Investigation of economic impact of tariffs underway

At the direction of Congress, the U.S. International Trade Commission has begun a fact-finding investigation into the economic impacts of Section 232 and 301 tariffs on U.S. industries. Under Section 301 tariffs on imports from China, the ITC was obligated to issue a report at the midway point of the 4-year tariffs that took effect March 2018. Since there is no such requirement for Section 232 tariffs on steel and aluminum imports that took effect July 2018, nor is there an end date to these tariffs, Congress directed the ITC to add this assessment to its investigation and report.

Key dates of the investigation include:

• July 6: Deadline for filing requests to appear at the public hearing.
• July 8: Deadline for filing prehearing briefs and statements.
• July 14: Deadline for filing electronic copies of oral hearing statements.
• July 21: Public hearing.
• Aug. 12: Deadline for filing post hearing briefs and statements.

As a quasi-independent entity, there is a history of ITC reports persuading government policy. For example, the Commission’s 2002 report on the economic impact of the then Section 201 steel tariffs persuaded the George W. Bush administration to end the tariffs three years early.

Because the ITC does not consult previous testimony, comments or reports, NAFEM and its members need to again put forth their most compelling arguments, according to Christine Sohar-Henter, NAFEM legal counsel, Barnes & Thornburg. The Department of Commerce and U.S. Trade Representative (USTR) will use the insights gained from the ITC report to further their goals. The administration also will carefully review the data, especially in light of the hot-button issue with China.

“The ITC investigation is a great opportunity for NAFEM to amplify the issues we’ve been advocating for the past four years,” said Charlie Souhrada, CFSP, vice president of regulatory and technical affairs. “We plan to fully participate in the virtual public hearing and submit written comments.”

To inform it’s July comments, NAFEM recently surveyed members to better understand the impact of tariffs on their businesses. NAFEM plans to share the following findings with the ITC in its comments.

• 100% of respondents have felt the effects of Section 232 and 301 tariffs.
• 61% of respondents report that the tariffs are causing economic harm to their companies.
• More than 90% say tariffs are impacting their businesses’ abilities to control costs.
• Nearly 73% say removal of Section 232 tariffs would help relieve business pressures and 68% report that same regarding removal of Section 301 tariffs.

All NAFEM members are invited to submit comments and testify in the virtual July 21 hearing. Those interested in doing so should reach out to Souhrada.

“The Biden administration will want to understand whether American businesses or China are hurting more from the tariffs,” said Sohar-Henter. “However, our understanding from being on the Hill is that the administration is most focused on the Russia-Ukraine situation at the moment, and trying to understand China’s perspective on the invasion. The administration doesn’t want to see China treating Hong Kong and Taiwan in a similar fashion.

“Inflation and other concerns do not seem to be at the forefront of the administration’s considerations today. It’s a challenging balance they are trying to maintain,” added Sohar-Henter.

Active advocacy via the ITC investigation continues NAFEM’s efforts to encourage the Trump and Biden administrations to end the burdensome Section 232 and 301 tariffs. Since they were introduced, NAFEM:

• Hosted a July 2021 virtual fly-in with representatives from 13 member companies and elected and appointed officials from 15 offices in Washington, D.C. to advocate for the elimination of Section 232 and 301 tariffs and address other pressing supply chain concerns.
• Submitted four sets of comments and testified three times about the Section 301 tariffs before the U.S. Trade Representative (USTR), July and Aug. 2018 and June 2019.
• Successfully advocated for 323 product exclusions from the Section 301 tariffs.
• Continually shared information on the burdensome nature of both tariffs with elected and appointed officials in person, as well as via letters and comments. NAFEM also continues working with the Americans for Free Trade, Coalition of Metal Manufacturers and Users (CAMMU), Tariff Reform Coalition (TRC) others to advocate on behalf of members.
• Developed a Section 232 advocacy toolkit and other supporting materials to help members lobby their elected officials before the tariffs being finalized.