February 2023 Volume 5

WASHINGTON UPDATE

The Forging Industry Has Spoken, Mr. President, Is Your Trade Representative Listening? By John Guzik

Forty manufacturers of forgings in the United States filed formal comments with the Office of the U.S. Trade Representative (USTR) calling on the Biden administration to retain and increase the current tariff rate of 25 percent on imported Chinese forgings. USTR accepted nearly 1,500 comments from the public on the tariffs as it undergoes a statutory requirement to review the Section 301 tariff action after four years. Themessage toUSTR is that the tariffs are helping America’s forging industry. In a December 2022 Forging Industry Association (FIA) survey, 71 percent of respondents indicated they added business directly due to the tariffs on Chinese forgings. The survey also indicated wages and capital expenditures increased since the duties were imposed. The duties led to more manufacturing in America. The White House and Department of Defense identify U.S. forgings as a critical part of the supply chain, this is why FIA and its member companies filed comments with USTR, to send a message to President Biden to keep the tariffs in place. The tariffs increased domestic forgers’ global competitiveness and led to international focus on China’s continued violation of U.S. and international trading laws. FIA members also provided invaluable input to USTR with their own filings, reinforcing the role the industry plays in economic and national security. U.S. forging businesses have the capacity and ability to meet current and future demands, as highlighted in comments filed by individual companies. As stated by FIA member company Trenton Forging Company in their filing, “the level of competition we face from State-Owned Enterprises [in China] remains one of the largest threats, not just to our company and industry, but to all of American manufacturing.” Members report that following imposition of the tariffs on Chinese forgings, they saw a significant increase in the number of companies interested in reshoring their supply chain to America. This is the concern raised by FIA and its members, if USTR lifts the tariffs, interest in U.S. forgings will wane and customers will return to mainly buying fromChina. Furthermore, the tariffs are a deterrent helping to prevent bad actors in China from stealing our intellectual property. Walker Forge in their filing said that, “the Section 301 actions are absolutely necessary and should remain in place at current or even higher levels because the actions are the best leverage the U.S. has to counteract

the unfair trade practices, and intellectual property theft China has been conducting against the U.S. businesses for more than twenty years.” Even with the tariffs in place, China maintained a price advantage over U.S. forgings. Under the tariffs, 82 percent of the survey respondents indicated that they lost business to China in the past twenty-four months. FIA is urging the Biden administration to keep the tariffs on Chinese forgings and should consider doubling the tariff rate on forgings from China to 50 percent. The tariffs are an effective tool to help level the unbalanced playing field. Since the imposition of tariffs, survey respondents indicated 76 percent increased their workforce in an industry, which represents 20,000 well-paying jobs. While there is no statutory deadline for USTR to act, we hope the Biden Administration is listening. The FIA will continue to work with the administration and lawmakers on Capitol Hill to educate them on the benefits of the Section 301 tariffs on the U.S. forging industry. We have the capacity and know how to deliver. Mr. President give us the opportunity to compete. John Guzik Partner The Franklin Partnership Phone: 202-285-9987 www.Thefranklinpartnership.com

FIA MAGAZINE | FEBRUARY 2023 5