Category: Press Releases and Statements

NFTC: 301 Tariffs Have Not, and Will Not, Address Underlying Problems in China

Posted on by Veronica Berkshire

WASHINGTON DC – National Foreign Trade Council (NFTC) Vice President Tiffany Smith today issued a statement following the announcement by USTR of additional tariffs on imports from China under Section 301:

“Today’s announcement that the Biden Administration is moving forward with increased and expanded Section 301 tariffs on imports from China continues a disappointing trend and is a regrettable move in the wrong direction. 

“Over the last six plus years, U.S. importers and consumers have paid $221.11 billion in extra costs as a result of Section 301 duties. According to data from the Tax Foundation, these tariffs have created an average annual tax increase on every U.S. household of $625 at a time when Americans continue to deal with the effects of years of record high inflation.

“It’s also important to remember that Section 301 tariffs were put in place to make it easier for U.S. companies to compete internationally by addressing a very specific set of actions by China relating to intellectual property protection. It is unclear how additional tariffs like those announced today will solve a problem that six years of tariffs have not been able to address.

“Rather than unilaterally adding new tariffs and continuing to drive up costs for consumers, the Biden Administration should be focusing on working with like-minded allies and trade partners to eliminate the underlying structural issues in China that these tariffs were intended to solve.” 

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About the NFTC

The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

Study: Weakening De Minimis Would Require Billions in New Congressional Spending

Posted on by Veronica Berkshire

New Oxford Economics study estimates that leading de minimis bills would require up to $3.2 billion in new Congressional Appropriations, the equivalent of nearly 40,000 new CBP officers

(Washington D.C.) – Oxford Economics released a study today showing that implementation of the leading legislation aimed at weakening the de minimis exemption would require billions in new Congressional spending each year. The de minimis exemption is a long-standing feature of U.S. law that allows low-value goods (under $800) to come into the US without paying import taxes that cost the government more to collect than they raise. The study found that HR 4148 (Rep. Blumenauer’s proposal) would cost the government $3.2 billion in 2025 alone, or the equivalent of 39,000 CBP officers. HR 7979 (Rep. Murphy’s proposal) would cost the government $1.6 billion in 2025 alone, equivalent to the cost of 20,000 officers.

These increases would be recurring expenses that would require new appropriations from Congress. The study notes that the need for additional staff is “exacerbated by the fact that CBP is already short by over 4,800 officers relative to what the agency’s Workload Staffing Model (WSM) has determined as necessary to accomplish the Office of Field Operations (OFO) current mission, as reported to Congress.” This would mean that CBP would face the choice between using its resources to collect a limited amount of revenue on low-value imports or using such resources to focus on other key missions at U.S. ports of entry, such as targeting, inspecting, seizing, and issuing penalties.

The study concludes that “rolling back the de minimis provision would considerably increase costs for consumers and small businesses, while costing the government considerably more than the revenue it is expected to raise.”

Key findings from the Oxford Economic report released today:

  • Rep. Blumenauer’s proposal would cost the CBP $3.2 billion in 2025, while generating $627 million in revenue in that year according to the CBO, implying that the bill would result in a large net cost to taxpayers.
  • Rep. Murphy’s proposal would also cost more than it brings in. The Oxford report estimates that CBP would need to spend an additional $1.6 billion in 2025 to implement this bill, which would only raise $1.0 billion in revenues during that same year.
  • These amounts would require new appropriations, as CBP does not retain the revenue it collects.
  • The elimination of the de minimis threshold for some US imports would inevitably slow customs operations, increase paperwork, and reduce CBP productivity.
  • Under Rep. Murphy’s proposal, affected goods will see a 55% price increase for end users. This is expected to affect 330 million packages in 2025.
  • Under Rep. Blumenauer’s proposal, affected goods will see a 40% price increase for end users. This is expected to affect 646 million packages in 2025.
  • The report also points out that de minimis volume, according to experts, will be routed into the postal environment, where there have been significant enforcement challenges.

The Oxford Economics study adds to other recent research on the increased cost to consumers and taxpayers of degrading de minimis. In June, economics professors from Yale and UCLA published a study that found that degrading de minimis would be a regressive tax on low-income consumers, disproportionately tax minority households, and result in a 12 percent tax increase for America’s poorest neighborhoods where families are struggling with inflation and rising costs.

This week, The American Action Forum (AAF), a think tank led by former Director of the Congressional Budget Office Douglas Holtz-Eakin, also released a study showing that eliminating de minimis would result in $8 billion to $30 billion in additional annual costs that would eventually be passed on to consumers and would harm small businesses.

Read more about how de minimis benefits U.S. businesses and consumers here.

