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NFTC Weighs In On China 301 Investigation

Posted on March 20, 2018 by dcadmin

In letter, NFTC President asks Congress to urge the Administration to take a measured approach in its Section 301 Investigation on China.

Washington D.C. – The National Foreign Trade Council (NFTC) today asked Congressional leaders to urge the Administration to take a measured, multilateral approach to deal with China’s discriminatory trade practices.

In a letter, sent earlier today to the Chairmen and ranking members of the House Ways and Means and Senate Finance Committees, NFTC President Rufus Yerxa outlined his membership’s agreement with the Administration’s proposed findings that China is imposing unreasonable and discriminatory restrictions on U.S. businesses, but raised major concerns about premature imposition of unilateral tariffs on a wide array of imports from China, as apparently contemplated by USTR.

The letter suggests that use of unilateral actions before outlining the specific actions demanded of China and engaging in a period of real negotiations would be contrary to historical use of Section 301. NFTC companies believe this course of action would enable other countries to gain advantages in the Chinese market and make U.S. companies less competitive in the global economy, all without dealing with China’s problematic approach to technology transfer, intellectual property and innovation.

“I think The Administration has not really sought much business input before deciding its likely actions,” Yerxa noted, “so my members felt a need to raise a warning flag with Congress prior to this week’s hearings.”

Full text of the letter:

March 20, 2018

Senator Orrin Hatch

Chairman

Committee on Finance

United States Senate

219 Dirksen Senate Office Building

Washington, DC 20510

Senator Ron Wyden

Ranking Member

Committee on Finance

United States Senate

221 Dirksen Senate Office Building

Washington, DC 20510

The Honorable Kevin Brady

Chairman

Committee on Ways of Means

United States House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

The Honorable Richard Neal

Ranking Member

Committee on Ways of Means

United States House of Representatives

341 Cannon House Office Building

Washington, DC 20515

Dear Chairmen and Ranking Members:

As your committees prepare to conduct hearings this week on the trade policy agenda, we would like to share with you our organization’s views about the Administration’s Section 301 investigation into China’s acts, policies and practices related to technology transfer, intellectual property and innovation.

NFTC member companies have significant concerns about China’s growing use of trade and investment policies, including those designed to promote “indigenous technologies.” These practices deny national treatment and create discriminatory burdens that are unreasonable for American companies, innovators and workers.

While NFTC supports efforts to investigate and address these discriminatory practices, the Council and its member companies are interested in a strong, multi-pronged effort aimed at improving the ability of U.S. companies to compete in China rather than making things worse. Our observations are directed at this fundamental goal.

The overall focus of the Section 301 investigation should be to bring China to the negotiating table for a meaningful resolution of specific, sector-by-sector issues with the ultimate goal of removing the offending practices and policies. Premature, unilateral sanctions alone are unlikely to achieve this objective. It is critical that the United States work with our allies and major trading partners to identify and outline the specific actions we seek from China, and to devise a strategy to increase pressure in order to guarantee all of our exporters and investors fair treatment in these areas. Multilateral pressure and a consensus with our allies will be key to maximizing leverage over China’s practices.

The Council is particularly concerned with reports that the Administration is considering immediate imposition of tariffs on up to 100 categories of products including consumer electronics, toys, IT products, furniture and sporting goods, as a potential remedy prior to any coordinated negotiating effort. This runs contrary to the long history of successful use of Section 301 as a carefully managed device to obtain foreign compliance rather than a pretext for import protection.

Unilateral imposition of tariffs prior to any meaningful negotiations with China will raise charges that the U.S. has ignored its WTO commitments and will turn the focus from China’s unjust behavior to the legitimacy of our own action. This will, in turn, alienate many of the trading partners we are relying upon to support our cause and may embolden China to resist our efforts. It will provoke retaliation by China against major U.S. exports, causing significant harm to key U.S. industries and agricultural interests and increasing the likelihood that competitors from Europe, Japan and elsewhere supplant American businesses, innovators and farmers as suppliers in China’s market.

Higher tariffs on a broad range of consumer goods will increase the shopping bill for all Americans, while tariffs on components will harm U.S. productivity in all sectors and U.S. manufacturing exports by making it more expensive and challenging to procure key inputs. At a time when the U.S. economy is enjoying a resurgence thanks to tax and regulatory reform, these tariffs run the risk of stifling our own growth while making our exporters less competitive in the global economy. In combination with the tariff increases already announced on steel and aluminum, these additional taxes will be even more harmful to domestic manufacturers.

