With the inauguration of the new administration a little under two months away, the incoming President’s foreign policy team is starting to take shape. For importers and exporters who are wondering what will be carried over from the current administration, there are plenty of issues to deal with including, but not limited to, trade remedy duties, bilateral and multilateral trade agreements, restoration of the WTO and more.
As of this writing, appointments are beginning to be named for key diplomatic and financial posts. Candidates have been named for Secretary of State, UN Ambassador, Treasury Secretary and several intelligence posts.
Positions like Commerce, USTR and DOT have yet to be mentioned. The person named to head DHS will be publicly focused on border and immigration issues, but has a law enforcement background which means we will likely see the same from whoever is tapped to lead CBP, whether internally or externally.
For importers and exporters, there are three key areas to watch that we are recommending our clients pay attention to and prepare for in 2021.
Trade remedy duties: China and the EU
Will the Section 301 duties go away on President Elect Biden’s first day in office? Highly unlikely. The first tranche of those duties were imposed in response to an investigation and finding of China’s treatment of IPR and counterfeiting. Subsequent lists and increased duties were added punitively and List 3 and List 4a are now the subject of cases filed at the Court of International Trade.
The new administration will be tasked in bringing China to the table to negotiate on IPR and counterfeiting as well as fentanyl shipments, human rights violations, forced labor, state-sponsored cyber theft, all but doing away with Hong Kong’s independence and increasingly aggressive posturing in the South China Sea.
The WTO right now lacks an appellate body to hear dueling aircraft manufacturer subsidy cases against Boeing and Airbus. The US imposed additional duties on EU exports that consumers enjoy and just this month, the EU retaliated with duties on $4b in US exports. High on the administration’s international trade priority list should be restoring the WTO to a functioning state so there is a place for adjudication of these disputes.
Trade agreements: Bi-lateral and multilateral
Our RIM Report this month touched on the recently-ratified RCEP that covers 15 nations in Asia and the South Pacific. Combined, these economies and their populations represent 30% of global GDP and 30% of the world’s population, respectively. A contentious election issue four years ago, President Trump early in his term withdrew the United States from the TPP. While not without flaws, a successful ratification of TPP would have forced China to the table for many of the negotiations and discussions that were addressed through antidumping, Section 301 and Section 232 duties that were imposed the past four years. Now the US finds itself on the outside looking in at an agreement that could reduce customs duties by 90% with decades among the member nations.
The Biden administration has also signaled to the Johnson government in the UK that it will not prioritize a bilateral agreement with the UK over a trilateral agreement that involves the US, UK and EU. Taken together, as the clock ticks toward midnight on January 1st for Brexit, the Prime Minister is likely altering his strategy and ask from Brussels as he recalibrates based on the election’s outcome.
Global e-Commerce regulations and shipments
The White House last month published a Memorandum instructing the federal government to develop policy to bring about an end to counterfeiting on e-Commerce platforms. Add a looming January 1st deadline for advance manifest information for shipments coming to the US via mail and millions of packages could be delayed or refused.
RIM logistics operates in Europe, Asia and the United States. Our business, and that of our customers, is inextricably linked to global trade, not just between the US and other countries but between all countries around the world. We will continue to monitor the news and share what we learn that will impact our clients and as always, don’t hesitate to contact us if you have a specific issue you would like researched.