There’s some good stuff in here! But there are still improvements to be made.
The U.S. House of Representatives on Tuesday night revealed its version of the big, honkin’ industrial policy bill, which the Biden administration is calling for and is meant to bolster America’s competitive footing against the Chinese economy. Now, by the strange alchemy that is the legislative process, it will begin melding with the Senate version passed last year in hopes of becoming law.
When we’ve examined the Senate version, which is largely focused on shoring up domestic production of semiconductor chips, the Alliance for American Manufacturing (AAM) has been broadly supportive of its ideas. But we think there are improvements to be made – particularly around trade enforcement and the rules around how the money in this bill would be spent. There are potentially tens of billions of dollars to be awarded via this legislation to strengthen American industry; all of them should be going to domestic manufacturers and, thereby, American workers.
Luckily, the House version addresses some of those issues. It just came out, it’s a really big bill, and we’re keeping a close eye on a few of its provisions.
So what’s AAM looking at in the House version?
Well, to begin with, the America Competes Act of 2022 (its official House title) makes some significant additions to what the Senate proposes, chief among them being a $45 billion pot of money for a supply chain resiliency fund meant to shore up production capacity of critical goods.
This a good idea, but the details here are quite important! The rules governing the allocation of these funds via grants, loans, and loan guarantees should have clearly defined rules so they’re supporting domestic industry and workers. AAM’s been on this since we testified in favor of such rules before a House Energy & Commerce subcommittee last fall. Here’s AAM President Scott Paul making the case.
There’s other stuff in here as well!
There’s legislation, introduced by Rep. Earl Blumenauer (D-Ore.) that would close a loophole that allows imported goods – as long as they’re valued under a certain amount (the de minims threshold) – to avoid duties, taxes, and fees at the American border. Blumenauer’s proposal would eliminate this waiver for imports from countries with non-market economies. His office points out that the e-commerce business model, in which you’re buying consumer goods directly from manufacturers in places like China, has exploded since the de minimis threshold was raised from $200 to $800 in 2016. AAM is on record saying this legislation is a good idea.
There’s also language in here that would establish a review process meant to divert the offshoring of critical production capacity in a number of key industries. The goal of this part of the bill is to ensure, for example, that the United States is not selling off its ability to manufacture necessary inputs for the power grid or other crucial infrastructure materials to potential adversaries. This part is called the National Critical Capabilities Defense Act, and it’s got lots of bipartisan support in both the House and Senate. AAM has put our support on our official letterhead. You can read it here.
And lastly, there’s another bit of bipartisan legislation that we think is very good idea: Language to tighten trade remedy rules so American industries that win trade cases before the U.S. International Trade Commission don’t have to play legal whack-a-mole when, for example, Chinese steelmakers start routing their exports through third-party countries to avoid the tariffs they’ve earned. It’s a smart, sensible way improve our country’s existing anti-dumping and countervailing duty laws.
This proposal was originally introduced in the Senate last year by Ohio senators Sherrod Brown and Rob Portman, but it didn’t make it into that chamber’s version of the competitiveness bill. However, corresponding House legislation was introduced by Rep. Terri Sewell (D-Ala.) and Rep. Bill Johnson (R-Ohio) in December, and it’s been included in the House version. We hope it makes it into the final bill.
Those are just a handful of the items that will be debated when the House and Senate start conferencing and ironing out the significant differences in their bills. We’re going to be watching closely as it unfolds.