Finally, it is reported that the Administration is also considering measures to impose “reciprocal investment restrictions” on Chinese investors in the United States as part of its response under Section 301. Efforts to develop new investment restrictions on China should be the subject of extensive consultations with U.S. companies, as it is vital to consider existing U.S. investment interests that could be adversely affected if the matter is not handled appropriately. Furthermore, as with other possible Section 301 remedies, proposed investment restrictions should not be imposed immediately, but should be used as leverage to obtain the far more desirable goal of fundamental changes in China’s investment and IP regimes.

We urge your committees to impress upon USTR the importance of a strategy to address Chinese policies and practices in a manner that will achieve maximum benefits for U.S. trade and investment interests and avoid unintended effects that may cause greater harm than good to U.S. economic interests.

Sincerely,

Rufus Yerxa

President

To download the full text of the letter, click here.

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About the NFTC

Serving America’s Global Businesses Since 1914– The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules- based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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NFTC Announces Formation of Alliance for Competitive Steel and Aluminum Trade

Posted on March 6, 2018 by dcadmin

Washington D.C. – The National Foreign Trade Council (NFTC) today announced the formation of the Alliance for Competitive Steel and Aluminum Trade, a group of concerned downstream users of steel and aluminum and competitive U.S. exporters.

The Alliance, whose membership includes over 30 sectoral associations representing a vast cross-section of American manufacturers and farmers, will meet with members of Congress and the Administration to express their concern about the downstream effects of the proposed tariffs on imports of steel and aluminum announced by President Trump last week and the potential for foreign retaliation against the President’s action.

“Our alliance represents some of the most competitive industries in the U.S. economy, and we are deeply concerned about the effects that these tariffs will have on industries and companies that use steel and aluminum,” said Rufus Yerxa, President of the National Foreign Trade Council. “We are also concerned about the retaliation against America’s most competitive exporters. This ‘double whammy’ of higher prices to our domestic producers and retaliation against our exporters will endanger tens of thousands of quality American jobs.”

In a policy paper also released today, the Alliance outlined the member’s concerns regarding the proposed tariffs, including the following:

Damage to downstream users and American consumers;
Damage to U.S. exports; and
Damage to U.S. economic growth.

To read the full text of the policy paper, as well as the full membership of the Alliance, click here.

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About the NFTC

NFTC Statement on Steel and Aluminum Tariffs

Posted on March 1, 2018January 4, 2023 by dcadmin

Washington D.C. – National Foreign Trade Council (NFTC) President Rufus Yerxa today issued the following statement regarding the President’s decision to implement tariffs on imports of steel and aluminum:

“The many manufacturing and exporting companies of NFTC are gravely concerned by today’s announcement.

“These are massive tariff hikes and they are going to raise costs for many of our world class industries like autos, machinery and equipment, oil and gas, and construction. These are all huge sectors of the economy, and the negative impacts on them will surely outweigh any benefits to the steel and aluminum industries.

“In addition, the use of a sweeping national security justification will lead many countries to retaliate against our most competitive exporters and will undermine our legitimacy in the WTO, NATO, and other global alliances. Other countries will retaliate to defend their ‘national security’ whether on agriculture, computers or airplanes.

“Finally, imposing massive new costs on American industry and the American taxpayer will negate the positive benefits from the recent tax cuts and regulatory reform. This is not the way to solve the structural problems that the steel and aluminum industries face.”

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About the NFTC

NFTC Among Leading Industry Groups Urging Administration to Consider Effects of Import Restrictions on Steel and Aluminum

Posted on February 27, 2018 by dcadmin

In letter, leading industry groups urge the Administration to consider downstream effects of implementing tariffs or quotas on imports of steel and aluminum.

Washington D.C. – The National Foreign Trade Council (NFTC) today joined other leading industry associations in urging the Administration to consider the downstream effects of instituting broad tariffs on imports of steel and aluminum in an attempt to curb global overcapacity.