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About the NFTC

The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

NFTC Welcomes USTR Action Against Canada’s DST

Posted on by Veronica Berkshire

WASHINGTON DC – National Foreign Trade Council (NFTC) Vice President Tiffany Smith today issued a statement following the United States Trade Representative’s (USTR) request for United States-Mexico-Canada Agreement (USMCA) dispute-settlement consultations in response to Canada’s discriminatory digital service tax (DST):

“Today’s action is a critical first step in pushing back against the proliferation of discriminatory digital policies and other similar taxes that are unfairly targeting U.S. companies.

“Canada’s decision to unilaterally implement its DST undermines the good-faith work that countries are engaged in to reach a more durable international consensus in the Inclusive Framework Two Pillar Solution.

“NFTC commends the Biden-Harris Administration for taking action today to defend American interests. It is a strong signal that the United States will not tolerate policies by any country that unfairly disadvantage U.S. businesses and such an action will be met with a strong response.

“We once again urge the Canadian government to reconsider the implementation of their DST and fully commit to the process of reaching a consensus-based international solution at the OECD, and ask the Biden-Harris Administration to continue to prioritize this issue until it is resolved.”

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About the NFTC

The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

NFTC Statement on WTO E-Commerce Text

Posted on by Veronica Berkshire

WASHINGTON DC – National Foreign Trade Council (NFTC) President Jake Colvin today issued a statement following the release of a statement and “stabilized text” by negotiators of a World Trade Organization e-commerce agreement:

“The release of a draft WTO e-commerce agreement text sends an important signal of the WTO’s potential to help write new global rules for the digital economy, but it’s also a clear example that other countries will step into a leadership vacuum when the United States steps away.

“Importantly, the agreement would create a durable prohibition on customs duties on electronic transmissions. The text also seeks to improve alignment on digital trade facilitation, cybersecurity, and data privacy, though there’s more work to be done to ensure that those provisions are workable and promote open and fair access to the global digital economy.

“But the fact that other major economies felt emboldened to move on digital trade without the United States is extraordinary. This announcement ought to be a canary in the coal mine for the Harris and Trump campaigns about what happens in the absence of assertive U.S. global economic leadership. If the United States does not take a leadership role in driving the development of rules for the digital economy, other countries will step in.

“There’s an acute need for the United States to engage in some fresh thinking to cement U.S. global technology leadership for the future.”

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About the NFTC

The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

NFTC Calls for Strong U.S. Response to Canada’s “Ill-Advised” Digital Services Tax

Posted on by Marshall Lane

Washington D.C. – National Foreign Trade Council (NFTC) President Jake Colvin today issued a statement following passage by the Canadian Parliament of a bill implementing a Digital Services Tax (DST), which is expected to become law imminently:

“Yesterday’s passage of Canada’s retroactive and discriminatory DST legislation is deeply disappointing. NFTC has repeatedly stated that this ill-advised step reflects fundamentally unwise tax policy and unfairly targets a broad range of American companies. As OECD Pillar One negotiations are still underway, this undermines the collaborative, good-faith work that other countries are engaged in to reach a more durable international consensus on digital economy taxation that avoids a patchwork of country-specific DSTs.  

“The enactment of the DST is the latest in a troubling trend of actions taken by the Canadian government directed toward U.S. companies. 

“The Biden Administration has repeatedly expressed to Canada – to no avail – that it has concerns with fiscal policies, including the DST, that single out American companies while excluding national firms and indicated that, if Canada adopted a DST, USTR would examine all options, including under our trade agreements and domestic statutes.

“The time for action has arrived. With the DST on the verge of being signed into law, we are calling on Ambassador Tai to lead a strong U.S. response that holds Canada accountable to its trade obligations and defends the interests of U.S. companies.”

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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

Brad Wood Joins NFTC as Senior Director for Trade and Innovation Policy

Posted on by Veronica Berkshire

Washington D.C. – The National Foreign Trade Council (NFTC) announced that Brad Wood has joined the NFTC as Senior Director for Trade and Innovation Policy.

He will serve as NFTC’s lead on policy areas including environment, health, frontier technologies and intellectual property. He will also lead an effort to further deepen the Council’s relationships with the diplomatic community and bolster engagement in North America and the Indo-Pacific.

Most recently Brad served for more than a decade at the Canadian Embassy, where he advanced U.S.-Canada cooperation in support of open trade and an integrated North American market.

“Brad is going to be a great addition to the NFTC team,” said NFTC President Jake Colvin. “ His deep network of relationships throughout the hemisphere, expertise on trade and familiarity with companies’ integrated North American operations will be an asset as we help our members prepare for what’s on deck following the election.”

Brad’s full bio can be found below.

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Brad Wood
Senior Director, Trade and Innovation Policy

Brad Wood is Senior Director for Trade and Innovation Policy at the National Foreign Trade Council, the leading business association dedicated solely to advancing the interests of U.S. companies in international commerce.

