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This Week In Trade

Biden plans ‘Buy American’ executive order soon after taking office

Posted: January 19, 2021

Shortly after he becomes the 46th president of the United States on Wednesday, Joe Biden plans in his first week in office to sign an executive order strengthening so-called Buy American provisions, according to a memo released by his chief of staff.

“The president-elect will fulfill his promises to strengthen Buy American provisions so the future of America is made in America,” incoming White House chief of staff Ron Klain said in a memo to senior staff. According to Klain, the Buy American action will be signed between Jan. 25 and Feb. 2.

The Buy American pledge is the only trade-related action mentioned in the memo, which outlines roughly a dozen actions Biden will take shortly after taking office.

In other transition news, Treasury Secretary-designee Janet Yellen and Secretary of State-designee Anthony Blinken are on Capitol Hill on Tuesday for confirmation hearings. Yellen could be pressed by the Senate Finance Committee on a host of trade-related issues. The Treasury Department last month named Vietnam and Switzerland as currency manipulators. Vietnam’s currency valuation was also at issue in a Section 301 investigation the Office of the U.S. Trade Representative concluded earlier this month, deferring action to the Biden team.

Yellen also is likely to be asked about the incoming administration’s stance on ongoing negotiations at the Organization for Economic Cooperation and Development on a new international tax structure that could supersede the need for digital services taxes. USTR in several Section 301 reports released last week concluded countries were imposing digital services taxes that were discriminatory against U.S. companies but again deferred to the Biden administration. OECD negotiators, who met with stakeholders last week in Paris, are hoping to strike a deal by mid-2021 after missing a year-end deadline.

Yellen might face questions about a blocking statute China issued earlier this month that allows Chinese companies to sue third-party companies for complying with foreign laws that Beijing deems unfair. The statute appears aimed at U.S. sanctions and export control laws and could put third-party countries in the difficult position of having to choose between complying with U.S. restrictions or facing retaliation or even being locked out of the Chinese market.

The Finance Committee has not yet announced when it will hold a confirmation hearing for Katherine Tai, Biden’s pick for USTR. The leadership of the committee will shift to the Democrats this week, with ranking member Ron Wyden (D-OR) taking the gavel. Wyden said last week he hoped Tai would be confirmed “very soon.”

The Senate Foreign Relations Committee is unlikely to pepper Blinken with trade questions during his Tuesday afternoon hearing, but he will almost certainly be asked, repeatedly, about the incoming administration’s plans to deal with China, which has obvious trade implications. Outgoing Secretary of State Mike Pompeo made a show of agitating Beijing throughout the past year as the U.S.-China relationship deteriorated. Pompeo also has called for a trade deal with Taiwan while lifting restrictions on U.S.-Taiwan dealings, drawing rebukes from Beijing.

In his final days in office, outgoing U.S. Trade Representative Robert Lighthizer has touted the Trump administration’s trade policy approach and suggested the Biden administration will not drastically change direction from the one he steered for four years. “President-elect Biden did not run against our trade policy,” the soon-to-be former USTR said on Fox Business News on Friday. “He did not and had he done it, it would have been unpopular, and I think he knew that. And a lot of the people who he is bringing in understand that our trade policy was a good trade policy, was the right thing.”

Lighthizer also said he doesn’t think the Trump administration’s trade policies “will be backed away from or changed by President-elect Biden.” Trump, he said, “raised the alarm, he made people realize that our relationship with China was an unbalanced relationship that was not helping us, that was disproportionately helping them.”

The White House also is trumpeting its trade record, issuing the “economic report of the president” and the annual report of the Council of Economic Advisers late on Friday.

“The Trump Administration has reasserted U.S. interests in international trade policy by forging new bilateral trade agreements with China and Japan, renegotiating the U.S. trade deal with South Korea, and reshaping regional trade by modernizing the United States’ trade agreement with its most important trading partners, Canada and Mexico,” the 533-page report says. “These agreements go well beyond the lower tariffs that have been the focus of past trade agreements by addressing structural and technical barriers to free and fair trade. Along with progress on other trade agreements, these two major milestones will continue to drive U.S. economic growth and create American jobs.”

Meanwhile, some top USTR officials have already left the administration. C.J. Mahoney, who was a deputy USTR for much of the Trump administration before taking on a senior adviser role last year after being nominated for a top State Department slot (he never got a vote in the Senate), left earlier this month. The USTR website on Tuesday showed that Mahoney’s successor as deputy, Michael Nemelka, also has left, as has General Counsel Joseph Barloon, also the acting deputy for China affairs. Barloon was nominated by Trump to serve as a judge on the Court of International Trade, but never got a hearing.

Events

  • The trade team at Wiley Rein LLP on Tuesday will hold a virtual discussion on what to expect from the incoming Biden administration on trade policy.
  • The Brookings Institution on Tuesday will host a webcast to discuss policy challenges the incoming Biden administration will have with Japan, including on trade. Panelists include vice president of the Asia Society Policy Institute and former acting Deputy U.S. Trade Representative Wendy Cutler; Jane Nakano, senior fellow at the Center for Strategic and International Studies; Mie Oba, professor at Kanagawa University; Yves Tiberghien, professor at the University of British Columbia; and Mireya Solis, director of the Brookings Institution's Center for East Asia Policy Studies.
  • The American Society of International Law on Thursday will host a webcast to explore the potential impacts of the Regional Comprehensive Economic Partnership with panelists Mia Mikic, the director of the United Nations Economic and Social Commission for Asia and the Pacific's trade, investment and innovation division; Elizabeth Chelliah, principal trade specialist at the Singapore Trade and Industry Ministry; Chiann Bao, vice president of the International Chamber of Commerce Court of Arbitration; Manjiao Chi, professor and founding director of the University of International Business and Economics' Center for International Economic Law and Policy; Jaemin Lee, law professor at the Seoul National University School of Law; and Trinh Hai Yen, vice dean of the Diplomatic Academy of Vietnam's Faculty of International Law.
  • The German Marshall Fund of the U.S. on Thursday will hold a webinar to explore how the new administration can impact the U.S.-EU relationship. Panelists include Sven Biscop, the director of the Egmont Royal Institute for International Relations; Reinhard Butikofer, a member of the European Parliament; Ellen Laipson, the director of the George Mason University Center of Security Policy Studies; and GMFUS Vice President Ian Lesser.
  • Colombian Commerce, Industry and Tourism Minister Jose Manuel Restrepo will discuss U.S.-Colombia economic relations on Thursday during a virtual event hosted by the Meridian International Center.
  • CQ Roll Call and Fiscal Note on Thursday will hold a virtual discussion on the 2021 business outlook with Kristen Silverberg, the executive vice president for policy at the Business Roundtable and Suzanne Beall, the vice president of government relations and public policy at the International Franchise Association.
  • Center for Strategic and International Studies China analysts Thursday on will discuss the president-elect’s approach to China’s economy during a webcast. Participants include Scott Kennedy, Claire Reade, Daniel Rosen and John Holden.
  • The Lincoln Network on Friday will hold a virtual discussion on how U.S. semiconductor policy can answer the “China Chip challenge.” Panelists include Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation; James Mulvenon, intelligence integration director at SOSi; Roslyn Layton, senior vice president of Strand Consult; Dan Lips, cyber and national security director at the Lincoln Network; and Alexiaa Jordan, innovation, cyber and national security analyst at the Lincoln Network. -- Brett Fortnam (bfortnam@iwpnews.com)

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