Members Tell Ways and Means: Renew GSP, Change Drawback, Pass Americas Act

Across more than three hours of testimony, domestic taxes, health policy and other issues such as school choice took up most of the time during the Sept. 14 hearing.

Rep. Rudy Yakym, R-Ind., told Chairman Rep. Jason Smith, R-Mo., and other members of the committee that he would carry forward the priorities of his predecessor, Rep. Jackie Walorski, who died in an auto crash while traveling in her district.

He said RV manufacturers got lauan plywood added to the GSP product list in 2019, but then the program expired at the end of 2020. "RV manufacturers resumed paying over a million dollars a month in unnecessary tariffs," he said. "I support a long-term extension of GSP to help RV manufacturers in my district" as well as other companies seeking to diversify their supply chains away from China.

Rep. Neal Dunn, R-Fla., reminded Trade Subcommitee Chairman Rep. Adrian Smith, R-Neb., that he was one of 66 members that asked Ways and Means to renew GSP (see 2307120070), and that from his time on the House Select Committee on China, it's clear to him "that strategic competition with China is one of the defining issues of [this] Congress." He thanked Smith for his attention to renewing GSP.

"Reducing American reliance on China is a shared goal of many across the bipartisan political spectrum as well as many American companies," he said, and allowing GSP to expire runs counter to that goal. He said GSP covered non-sensitive goods from 119 developing countries, and without it, importers are paying billions more in tariffs. "Right now, American companies are forced to choose between hiking prices, absorbing the profit cuts, or finding cheaper places to manufacture, like China," he said. "Our failure to renew GSP moves manufacturing to China."

Dunn also asked the committee to pass a bill that he co-sponsors with Trade Subcommittee ranking member Rep. Earl Blumenauer, D-Ore. That bill would remove China from eligibility for de minimis shipments. He said the $800 level for de minimis is not reciprocal, and that it allows China to "play trade games at our expense."

Reducing the use of de minimis is also a part of the Americas Act (see 2301110045), and its sponsor in the House, Rep. Maria Salazar, R-Fla., pitched the bill during the hearing. She didn't mention its de minimis plank, however, instead focusing on allowing Latin American and Caribbean countries that are democracies and fighting internal corruption to join the USMCA.

Before describing the free trade and reshoring/nearshoring subsidies proposed in the bill, Salazar described how China has become the largest trading partner with most Latin American countries and its growing investment in the region.

She said it's a national security threat, and the Americas Act will reverse the trend. "If we employ this framework, we will win the trade war in our backyard," she said. "If you play by the rules, and you fight political corruption, you reduce your reliance on China, you will join the gold standard of international trade -- USMCA."

She said if Central American and South American countries are more prosperous, there will be less migration to the U.S. "We need to keep those Latin American boys and girls home," she said.

Chairman Smith replied that trading in the Western Hemisphere is one of his priorities, noting that the first international trip he took committee members on was to Mexico, Ecuador and Guyana. Responding to her data about the growth of Chinese trade in Latin America, he said, "We have to do something as a Congress to address that."

Rep. Andy Barr, R-Ky., asked the committee to move his Duty Drawback Clarification Act, which would apply a single Harmonized Tariff Schedule 8-digit code to all whiskey products so that importers of Scotch whisky can use drawback when they export American bourbon, also a type of whiskey.

"We need to make sure that bourbon whiskey … has that interchangeability with our imported whiskies," he said. With the ability to use drawback, exporters will be able to offer more competitive prices on bourbon in Europe and Asia, he said. "But we’re punishing ourselves because we have this duty."

Rep. Trent Kelly, R-Miss., asked them to support permanent normal trading relations with Uzbekistan. He said that building a strong economic partnership with the former Soviet state would counter Russian and Chinese dominance in Central Asia. It "would help further the domestic and international interests of both countries," he said.