The Office of the U.S. Trade Representative received some 380 comments on the possibility of punishing Austria, Brazil, the Czech Republic, India, Indonesia, Italy, Spain, Turkey and the U.K. if they start collecting digital service taxes as proposed. USTR is also considering punishing the EU, which is considering a unionwide DST. Trade groups that are concerned about the proposed DSTs -- including the U.S. Chamber of Commerce -- asked the U.S. to continue working toward a global solution through the Organization of Community and Economic Development. Tech groups are less worried about such penalties over other countries' DSTs. "Contrary to some press accounts, the Chamber understands real progress has been achieved in some aspects of the negotiations under way," it wrote. Associations whose tech members would be most affected by DST didn't discourage the use of tariffs. The Information Technology Industry Council said Belgium and Kenya should also be in the crosshairs, because they are also considering such taxes. The Computer & Communications Industry Association praised the use of tariff threats on France's DST, suggesting it could be effective again. "CCIA takes seriously the impact that tariffs can have and, as a general policy view, believes that they only be used in limited circumstances, in a targeted manner, and where there is a clear strategy in place designed to change the behavior of a trading partner. In the French case, it was encouraging that this strong action led to the temporary pause of collection on behalf of the French government in January 2020." The docket is USTR-2020-0022 and here. USTR announced this month it's delaying duties on French goods for now (see 2007100057).
Bipartisan legislation would direct the Office of the U.S. Trade Representative to extend expiring exclusions on Trade Act Section 301 tariffs on Chinese goods for at least a year. Thursday's bill, sponsored by Rep. Jackie Walorski, an Indiana Republican on the Ways and Means Committee, and House Agriculture Committee Chairman Collin Peterson, D-Minn., would give USTR some discretion. It would exempt the agency from the extension requirement on any product deemed to be important to the Made in China 2025 industrial program or if extending the exclusions would cause “severe harm” to the U.S. USTR would have 15 days from enactment to give Ways and Means and the Senate Finance Committee "detailed justification" for any exemption. The practice has been to extend expiring tariff exclusions through a series of notice and comment rulemakings (see 2007150051). USTR didn’t comment Friday.
Twitter’s human-enabled hack is another example of why the White House needs a national cyber director and the Cyberspace Solarium Commission’s (CSC) recommendations should be implemented (see 2007150065), said House Cybersecurity Subcommittee members during a hearing Friday. “It doesn’t take much imagination to see what chaos one could sow with such access on election day if a bad actor was pushing out disinformation,” said Rep. James Langevin, D-R.I., of the Twitter hack.
Strong enforcement against unfair trade practices “boosts U.S. exports, facilitates innovation, and supports job creation here at home,” the Alliance for Trade Enforcement wrote U.S. Trade Representative Robert Lighthizer Wednesday. The alliance is a coalition of trade associations and business groups, including MPA, RIAA and the Telecommunications Industry Association. To end bad trade behavior, the alliance “supports actions and policies that encourage U.S. trading partners to open their markets, reduce barriers to trade, and provide effective protection and enforcement of intellectual property (IP) rights,” it said. With the U.S.-Mexico-Canada Agreement on free trade now in effect, “we must ensure that Canada and Mexico abide by the commitments that they have made and treat U.S. interests fairly,” the letter said. It hails the “important leap forward” of USMCA’s digital trade provisions,” it said. Mexico has been a “major source of camcorded movies” uploaded to the internet, “facilitating international piracy of American content,” it said. USMCA requires Mexico to impose “enhanced criminal remedies into its national law,” it said. USTR didn’t comment.
The Office of the U.S. Trade Representative is eyeing additional duties on French products over France’s digital services tax. After determining in December the DST "is unreasonable or discriminatory and burdens or restricts U.S. commerce," USTR said Friday it plans the additional duties of 25%; it will suspend those levies' application for up to six months.