Brad previously served in consecutive roles at the Embassy of Canada where he was most recently the Trade Program Manager for Innovation and Industrial Policy and the U.S. representative for Innovation, Science and Economic Development Canada. In this capacity Brad advanced Canada-U.S. cooperation bilaterally and with third countries, and worked with the Administration, Congress and business sector to ensure policies support open trade and the integrated North American market.

Prior to the Embassy, Brad worked in several capacities for the Government of Canada in Ottawa where he shaped international policy priorities, coordinated appropriations, mitigated technical barriers to trade, and represented Canada internationally, including at the World Trade Organization.

Brad holds a Master’s in International Trade from the University of Saskatchewan and a Bachelor of Business Administration with an economics double major from Brandon University.

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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

U.S. Business Clamoring for More Tax Treaties

Posted on by Veronica Berkshire

Washington D.C. – The National Foreign Trade Council (NFTC) today released the 2024 Tax Treaty Survey.

The survey, which was answered by tax professionals from NFTC member companies, asked businesses to rate their tax treaty priorities around the world.

“Companies value certainty and avoidance of double taxation, which is why Tax Treaties are so crucial,” said Anne Gordon, NFTC Vice President for International Tax Policy. “As countries around the world elect new leaders and policies change, treaties provide companies with the certainty they need to make long term investment plans and succeed in global markets. Continuing to vigorously pursue treaties also strengthens the U.S. position as a global leader and allows us to defend our interests in other markets.”

Highlights of this year’s survey include:

  • Brazil was once again identified as the top priority country for respondents.
  • For Brazil, Transfer Pricing was identified as the greatest concern, followed by Mutual Agreement Process (MAP); Business Profits, and reducing withholding rates on royalties.
  • Ireland, Israel, Malaysia and Saudi Arabia, Switzerland were also listed as high priority countries for the business community.
  • In total, respondents requested treaties with 32 countries.

Read the full results here.

An infographic of the most requested countries can be found here.

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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

NFTC, Leading Trade Associations Call for U.S. Response Upon Enactment of Canada DST

Posted on by Veronica Berkshire

Washington D.C. – The National Foreign Trade Council (NFTC) today joined a number of leading industry associations in calling for a robust response from the United States once Canada enacts its digital services tax (DST).

“As Canada’s Parliament continues to rush forward with its discriminatory and retroactive DST, the United States must be prepared to respond,” said Tiffany Smith, NFTC Vice President for Global Trade Policy. “That is why we are calling on Ambassador Tai to seek dispute settlement consultations under the United States-Mexico-Canada Agreement (USMCA) to ensure Canada complies with its USMCA obligations and to defend the interests of U.S. companies operating in Canada.”

The letter reads, in part: “Although determining the specific economic effect on U.S. firms may not yet be possible given lack of implementing rules, industry is already feeling the effects of Canada’s decision. Many companies have begun the costly and burdensome process of preparing for incipient tax liability. Moreover, as underscored by previous 301 investigations regarding DSTs, the tax will also negatively affect U.S. startups, small businesses, and consumers, in the form of increased prices for critical services on which they rely. In short, firms are already experiencing the harms of the law, and the clear outlines of Canada’s intent now create the basis for a legal response.”

“Canada still has time to avoid creating an unnecessary trade dispute with its closest ally and largest trade partner and jeopardizing the finalization of the Pillar One negotiations at the OECD,” added Smith. “We strongly urge Canada to reconsider implementation of the DST and to continue actively engaging in the OECD Inclusive Framework Pillar One negotiations before violating its obligations by enacting this unilateral measure.”

Along with NFTC, the letter was signed by Coalition of Service Industries (CSI), Computer & Communications Industry Association (CCIA), Consumer Technology Association (CTA), Engine, Information Technology Industry Council (ITI), Software & Information Industry Association (SIIA), TechNet, U.S. Chamber of Commerce, and U.S. Council on International Business (USCIB).

Read the full text of the letter here.

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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.

NFTC Welcomes IPEF Progress and Calls for Further Efforts to Advance Trade Pillar

Posted on by Veronica Berkshire

WASHINGTON DC – National Foreign Trade Council (NFTC) Vice President for Global Trade Policy Tiffany Smith issued a statement following the conclusion of the Indo-Pacific Economic Framework for Prosperity (IPEF) Ministerial meeting in Singapore:

“The signing of the IPEF agreements implementing the Clean Economy and Fair Economy Pillars and the overarching deal is an important step towards making the concept a reality.

“NFTC looks forward to working with the Commerce Department to help advance the goals set out in the supply chain, clean energy and fair trade pillars in order to create more opportunities for U.S. companies of all sizes to bring their goods, services, and know-how to the Indo-Pacific region.

“At the same time, it is disappointing that more progress has not been made under the Trade Pillar to underpin the cooperative efforts under Pillars 2-4 with a set of durable, predictable trade rules that would go even farther in enhancing U.S. leadership and economic engagement in this important region.”

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About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.