 80 percent of its rare earth minerals. The guidance comes in response to a September executive order (EO) that directed agencies to expand U.S. production of rare earth minerals.[5]
To view the Federal Register Notice, click here.
Digital Services Taxes
French Finance Minister Bruno Le Maire said on Tuesday (Dec. 1) the country will soon collect its digital services tax, despite the potential of escalation and a trade war with the U.S.
“We will not bow to threats or the possibility of sanctions,” Le Maire said during a call with reporters.
Le Maire also said that if the U.S. placed tariffs on French products, the country would ask the EU to respond in kind.[6]
This week, Canada said it would move forward unilaterally, if necessary, with a corporate tax on digital companies if an international solution is not agreed upon.
“The government remains committed to a multilateral solution, but is concerned about the delay in arriving at consensus,” the Canadian government said.
Additionally, Canada said it plans to work with partners and stakeholders to ensure the tax system is fair and provides a “level playing field for Canadian and foreign-based businesses.”[7]
On Friday (Dec. 4), talks between Britain and the EU ended without a deal. U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are planning to speak on Saturday (Dec. 5).
After a week of talks in London, chief Brexit negotiators signaled they agreed to pause negotiations due to significant differences between the two sides.
[2] Herszenhorn, David & Hanke, Jakob. “EU seeks anti-China alliance on tech with Biden.” Politico Pro, 30 Nov. 2020. https://link.edgepilot.com/s/c39ca9f7/izL2IN17Xkm0jBDaiQ_bNQ?u=https://subscriber.politicopro.com/article/2020/11/eu-seeks-anti-china-alliance-on-tech-with-biden-2021998
[4] Mejdrich, Kellie. “Congress clears bill to ban trading in Chinese firms that thwart U.S. auditors.” PoliticoPro, 2 Dec. 2020. https://link.edgepilot.com/s/4798e4b7/yoD7ydL5wE6fKlq3vZKjDA?u=https://subscriber.politicopro.com/article/2020/12/congress-clears-bill-to-ban-trading-in-chinese-firms-that-thwart-us-auditors-2022537
[5] Wolff, Eric & Cammarata, Sarah. “DOE issues guidance calling for critical minerals projects.” Politico Pro, 1 Dec. 2020. https://link.edgepilot.com/s/046b2b93/DeRkxeNr9Ei9w8cdtmZNXw?u=https://subscriber.politicopro.com/article/2020/12/doe-issues-guidance-calling-for-critical-minerals-projects-3985621
[6] Braun, Elisa. “Le Maire: France ‘will not bow’ to U.S. sanctions threat over digital tax.” Politico Pro, 1 Dec. 2020. https://link.edgepilot.com/s/e4464ff9/4HZS2OLG70CHxDyZp647uQ?u=https://subscriber.politicopro.com/article/2020/12/le-maire-france-will-not-bow-to-us-sanctions-threat-over-digital-tax-3985607
[7] Blatchford, Andy & Allan, Sue. “Canada pledges unilateral tax on digital giants in 2022 if global talks fail.” Politico Pro, 30 Nov. 2020. https://link.edgepilot.com/s/281110dd/7HV8evAlwUeJJBYBPeUYzQ?u=https://subscriber.politicopro.com/article/2020/11/canada-pledges-unilateral-tax-on-digital-giants-in-2022-if-global-talks-fail-2022026

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