The letter, signed by a broad sector of steel and aluminum consuming industry groups, highlights the concerns of U.S. manufacturers, exporters, and farmers, about the likely adverse effects of this relief on their industries. “After reviewing the Reports, our industries are worried that all of the remedies recommended are overly-broad and will have severe detrimental impact on downstream users of steel and aluminum.”

Rufus Yerxa, President of the NFTC, added “We hope the President will weigh the adverse impact of these onerous restrictions on many downstream industries and will instead look for other ways of addressing concerns about global overcapacity in these sectors.”

Among the concerns cited in the letter are:

Increasing costs of steel and aluminum will injure U.S.-based users of these products, leading to the loss of thousands of American jobs.
Actions of this type will inevitably lead to retaliatory actions affecting U.S. manufacturers, farmers, and commodity exports, by our trading partners.
Implementing broad import restrictions on steel and aluminum will serve as a drag on overall economic growth and risk the benefits of the Administration’s tax reform and regulatory agenda.

Full text of the letter:

February 27, 2018

The President
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President: As representatives of thousands of businesses across the United States, we are concerned with the recently released reports by the Department of Commerce entitled “The Effects of Imports of Steel on the National Security” and “The Effects of Imports of Aluminum on the National Security” (collectively, the Reports).

After reviewing the Reports, our industries are worried that all of the remedies recommended are overly-broad and will have severe detrimental impact on downstream users of steel and aluminum. We understand your goal of supporting these two important sectors of our domestic manufacturing base. However, it is our belief that global tariffs and quotas on imports of these products will injure the purchasers of these products and will lead to the loss of thousands of American jobs. Trade restrictions of this nature and magnitude will therefore lead to more downstream steel and aluminum-containing products being imported into the U.S. Historical and current data shows that the remedies prescribed in the Reports will significantly raise input costs for industries that use these products. Further, as steel and aluminum costs continue to rise and availability decreases, it will impede the ability of downstream manufacturers and the suppliers and retailers reliant upon them to reinvest in innovation and their workforce. Finally, actions of this type will inevitably result in trade retaliation by our trading partners, and such retaliation will likely target U.S. exports abroad, including manufacturers, agricultural and commodity exporters and even our services industries. Thank you for your efforts to support manufacturing in America. The U.S. economy is starting to see the benefits of the Administration’s tax reform and regulatory agenda. However, we believe that all options provided in the Reports will significantly curtail job growth for downstream users, which are cumulatively far larger in terms of employment than steel and aluminum. Such trade measures will serve as a drag on overall U.S. economic growth and far outweigh any benefit to steel and aluminum producers.

We urge you instead to look for better solutions to legitimate concerns about global trade in these products that will benefit both producers and users. Sincerely,

Air-Conditioning, Heating, and Refrigeration Institute
Alliance of Automobile Manufacturers
American Chemistry Council
American Petroleum Institute
American Soybean Association
American Supply Association
Association of Equipment Manufacturers
Association of Global Automakers
Can Manufacturers Institute
Grocery Manufacturers Association
Industrial Fasteners Institute
Midwest Food Processors Association
Motor & Equipment Manufacturers Association
National Council of Farmer Cooperatives
National Electrical Manufacturers Association
National Foreign Trade Council
National Pork Producers Council
National Tooling and Machining Association
Outdoor Power Equipment Institute, Inc.
Pet Food Institute
Precision Machined Products Association
Precision Metalforming Association
Shelf-Stable Food Processors Association
Truck & Engine Manufacturers Association
U.S. Wheat Associates

Cc.
The Honorable Robert Lighthizer, United States Trade Representative
The Honorable Wilbur Ross, The Secretary of the Department of Commerce of the United States
The Honorable Gary Cohn, Director of the National Economic Council

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About the NFTC

NFTC Statement on Section 232 Reports on Steel and Aluminum

Posted on February 16, 2018 by dcadmin

Washington D.C. – National Foreign Trade Council (NFTC) President Rufus Yerxa released the following statement today following the release by the Commerce Department of the Section 232 Reports on Steel and Aluminum.

“The NFTC is gravely concerned with the Commerce Department’s recommendations to the President to implement sweeping tariffs and quotas on imports of steel and aluminum in the name of national security. We urge the President to reject these recommendations and work with Congress and the entire business community—not just these two industries – to determine how best to address legitimate concerns relating to overcapacity or unfair trade in these sectors.

