New draft text of Congress’ Build Back Better Act budget reconciliation bill includes a tax credit to incentivize advanced semiconductor manufacturing, which would help “strengthen” U.S. supply chains, the Semiconductor Industry Association said Oct. 28. The incentive, included in the reconciliation package released by congressional Democrats Oct. 28, would create an investment tax credit of up to 25% for certain “advanced manufacturing facilities” and a tax credit for certain “eligible components.” The credit would specifically be available for “property for the manufacturing of semiconductors and semiconductor tooling equipment” that begins construction before 2027. The package hasn’t yet received a vote.

Sen. Todd Young, R-Ind., and Sen. Tom Carper, D-Del., told U.S. Trade Representative Katherine Tai that she should talk to Chinese officials about that country's decision to buy medical devices based on the lowest price. The two sent a letter Oct. 26 that said before the volume-based procurement rules came into effect, the U.S. exported $6 billion annually in medical devices to China and imported not much more from China in that category. "The medical device industry employs over 400,000 Americans and pays on average 28% higher wages than other manufacturing jobs. Given the importance of this industry to our country’s economy, we must pursue policies that hold China accountable for deliberate actions that harm our job creators and employees. China keeping the current structure of the VBP in place will have ripple effects in communities supported heavily by the medical device industry and could jeopardize access to life-saving products made through cutting-edge technologies," they said.

Sen. John Kennedy, R-La., reintroduced a bill that would require a review by the Committee on Foreign Investment in the U.S. for all “greenfield” investments made by certain Chinese businesses on U.S. soil. The bill, introduced last week, would specifically require CFIUS to look at any foreign investment that “involves the acquisition of real estate in the U.S. and the establishment of a U.S. business on such real estate” and that “results in China’s direct or indirect control of that U.S. business.” These investments would trigger a mandatory declaration with CFIUS if China’s government has a “substantial interest” in the deal.

Although it's not known what sort of electric vehicle purchase incentives might be included in Build Back Better legislation, Canada and Mexico are arguing to congressional leaders that offering larger tax credits for U.S.-assembled electric vehicles hurts both the integrated North American auto industry and undermines the USMCA.

Eighteen of the 36 Texas representatives in the House and both of Texas's senators asked the new ambassador to Mexico to press Mexico to fulfill its promises on approving agricultural biotech products and to keep Mexico's oil industry open to foreign investors. In an Oct. 19 letter, they wrote: "Texas farmers and ranchers have long benefited from free trade with Mexico and Canada. The USMCA locked in key provisions for agriculture and includes state of the art rules on agricultural biotechnology. Rigorous enforcement of these important priorities is vital for Texas producers. Mexico remains the top destination for U.S. agricultural trade -- ensuring that Mexico abides by these commitments remains a top concern for the producers we represent. We also have raised these concerns directly with United States Trade Representative (USTR) Katherine Tai. Proper implementation of the USMCA is a top priority and the U.S. must engage at all levels of government to ensure that the American people can reap the full benefits from this important trade agreement."

The Tariff Reform Coalition, which includes trade associations representing major metal consumers such as automakers, boat manufacturers, the beer industry and machinists, as well as exporters hurt by retaliatory tariffs, sent a letter to senators asking them to support the Section 232 tariff reform bill re-introduced this month by Sens. Pat Toomey, R-Pa., and Mark Warner, D-Va. The Oct. 19 letter, signed by 27 trade groups, said that the bill (see 2110050040) would ensure "that all national interests are taken into account prior to the imposition of tariffs or quotas. These interests were not properly weighed in the case of steel and aluminum and our industries are still reeling from the effects of these tariffs.... Invoking national security as a justification to protect a few industries, to the detriment of countless others, sets a bad example for the rest of the world and opens the door for other countries to take similar actions." They noted that if the bill becomes law, and then if Congress does not approve the steel and aluminum tariffs within 75 days, they would be repealed.

China has retaliated against various countries for political stances, most recently, against Australian wine and barley, and members of Congress would like a more formal approach to reacting to that coercion. So a group of lawmakers introduced the Countering China Economic Coercion Act in the House of Representatives. Rep. Ami Bera, D-Calif., and Rep. Anne Wagner, R-Mo., are the lead co-sponsors, and were joined by two other Republicans and three Democrats. Bera said in an Oct. 15 press release that the bill would "create an interagency taskforce to streamline U.S. tools and mechanisms for deterring and addressing Beijing’s economic coercion and expand cooperation with the private sector as well as U.S. allies and partners on this important matter."

Weak U.S. export controls and licensing policies may have contributed to China's reported development of nuclear-capable hypersonic missiles, Rep. Michael McCaul, R-Texas, said Oct. 18. McCaul said he warned the Commerce Department to place stricter controls on China’s Phytium Technologies -- a company “contributing” to the country’s hypersonic weapons program -- by applying the foreign direct product rule (see 2104150040).

Rep. Byron Donalds, R-Fla., and six Republican co-sponsors introduced a bill in the House last week that would direct the U.S. to impose sanctions on anyone who provides support to someone in Cuba's military, security sector or intelligence sector. The administration could ask for a waiver for 180 days of these sanctions for national security reasons.

Thirteen Republicans in the House of Representatives, led by Rep. Rick Crawford, R-Ark., wrote a letter asking U.S. Trade Representative Katherine Tai to increase trade engagement with countries like Uruguay, Paraguay, Guatemala, Ecuador and Colombia. The letter, sent Oct. 13, noted that while the U.S. is the biggest trading partner of Central American countries and Caribbean nations, China is the No. 1 trading partner off the continent for all but two countries in South America, and in many cases, such as Argentina, Chile and Brazil, their trade with China overshadows trade with their immediate neighbors. In South America, only Ecuador and Colombia buy and sell more to the U.S. than they do to China, and Colombia has a free trade agreement with the U.S.