AAM President Scott Paul, in testimony before the Office of the U.S. Trade Representative, argues that the United States must learn from its past mistakes and pivot to a new era.
The Office of the U.S. Trade Representative (USTR) is holding a marathon hearing on Thursday examining ways for the United States to promote supply chain resilience, and our own Scott Paul called for trade and investment policies that “enhance, rather than undermine, domestic incentives for manufacturing.”
Paul told the USTR team that folks like him have sounded the alarm for decades about supply chain vulnerabilities and the threat posed by “China’s myriad unfair trade practices.” Those warnings largely went unheeded, and things only began to shift thanks to a “global pandemic and massive supply chain chaos.”
Now the Biden administration is taking a new approach with its “worker-centered” trade policy, which Paul described as “refreshing.” But in order to make the new approach work, we’ve got to get the policy right, Paul added. And there’s a lot of work to do, as AAM put forth in written comments. Paul explained:
An overarching theme of these recommendations is the notion that trade and investment policies must work to enhance, rather than undermine, domestic incentives for manufacturing.
Another theme is prioritizing the expansion of all stages of manufacturing in the United States, including upstream inputs that are critical for the completion of final product assembly or manufacture.
A third theme is defending U.S. interests from countries, most notably the People’s Republic of China, that are willing to “weaponize” supply chains to advance their political and security interests to the detriment of others.
Some of the specific policy recommendations laid out by AAM in our written comments include:
- Passing the Leveling the Playing Field 2.0 to address “country hopping” tactics;
- Reforming de minimis rules, which are routinely exploited to evade trade enforcement and Customs inspections;
- Sustaining Section 232 tariffs on steel and aluminum to ensure the strength of these industries, which are critical to national security;
- Continuing Section 301 tariffs on Chinese imports, and, in some cases, strengthening them;
- Suspending or revoking Permanent Normal Trade Relations for China, as recommended by the bipartisan U.S.-China Economic and Security Review Commission;
- Thoroughly investigating China’s shipbuilding and its impacts on U.S. industry in the USTR’s Section 301 inquiry into the sector;
- Fully implementing and enforcing the Uyghur Forced Labor Prevention Act, with additional emphasis on metals and auto parts.
Some of the initiatives put in place to encourage domestic manufacturing and grow supply chains is already paying off, Paul noted. Congress and the Biden administration directed “significant funding” to develop a national charging network for electric vehicles, and coupled that funding with a Buy America requirement. As a result, the U.S. “has gone from having almost no domestic production of EV fast chargers to more than 40 U.S.-based EV charger factories” in a short period of time.
Likewise, the CHIPS and Science Act has spurred a factory construction boom, with huge gains in the number of planned factories for electronics, computers, and semiconductors.
“Producers across supply chains respond to policies set by Congress and the administration. Where strong trade and investment measures are in place, supply chains will be stronger,” Paul said. “Moving forward, it is important to monitor for circumvention and evasion of these measures.”
Check out more from the USTR hearing and be sure to read Scott Paul’s full written testimony.