“There is no doubt that imposing trade restrictions of such magnitude will cause more harm than good to our economy, raising costs to downstream industries that use steel and aluminum, as well as to the ultimate consumers. These sectors are far greater than steel and aluminum in terms of manufacturing output, jobs and exports. This action ignores their interests. Moreover, using “national security” as a pretense to impose broad import protection for entire sectors of our economy is clearly inconsistent with our international obligations. If allowed to stand, it would open the door for other countries to use similar measures against our competitive exports.

“While there are legitimate concerns regarding the adverse effects of global overcapacity or unfair trade, there are other ways to address these problems, including through international negotiations and existing trade remedies designed for that purpose. The actions proposed today are the wrong way to go about it, and will end up hurting our workers, producers and consumers.”

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About the NFTC

NFTC Applauds Effort by 70 Countries to Move WTO E-Commerce Agenda Forward

Posted on December 13, 2017October 13, 2022 by dcadmin

Buenos Aires, Argentina – National Foreign Trade Council (NFTC) President Rufus Yerxa released the following statement with regard to developments in electronic commerce (e-commerce) following the conclusion of the World Trade Organization’s 11th Ministerial Conference in Buenos Aires, Argentina:

“The outcome of this Ministerial was the most promising result in years for the future of the digital economy and e-commerce work at the WTO. The fact that 70 countries, both developing and developed, are supporting a positive agenda to create a better environment for a digital trade framework is a tremendous boost for the e-commerce economy. It is an indication that countries around the globe are realizing how much new technologies drive entrepreneurship and benefit businesses of all sizes.

“This announcement signals that development is best enhanced by pursuing gold standard government policies and implementing programs that give local businesses, organizations and workers access to global customers, talent and partnerships.

“We are very pleased that the U.S. government is a part of this effort and thank Ambassador Lighthizer and his team for their support of the WTO’s e-commerce agenda during this Ministerial.

“We also applaud the WTO decision today to extend its long-standing moratorium on e-commerce tariffs,” added Yerxa. “E-commerce protectionism would be very harmful to consumers and will only serve to isolate countries from this fast-growing technological revolution, so this was a very sensible decision.”

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About the NFTC

NFTC Applauds Bipartisan Push by U.S. Governors to Modernize and Increase De Minimis in NAFTA Negotiations

Posted on December 4, 2017 by dcadmin

Ahead of December NAFTA meetings, Governors call on negotiators to raise de minimis in order to benefit businesses, consumers, and suppliers across borders

Washington D.C. – The National Foreign Trade Council (NFTC) today applauded a bipartisan group of state Governors who are calling on NAFTA negotiators to raise de minimis levels in NAFTA renegotiations.

Cutting customs red tape and raising the de minimis level in Mexico and Canada as part of the renegotiation of the NAFTA will help grow jobs, promote growth, and increase exports. NFTC has helped to spearhead efforts to modernize and expedite customs procedures with our NAFTA partners making special mention of the issue in comments submitted to the U.S. Trade Representative’s (USTR) office ahead of the start of renegotiations noting that an increased de minimis level would “unlock the exporting potential of small and medium-sized businesses (SMEs) in particular, who often find complex customs procedures and costs to be among the most serious obstacles to trade.”

The governors recently sent a letter to U.S. and Canadian negotiators ahead of intersessional meetings on NAFTA that will be held in Washington D.C. in mid-December. In their letter, the bipartisan Governors highlight how raising de minimis levels would cut red tape at borders that often slow deliveries and increases costs, hurting both businesses and consumers.

“In global trade, de minimis levels are important, because they permit small international transactions to take place without the lengthy delays, high costs, and red tape associated with larger scale commercial importing,” the Governors write. “When a de minimis level is too low, the combined effects of the tariffs and the administrative collection process inflate the total cost of otherwise inexpensive goods. Low de minimis levels are particularly burdensome for consumers, small businesses, and manufacturers who rely on sourcing small components from a variety of suppliers.”

Low and outdated de minimis and informal clearance levels are hindering the flow of low-value shipments coming from U.S. exporters to consumers in Mexico and Canada while, at the same time, Mexican and Canadian exporters benefit from state of the art customs procedures and a de minimis threshold of $800 in the United States. The NFTC urges USTR to make efficient customs procedures and higher de minimis levels in both Mexico and Canada a priority during the next round of NAFTA negotiations.

