Coalition letter opposing the inclusion of the “Removing Global Marketplace Distortions to Protect American Jobs Act of 2021” in the Bipartisan Innovation Act
Subject: Remove the “Eliminating Global Marketplace Distortions to Protect American Jobs Act of 2021” from the Bipartisan Innovation Act
To Members of the United States Congress:
On behalf of the undersigned organizations, we are writing to express our strong opposition to the inclusion of the “Elimination of Global Marketplace Distortions to Protect American Jobs Act of 2021” (Division K, Title II of the America COMPETES Act of 2022) in any final USICA/America COMPETES/Bipartisan Innovation Act legislation that Congress may enact. We strongly support congressional efforts to advance policies to strengthen the ability of American workers and businesses to compete globally, including with China, and we will continue to work in conference to improve them.
This legislation would make sweeping changes to US anti-dumping and countervailing duty laws without undergoing the extensive congressional deliberations required for such changes. Proponents of the legislation argue that it is aimed at tackling Chinese market-distorting activities and overcapacity in the steel sector. However, this would result in the application of more and higher customs duties on a diverse range of goods imported from all U.S. trading partners, not just China, including products from economies that are not unfairly subsidized or dumped in the U.S. market. This would penalize legitimate trade and contribute to inflationary pressures on US businesses.
For example, while the United States has implemented more than 230 AD/CVD duties on Chinese products, this proposal would also affect a range of other products. Some examples include imports of steel and aluminum from Germany and Japan, softwood lumber products from Canada, imports of amino acids and chemicals from France, and pasta from Italy. It would also impact agricultural imports such as biodiesel and fertilizers, with significant new burdens on US farmers and ranchers. Not only would these changes drive up the costs of necessary inputs for U.S. manufacturers, they would also hit the consumer goods, retail, and renewable energy sectors particularly hard.
Specifically, the legislation would establish the concept of “successive” investigations, referring to two types of anti-dumping/countervailing investigations involving imports from different countries. The first type is the concurrent investigation, or trade anti-dumping or countervailing cases that cover the same or similar type of imports of goods from two separate countries and are investigated at the same time. The second type is the recently completed investigation, which is defined as a completed investigation in which the United States International Trade Commission (ITC) has given an affirmative definition in a case involving the same or similar category of imports. of goods from another country in the last two years. These mechanisms created by the legislation would prejudice parties — including U.S. importers — who were not involved in past cases involving other locations and could potentially prevent a full review of the facts. For example, the successive investigation program shortens significant timeframes in an anti-dumping/countervailing investigation — timeframes that are already extremely difficult for US importers to meet — to adequately demonstrate to US agencies that dumping or unfair subsidization is not not occur, or occurs at a lower rate.
US tariffs have risen dramatically in recent years. Many U.S. manufacturers and retailers are already subject to increased costs from new tariffs, including Section 232, 201 and 301 duties, expired trade preference programs and the growing number of AD/CVD orders (624 in at least 66 different countries). Over the past two years, the United States has imposed 51 new anti-dumping orders and 43 countervailing orders. In fiscal year 2020 alone, $18.2 billion of imported goods were subject to anti-dumping/countervailing orders. As a result, the proposed legislation would exacerbate current anti-dumping and countervailing duty enforcement and collection problems that are well documented by the US Government Accountability Office.
This legislation would add to this financial burden and impede the global competitiveness of a wide range of businesses in the United States by undermining due process in AD/CVD claims against US importers and entrapping legitimate trade. This would add to inflationary pressures by raising the prices of a wide variety of legitimate imports ranging from industrial inputs to household goods. These rising costs would come at a time when market uncertainty is at an all-time high, as supply chain challenges persist and inflation continues to rise.
In addition, the legislation would compress deadlines, increase deadlines, and limit extensions of AD/CVD procedures in ways that cripple agencies already struggling to meet the deadlines set out in the law. Such stipulations could lead to errors in the decisions made.
Legislative proposals with such broad ramifications should be developed in a regular order, with hearings that allow input from stakeholders representing all segments of the economy, including consumers, as well as responsible agencies. This did not happen in this case.
At a time when Congress is aiming to improve the global competitiveness of American industry and the attractiveness of the United States as a place for domestic and international investment, imposing new tariff burdens on American industry would send exactly the wrong signal. By dramatically raising the prices of a multitude of industrial inputs, this measure will undermine the growth of the innovative, value-added manufacturing industries that the United States should strive to support and attract. Indeed, fostering the growth of these globally competitive industries here in the United States should be one of the primary goals of American policymakers. If Congress were to include this measure in a final legislative package aimed at increasing US competitiveness, the irony would be notable. Reducing the tariff burden would allow businesses to hire more workers, who are currently on the sidelines waiting for more certainty.
We urge lawmakers not to include any aspect of this measure in any final USICA/America COMPETES/Bipartisan Innovation Act legislation that Congress may enact.
American Apparel and Footwear Association (AAFA)
American Clean Energy Association
American Automotive Policy Council (AAPC)
Autos Drive America
Consumer Technology Association (CTA)
Edison Electrical Institute (EEI)
Information Technology Industry Council (ITI)
National Foreign Trade Council (NFTC)
National Retail Federation (NRF)
Retail Industry Leaders Association (RILA)
United States Chamber of Commerce
United States Council for International Business (USCIB)