Biden Administration and Congress Consider Trade Policy Actions

The Biden administration has announced plans to triple tariffs on Chinese steel and aluminum products, citing unfair competition due to Chinese subsidies. The U.S. Trade Representative (USTR) is facing criticism from both the House and Senate over trade policy, including enforcement actions against China and market access agreements. USTR Ambassador Katherine Tai defended the administration’s efforts, highlighting ongoing reviews and progress in addressing trade imbalances with China.

Ambassador Tai also indicated that the review of Section 301 tariffs imposed by former President Trump is nearing completion, with decisions aligning with the four-year review. However, the fate of tariff exclusions for hundreds of products set to expire is still under review. USTR has extended the 429 exclusions still in effect. Additionally, USTR announced a Section 301 investigation on China’s targeting of the maritime, logistics, and shipbuilding sectors for dominance.

In Congress, the House Ways & Means Committee advanced trade bills, including proposals to renew and reform the Generalized System of Preferences (GSP) and limit de minimis treatment for certain imports from China. The GSP Reform Act aims to reauthorize the program for 10 years and exclude countries with ties to China. The committee also approved bills tightening rules on foreign entities of concern and investigating forced labor in the cobalt mining industry.

During a Senate Appropriations Committee Hearing, Agriculture Secretary Tom Vilsack suggested that China’s reduced agricultural purchases this year may be a deliberate signal to the United States. He pointed out that the decrease in Chinese purchases correlates with the U.S. agricultural trade deficit, indicating a possible connection. Vilsack called for a more nuanced conversation about China considering these developments. Vilsack also mentioned that China’s reduction in agricultural purchases could be a response to ongoing efforts by U.S. states and Congress to restrict Chinese ownership of U.S. farmland, citing national security concerns. He questioned whether Chinese ownership of farmland poses a greater risk than Wall Street and investment banks owning a significant portion of large farm operations in the country.

WTO Director-General Ngozi Okonjo-Iweala warned against overuse of the national security exception in trade agreements, which could lead to protectionist measures. An informal meeting of the WTO Committee on Agriculture adopted a report on a food security work program, providing recommendations on access to international food markets and financing of food imports.