Two letters in the same day urge the Biden administration toe a hard line on trade and manufacturing policy.
Everybody loves a good congressional duo. This one wants strengthen rules against Congressional insider trading. This one is trying to pass legislation to bring insulin prices down. Another is working on breaking up Big Agriculture:
The duo I’m keeping my eye on, however, is Tammy Baldwin (D-Wis.) and Mike Braun (R-Ind.). Last week, these senators sent a pair of letters to the Biden administration about concerns over trade and domestic manufacturing policies.
Weighing in on PPE manufacturing
The first letter was sent to Commerce Secretary Gina Raimondo on behalf of domestic manufacturers of N95 respirators – the kind we needed but didn’t have when the Covid-19 pandemic kicked off two years ago.
Single use medical equipment manufacturers throughout the country have alleged in media reports that Chinese-made products, including masks, such as including N95 respirators, and single-use instruments for joint replacement are being sold into the U.S. market for less than the cost of production. …
This unfair competition is putting significant financial pressure on American manufacturers, driving many out of business, and threatening, for example, our ability to scale up the production of high-quality masks, such as N95 respirators, in the event of a new variant. The pressure from imported Chinese masks is so detrimental to domestic mask manufacturers that they are unlikely to have the resources to spend the significant time and money needed to submit a petition to the Commerce Department for an investigation into Chinese mask and meltblown imports.
Emphasis added, because the senators suggest a solution: Commerce, which is the branch of the federal government responsible for policing these trade claims, should self-initiate an investigation into Chinese mask imports. A self-initiated case is rare but it does happen: It dug into aluminum imports in 2017, corrosion-resistant steel in 2019 and quartz-surface products in February of this year.
Are unfairly subsidized Chinese mask makers dumping their products into the American market? If so, it could swamp progress made at building out a domestic manufacturing base for important medical supplies like these. Again, threadbare production capacity for these items was a huge problem early on in the pandemic. Enforcing trade rules is clearly a part of building out industrial resiliency before the next crisis (or coronavirus variant) arrives.
Pushing for tighter Buy America laws
The other letter – sent on the same day! They’re keepin’ busy! – highlights Baldwin and Braun’s concerns over waivers the Biden administration has granted to the expanded Buy America procurement rules that were included in the bipartisan infrastructure legislation that passed last fall. The waivers, the pair argue, are definitely not in the spirit of the legislation, which is now law.
While this legislation did provide standard flexibilities for implementation, Congress clearly intended for any blanket waiver authority to be used sparingly, only in the most targeted of instances. The IIJA provided six months for federal agencies to adjust policies and guidance to comply with these new requirements. Additionally, April 2022 guidance from the Office of Management and Budget generally followed this intent by providing waivers be time-limited, targeted, and conditional. …
A proliferation of public interest waivers without a thorough and accurate justification serves only to remove the incentive for manufacturers to invest in U.S. capacity. We understand that ongoing supply chain constraints will present implementation challenges, but that is precisely why Congress provided narrow waiver authority to overcome short-term market limitations and allow projects to proceed without delay.
The Alliance for American Manufacturing, in case you haven’t heard, is very much in favor of expanded Buy America coverage, as we see it as a commonsense way to strengthen domestic manufacturing capacity. We like them at the state level, and we were thrilled to see them expanded at the federal level in that infrastructure bill.
The Biden administration has been a strong proponent of these rules, and the president himself has been a strong advocate, and the Biden administration has put considerable effort into implementing them, even going as far as to create Made In America Office within the executive branch to coordinate their administration and track their performance.
That said: Too many waivers to these newly passed domestic procurement rules is indeed against the spirit of the law, and senators Baldwin and Braun are right to stick on this issue. Accountability is important! And we’re glad they’re paying attention to it.