The U.S. and China should “redouble” efforts to “implement all aspects” of their phase one trade agreement (see 2001160022), especially “where implementation appears to be lagging,” 41 trade and business associations wrote Treasury Secretary Steve Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He. “Significantly increased” Chinese purchases of U.S. goods in “the coming weeks and months would be mutually beneficial," said CTA, the Information Technology Industry Council, National Retail Federation, Telecommunications Industry Association and others. “We strongly support and encourage” increased Trump administration efforts “to work with the US business community and stakeholders in China to increase export promotion efforts at this critical time” of COVID-19, they said Monday. They hope successful implementation of phase one “will create the necessary conditions” for the start of phase two negotiations “as soon as possible,” they said. Phase two is needed to “address important outstanding issues,” including cybersecurity, digital trade and standards setting, they said. USTR, Treasury and the Chinese Foreign Affairs Ministry didn't comment Wednesday.
U.S. trading partners “must abide by global trade rules so that American businesses can compete on a level playing field,” Americans for Free Trade, a coalition of 160 trade associations, wrote Senate Finance and House Ways and Means committee leaders Wednesday. “We disagree with the continued and indiscriminate use of tariffs to achieve those goals.” Four rounds of Trade Act Section 301 tariffs on Chinese imports are causing “unnecessary harm" while "creating little leverage to achieve further concessions,” it said. The Trump administration vows to keep the tariffs until a phase 2 trade agreement with China, but that “seems less likely with each passing day,” said the coalition. The tariffs “have sown uncertainty in the world’s economy and mistrust with trading partners and have hindered, not helped, the U.S. response to the COVID-19 outbreak,” it said. Congress should also “demand” that the Office of the U.S. Trade Representative “improve” the tariff exclusions process and raise the portion of exemptions “so that it provides meaningful relief.” Of nearly 53,000 exclusion requests U.S. importers filed for relief from the tariffs, 75.4% were denied (see 2006220047). USTR didn’t comment Thursday.
The Interagency Labor Committee under the U.S.-Mexico-Canada Agreement on free trade seeks comments by Aug. 15 on the procedures it should use to review complaints about alleged violations of the treaty’s labor provisions, said Tuesday’s Federal Register. USMCA takes effect Wednesday and gives organized labor in the U.S. a process for filing grievances with the Trump administration alleging breaches of Mexico’s new labor laws revamp (see 2006240043). The revisions give Mexican workers collective bargaining rights for the first time and protect them against retaliation for joining unions or refusing to join. The interagency committee, co-chaired by U.S. Trade Representative Robert Lighthizer and Labor Secretary Eugene Scalia, will have 30 days to review a complaint and has the authority to rescind a product's duty-free status or bar its importation if it finds serious violations. The committee will accept comments at Regulations.gov in docket USTR-2020-0028.
The Office of the U.S. Trade Representative seeks comment on whether all exclusions granted to Chinese imports on Section 301 List 4 that are to expire Sept. 1 should be extended for up to another year, says Friday's Federal Register. USTR will accept comments July 1-30. Each exclusion will be evaluated independently, based on whether a product remains available only from China, it said: Companies are required to post a rationale publicly for extending the exclusions for another year.
President Donald Trump was wrong in suggesting the U.S. could sever ties with China, said a Chinese Foreign Affairs Ministry spokesperson Friday. “In this era of globalization, the interests of all countries are closely intertwined,” he said. “Global industrial and supply chains are formed and developed in such ways as determined by market forces and business decisions. As such, it is unrealistic and insensible to try to sever them or wish political forces would override economic law. Such practices will not help solve America's domestic problems. Instead, they will only cause more harm to the ordinary American people.” The spokesperson sidestepped questions about whether Trump’s threats could endanger the U.S.-China phase one trade deal. “U.S. certainly does maintain a policy option, under various conditions, of a complete decoupling from China,” tweeted Trump Thursday. U.S. Trade Representative Robert Lighthizer told Congress a day earlier that decoupling wasn’t a “reasonable” trade policy.