Tai Says Decision on Section 301 Tariffs, Exclusions Will Come This Year

But when Senate Finance Committee Member James Lankford, R-Okla., followed up during a May 12 hearing on the Biden administration's trade agenda, Tai did put somewhat of a deadline on the China review. Lankford was asking when the administration would decide if Section 301 exclusions would be offered again. "I know there is a lot of desire for us to act quickly. We definitely feel that pressure," Tai said. Lankford pressed about when the review would be over, asking: "July? December? Next July?"

"December would be way too late," Tai said.

Nearly all the Republicans on the committee complained about the administration's announcement that it would agree to a temporary suspension of intellectual property rights for COVID-19 vaccines at the World Trade Organization, as did Sen. Bob Menendez, D-N.J.

Sen. Pat Toomey, R-Pa., was one of the most passionate critics, calling the decision "just completely wrong," and saying he can't believe the U.S. government has spent so much time and energy trying to prevent China from stealing intellectual property, and now it's ready to just give it to them. He said pharmaceuticals is one of the most important industries in America.

"It’s likely that this will never take place," he added. "Germans understand the value of intellectual property. We may be able to count on the Germans to save us from ourselves."

Chairman Ron Wyden, D-Ore., told Tai that he hears from a senator nearly every day about Section 232 tariffs, and the need to modernize the provision that allows the president nearly unlimited power to tax or limit imports on a national security rationale. "The steel and aluminum tariffs ... have really roiled our economy but were necessary to address a global overcapacity problem, driven primarily, but not solely, by China," Tai said, and said her predecessor did the best he could given the tools he had. She said that tensions caused by this trade remedy could have been avoided if there were 2021 tools to address overcapacity, rather than retrofitting a 1962 tool. She said she is working to coordinate with allies on how to address overcapacity, which she said "should be a shared interest."

While it's true that countries were offended by being labeled a national security threat, it's far from clear that they agree that it's better that commodity steel and aluminum be more expensive, by imposing trade remedies in their own countries to block exports from countries suspected of subsidizing the products, or processing subsidized imported commodities. "These talks will take time," Tai said.

Menendez asked Tai if she would extend the four-month pause in tariffs on European food and beverages if the Airbus-Boeing dispute is not resolved in two months. Tai didn't say she would. She said, "We are very serious about this four-month deadline. We really need to get these disputes resolved."

Several Republicans asked her when she would rekindle trade agreement negotiations started by the previous administration with Kenya and the United Kingdom. Ranking Member Jim Crapo, R-Idaho, asked her if she could commit to any timeline. "First we need to get through the pandemic," Tai said, though she also said that "trade is not on the back burner."

Tai told Sen. Rob Portman, R-Ohio, "We want to think through how we devise this agreement, so it supports the significant domestic investments the President wants to make with Congress."

She told Republicans she understood that expanding market access for American exporters is important, but she also sympathized with free trade critics during the more-than-two-hour hearing. Sen. Bob Casey, D-Pa., told her that U.S. policymakers have had an obsession for cheap goods for a long time while ignoring the conditions under which those goods were produced.

Tai replied, "You’ve put your finger on it completely. For a very, very long time our trade policies have driven protections and standards for workers and the environment lower and lower."

A number of senators brought up the high cost of lumber, and asked her about the role of trade remedies against Canadian lumber in driving prices through the roof.

Sen. John Thune, R-S.D., told Tai he's hearing from builders that they're slowing the pace of new construction because of the high costs, and they're asking about those tariffs. He asked if the administration would prioritize a new softwood lumber agreement with Canada. Until 2015, Canada agreed to voluntary export restraints in times of low to moderate demand, but when prices rose above a certain level, Canada was allowed to increase its exports to keep prices stable. In exchange, the U.S. refrained from countervailing or antidumping cases against Canadian lumber.

Tai replied, "Thus far the Canadians have not expressed interest in engaging."

Sen. John Cornyn, R-Texas, called for a renewal of the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill, and, like several Republicans, said the U.S. should negotiate some version of the Trans-Pacific Partnership. Sen. Tom Carper, D-Del., also pushed for a return to an updated TPP.

Tai said that if there were broad bipartisan support for a multilateral Asian trade agreement, the administration would go for it. But she cautioned that whatever that new agreement would look like, it should "not allow for free ridership of what we put together with our partners," which suggests that if goods are included, the rules of origin would have to be tighter than those in TPP.

Sen. Catherine Cortez-Masto, D-Nev., again brought up the safeguard tariffs on solar panels, saying that while she recognizes that solar panel manufacturers' interests have to be balanced with what's beneficial to installers, she wants assurance that the administration is considering utilities' and installers' interests, not just panel manufacturers'.

"Yes, absolutely we hear from both sides, both from the stakeholder community and from members of Congress," Tai said, saying that it is a balancing act.