Panelists Pessimistic That Section 301 Tariffs Will Change Much
Trade professionals and a trade scholar, talking on a panel that compared the Trump and Biden administrations' trade policies, said that not as much has changed on trade as might have been expected. Christine McDaniel, an economist at George Mason University, said she doesn't expect any of the Section 301 tariffs or the steel and aluminum tariffs to be lifted before the end of 2021. "I haven’t seen any indication they’re going to pull back on the tariffs," she said during a seminar at the Virginia Small Business Development Center on Sept. 21. "I’ve heard people say that the Trump trade policy is just being continued by the Biden administration, minus the rhetoric. You can make the argument for that."
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When asked by International Trade Today if the China trade policy review could end up with a reduction in the products covered by Section 301, National Foreign Trade Council President Jake Colvin said, "I have no idea." He said he doesn't think there would be any change to tariffs, rates or targets, any time soon, but said that he hopes the comprehensive China review will result in some products being removed from the Section 301 lists. "I would hope that the comprehensive review would not be an excuse to pile on more tariffs," he said.
McDaniel was more blunt, saying that adding yet more tariffs in the hopes that it would convince China to scale back its industrial subsidies is the definition of insanity -- doing the same thing over again when it didn't work the first time. "I don’t think there is anything we can do to change the way the Chinese Communist Party decides on its industrial policy or its industrial subsidies," she said.
Shawn Marie Jarosz, a customs broker and consultant, said that China has the patience to wait us out. "We’re not rolling back any real tariffs in a real significant way," she predicted. But she said that the Biden administration does have a different attitude about the European Union. "Under Trump, the allies were a threat, a threat to our economy," she said, but the U.S. did roll back its tariffs that were related to the Airbus dispute, which led to the European tariffs over Boeing also being lifted.
The panel also talked about what the 21st Century Customs Framework might look like, and what that might mean for importers and exporters.
Eugene Laney CEO of the American Association of Exporters and Importers described it this way: "Customs is taking a step back and looking at what they learned over the last 20 plus years." He said after 9/11, Customs learned the advanced data they could get could tell them a lot. He said the agency is going to be asking companies: Who are you selling something to? Who is the supplier of those goods?
"Customs has an interest from a counterfeit perspective, from a forced labor perspective, from a consumer product perspective," he said.
Laney said AAEI wants to have a role in co-creating these new rules. He also said that the future of trade will be more "black swan" events, and pointed to the influx of more than 15,000 Haitians and Venezuelans in Texas, which also has a commercial impact.
He said the aging infrastructure has come home to roost, and that the congestion in the ports is actually companies trying to create oversupply to deal with the uncertainty now.
"Blockchain might address the counterfeits at the border," he said. "AI may reduce costs for brokers. Self-driving might address some of the congestion at the port." He said his organization is trying to be prepared for what's coming five and 10 years from now.