Supply chain disruptions due to China's lockdown to contain the coronavirus pandemic may end up not being as relevant as the worldwide economy shudders and stalls. Kurt Tong, former consul general to Hong Kong and a business consultant with the Asia Group, told reporters March 16: “You can have supply chain shocks that are being masked by the fact that there’s no demand for the goods.” He said the abrupt reversal of economic activity means “shipments are going to come down.” Tong and others were speaking on a webinar about trade and the coronavirus.
China accounted for 26% of imports of medical devices, protective gear and other supplies needed to fight the coronavirus epidemic before the trade war began, according to a recent paper by Peterson Institute for International Economics economist Chad Bown -- and after tariffs were put on the goods, those imports fell by 16%.
A proposal by the administration to change the standard of liability for companies that have a role in importing, but are not the importer of record, has been met with some support and some wariness by Congress members who focus on trade. The idea, which was in the Department of Homeland Security report on combating the sale of counterfeits through e-commerce platforms (see 2001240043) and the executive order that swiftly followed (see 2002100042), would require a change in law. According to a recent analysis from Crowell Moring, “the initiative seeks to extend liability beyond the importer of record for gross negligent actions by a service provider that 'facilitated' the import of such goods, an effort that likely would require additional statutory authority.”
The auto industry publicly asked the Trump administration not to rush into certifying readiness for the U.S.-Mexico-Canada Agreement's entry into force, given the fact that “a global pandemic is significantly disrupting our supply chains, and the industry is throwing all available resources into managing production through this crisis for our employees and for the broader U.S. economy.”
The British government announced that the U.S. has agreed to accept disease control measures in cattle in the United Kingdom, which means importers will be able buy U.K. beef. American agricultural officials did a three-week inspection of U.K. beef slaughterhouses last summer. The USDA said that raw beef from the UK can come into the U.S. if it was slaughtered on or after March 6. More information can be found in the March 6, 2020 FSIS Constituent Update.
Canada's House of Commons approved the U.S.-Mexico-Canada Agreement -- called CUSMA in Canada -- by unanimous consent March 13, before adjourning until April 20 due to the coronavirus pandemic. The Canadian Senate passed it less than an hour later. Royal Assent, the equivalent of a presidential signature in the U.S., followed shortly, and the Senate adjourned as well. Now, all three countries must continue to work on uniform regulations so that they can certify the treaty is ready to enter into force. Efforts to slow the spread of the coronavirus disease COVID-19 may slow that process, because the countries also have to evaluate the progress toward fulfilling commitments, such as setting up labor courts in Mexico and getting new rules of origin processes in place. Once that certification is issued, NAFTA will be replaced on the first day of the third month after the announcement.
Canada's House of Commons approved the U.S.-Canada-Mexico Agreement -- called CUSMA in Canada -- by unanimous consent March 13, before adjourning until April 20th due to coronavirus. The Canadian Senate passed it less than an hour later. The last step of royal assent is a formality. Now, all three countries must continue to work on uniform regulations so that they can certify the treaty is ready to enter into force. Once that certification is issued, NAFTA will be replaced on the first day of the third month after the announcement.
Witnesses at the Senate Small Business Committee hearing on the coronavirus pandemic said that small businesses are going to suffer as people stop traveling, shop less in person and go out to eat less as part of a social distancing strategy necessary to slow the spread of the virus. Sen. Ben Cardin, D-Md., the top Democrat on the committee, said in his opening statement that he's heard from a small jewelry company that has interruptions in its Chinese supply chain and is getting demands from distributors to pay up front, because they don't trust that retail sales will happen to pay them back.
A bill introduced by House Rules Committee Chairman Jim McGovern, D-Mass., in the House and by Sen. Marco Rubio, R-Fla., in the Senate would create a rebuttable presumption about forced labor in Xinjiang, China, which would mean any companies that import goods made in that region “must demonstrate through 'clear and convincing' evidence that there was no forced labor in their supply chains,” according to a release announcing the bill's introduction.
Two bills that affect imports passed on a voice vote out of the Health Subcommittee of the House Energy and Commerce Committee on March 11. Committee Chairman Rep. Frank Pallone, D-N.J., noted that the Cosmetic Safety Enhancement Act, H.R. 5279, is a bill he introduced in 2019 “to improve and advance the safety of cosmetics and other personal care products. Congress has not updated FDA’s authority to regulate these products in over 80 years. It is long past time that we act so that we can ensure consumers are safe and have confidence in the products they use every day.”