August 2023 Volume 5

WASHINGTON UPDATE

Washington’s Second-Half Agenda By Omar S. Nashashibi

As the FIA looks back at the successes secured over the first half of 2023 – meetings at the White House, more government interest in promoting domestic forgings, and continued tariffs on Chinese imports, we can hardly sit back and glide through 2023 on these accomplishments. With a full legislative, regulatory, and trade agenda, policymakers in Washington, D.C. are just getting started. On the trade front, the FIA succeeded in convincing the Biden administration to keep the 25 percent tariffs on Chinese forgings in place as they contemplate the next steps. Many had thought that officials might have made a decision by now to lift or suspend many of the tariffs on China, but due to pressure, their review of the impact of the Section 301 import tariffs on the U.S. economy and industry continues – and with it, the tariffs on China continue.

The FIA this summer also filed formal comments with USTR about the implementation of the new NAFTA, known as the U.S-Mexico Canada Agreement (USMCA). In its filing on behalf of its members, the associations stated, that, “FIA firmly believes that the USTR and the North American Competitiveness Committee must prioritize combating the circumvention of tariffs by foreign competitors, such as in China, specifically through the transshipment of goods via our USMCA partners.” Transshipment emerged as a significant issue following the imposing of the tariffs on China, which coincided, in part, with the entry into force of the new North American agreement between Canada and Mexico. Seeing the opportunity to ship cheap and subsidized forgings from China through Mexico, competitors to FIA are seeking to exploit enforcement vulnerabilities from the southern border, prompting FIA to press USTR to do more and identify imports of Chinese origin. On Capitol Hill, lawmakers in the Senate are also considering legislation to help U.S. Customs officials with trade enforcement, including in the space of transshipment of goods from China and elsewhere, and ways to improve transparency in Customs declarations. Sources indicate that lawmakers could incorporate this legislation into a broader China and supply chain package Senate Majority Leader Chuck Schumer (D-NY) has tasked the Senate Committee with completing. FIA also is lobbying in support of stronger Buy America language to help ensure taxpayer dollars for government spending go to U.S. forgers. FIA in July weighed in with lawmakers, lobbying to preserve language in the annual Pentagon policy bill to put into law a Biden initiative to raise the domestic content threshold for federal purchases from 55 percent to 60 percent, with increases scheduled for 65 percent in 2024 and 75 percent in 2029. The language in the U.S. House of Representatives legislation will prevent future administrations from softening that language, which would allow more foreign forgings on U.S.-funded projects. FIA and its members have their hands full lobbying on trade policy, making sure tariffs on Chinese forgings remain in place, and pushing legislation to support and strengthen manufacturing in America. And many of these issues have bipartisan support. However, as Congress recently departed for its month-long summer recess, not returning to the nation’s capital until the second week of September and facing a number of deadlines all coming to a head at the end of that month, federal regulators are not letting up. Among the most concerning on the coming regulatory agenda is a potential rule by OSHA to impose restrictions on indoor and outdoor workspaces when the heat index exceeds 80oF. FIA is weighing in with OSHA raising concerns over this regulation that could take a one-size-fits-all approach to workplaces – from dry cleaners and

Treasury Secretary Janet Yellen said in July that the Biden administration had not concluded its mandatory four-year review of the Section 301 tariffs of 25 percent and 7.5 percent imposed by former President Trump starting in July 2018. The Office of the U.S. Trade Representative is still reviewing the economic data and statements provided by stakeholders on the economic impact of the tariff action. FIA testified before the U.S. International Trade Commission in July 2022 and orchestrated the submission of dozens of comments, which, in part, led to the continuation of the tariffs on Chinese forgings during the review. Sources in Washington indicate that USTR may announce its findings in the second half of 2023, with a decision that could involve lifting all tariffs on China, removing some of the tariffs, or maintaining the status quo. The FIA is continuing to pressure the White House to keep the tariffs on Chinese forgings in place and is working with allies in Congress, throughout the administration, and industry, to demonstrate the continued threat that imported Chinese forgings continue to pose to U.S. national and economic security.

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FIA MAGAZINE | AUGUST 2023