The full text of the Governors letter:

The Honorable Robert Lighthizer
Ambassador
United States Trade Representative
600 17th Street, NW Washington, DC 20006

The Honorable Chrystia Freeland, P.C., M.P.
Minister of Foreign Affairs House of Commons
Ottawa, ON K1A 0A6

November 21, 2017

Dear Ambassador Lighthizer and Minister Freeland:

As Governors of U.S. States, we are keenly interested in protecting and enhancing the vibrant trading relationship between the United States and Canada.

During his recent address to the National Governors Association, Prime Minister Trudeau pointed out that 37 U.S. States count Canada as their top export destination. Similarly, Statistics Canada reports that U.S. states are the top export destination for all 10 of Canada’s provinces and represent more than 75% of Canadian exports.

It is in the spirit of this strong economic interdependence that we write urging you to use the upcoming renegotiation of the North America Free Trade Agreement (NAFTA) as an opportunity to modernize and increase the long-standing C$20 (US$15) de minimis level for low value goods entering Canada.

In global trade, de minimis levels are important, because they permit small international transactions to take place without the lengthy delays, high costs, and red tape associated with larger scale commercial importing. When a de minimis level is too low, the combined effects of the tariffs and the administrative collection process inflate the total cost of otherwise inexpensive goods. Low de minimis levels are particularly burdensome for consumers, small businesses, and manufacturers who rely on sourcing small components from a variety of suppliers. As you know, the United States recently raised its de minimis threshold on imported goods to $800, while Canada’s C$20 (US$15) threshold remains among the lowest in the industrialized world. As the global economy continues to see increased online sales that result in direct shipments to purchasers, Canada’s low threshold for the collection of duty and tax creates unnecessary price increases for Canadian consumers and hinders North American manufacturers’ supply chains on both sides of our shared border. A modernization of the Canadian de minimis level would be beneficial to both countries. By reducing the cost of goods that Canadian manufacturers obtain from U.S. suppliers, they can obtain timely and cost effective delivery of necessary business inputs.

A modernization of the de minimis level would give Canadian consumers much needed relief from prices that have been inflated by 30 year old tariffs on goods that may not be available domestically. The policy change would also benefit U.S. suppliers and small businesses who are anxious to provide their Canadian customers with products that are affordable and readily available.

We are proud of the strong trading relationship between our states and Canada, and believe that the modernization of NAFTA will only further enhance this relationship. Raising the Canadian de minimis threshold will strengthen the North American supply chain. It will benefit businesses and consumers in both Canada and the United States so that commerce between our two countries can continue to prosper.

Sincerely,

Gary Herbert, Governor of Utah
Kate Brown, Governor of Oregon
Larry Hogan, Governor of Maryland
Charlie Baker, Governor of Massachusetts
Daniel Malloy, Governor of Connecticut
Paul LePage, Governor of Maine
Steve Bullock, Governor of Montana
Terry McAuliffe, Governor of Virginia

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About the NFTC

Cutting Customs Red Tape Through NAFTA Will Help the United States Grow Jobs, Promote Growth, And Increase Exports

Posted on December 1, 2017 by dcadmin

De Minimis Letter from US Governors

Posted on November 21, 2017 by dcadmin

NFTC Statement on Cuba Travel Restrictions

Posted on November 8, 2017 by dcadmin

Washington D.C. – NFTC Vice President Jake Colvin today released a statement following the Administration’s enactment of new travel restrictions to Cuba.

“The actions announced today by the Administration are misguided,” said Colvin. “Allowing people-to-people travel only as part of organized trips will limit the contact that Americans can have with everyday Cubans on the island and take money out of the pockets of Cuban entrepreneurs and home-stay hosts.

“Restrictions on engaging while traveling with individual Cuban entities will be confusing for travelers and require significant U.S. Government resources to enforce.

“The new restrictions on American businesses in Cuba are also counterproductive. In particular, restricting American companies from participating in the special Mariel economic zone prevents Americans from engaging in a fledgling economic experiment by the Cuban government that could potentially benefit Cuban workers and the Cuban people.”

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About the NFTC
Serving America’s Global Businesses Since 1914– The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules- based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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