USCIB Submits Comments on China 301 Tariffs

Tariffs of 10-25 percent are contemplated
Negative impact could exceed actual harm from Chinese trade abuses

On September 6, USCIB submitted extensive comments on the Trump administration’s proposed $200 billion list of tariffs on imports from China, following up on earlier submissions in response to the quickly escalating trade conflict between the United States and China.

“USCIB and its members continue to be very concerned about the potential unintended consequences these proposed tariffs of 10 or 25 percent on $200 billion worth of Chinese imports are likely to have, affecting many sectors vital to the U.S. economy and jobs,” the USCIB statement said. “Particularly if [the U.S. Trade Representative’s office] imposes 25 percent tariffs on this broad list of products, these tariffs will impact consumers and will severely impact U.S. competitiveness. The negative impact of such tariffs to U.S. consumers and industry appears disproportionate to the intended purpose.”

The statement said that, while China’s forced technology transfer requirements and other abusive practices harm U.S. competitiveness, the administration’s “sweeping tariffs endanger the U.S. economy in similar ways.” USCIB said its members are “very concerned that these proposed tariffs will stifle the U.S. economy, and not achieve the important goal of changing China’s behavior.”

The statement also recommended a number of changes to the list of tariffs being proposed by the administration. USCIB also signed on to a broader industry statement appealing to the Trump administration not to proceed with the proposed tariffs, saying the effort would likely backfire against U.S. businesses and workers.

In August, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl provided testimony to the 301 Committee chaired by the U.S. Trade Representative’s office, expressing concern about the proposed tariffs’ potential unintended consequences.

USCIB Expresses Dismay at Uncertainty Over NAFTA

Washington, D.C., August 31, 2018 – The United States Council for International Business, which represents America’s most successful global companies, released the following statement regarding today’s announcement on modernization of the North American Free Trade Agreement:

USCIB has consistently stated that any NAFTA modernization must include all three countries. We are therefore disappointed to see the Administration notifying Congress of the conclusion of a trade agreement with Mexico that does not include Canada. As we and others in the business community – as well as other stakeholders and many in the Congress – have expressed on numerous occasions, the value of NAFTA is in its trilateral nature. The indication that Canada is an optional participant is extremely discouraging. We urge the Administration to pursue a final, modernized, comprehensive and high-standard NAFTA that includes Mexico as well as Canada, providing new and updated benefits to American businesses and workers.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of several leading global business bodies, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, USCIB
+1 212.703.5043, jhuneke@uscib.org

USCIB Statement on Announcement of U.S.-Mexico Trade Deal

Washington, D.C., August 27, 2018 – The United States Council for International Business (USCIB), which represents America’s most successful global companies, released the following statement on the U.S.-Mexico trade deal announced today:

“USCIB is encouraged that the Trump Administration and Mexico have reached an agreement in principle to modernize NAFTA. Updating the 25-year-old agreement has been a priority for the U.S. business community. We look forward to seeing the details of the agreement and if they effectively address our members’ key issues and concerns. In this regard, we are troubled by indications that certain investor protections have been removed or reserved only for specific sectors.

“More broadly, we hope that an agreement on NAFTA signals a redirection of U.S. trade policy – away from confrontation and toward cooperative efforts to open markets abroad. Our members, and the American economy, prosper when we are tearing down barriers to cross-border trade and investment, not erecting new ones.

“We and our members are also very committed to the fundamental structure of NAFTA as a single trilateral agreement. We are looking forward to a completed, comprehensive, trilateral NAFTA modernization that addresses all of our issues and includes Canada.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, VP Communications
+1 212.703.5043 or jhuneke@uscib.org

Congress Sends Revised “CFIUS” Foreign Investment Rules to President for Signature

USCIB was very pleased to see both houses of Congress adopt (the House on July 25 and Senate a week later on August 1) as part of the compromise Conference Report on the overall 2019 “John McCain” National Defense Authorization Act (“NDAA”), some fundamental long-gestating revisions to the Committee on Foreign Investment in the U.S. (“CFIUS”) process for U.S. Government review of foreign direct investment (FDI) into the U.S.

Over the last year, Congress, the Administration and key stakeholders, including USCIB and the broad U.S. and international business communities, have been debating a wide range of potential major reforms to CFIUS.  Senator John Cornyn (R-TX) and Representative Robert Pittinger (R-NC) have taken the lead with their Foreign Investment Risk Review Mechanism (“FIRRMA”) bill but a wide range of possible revisions and reforms have been put on the table by various players on the Hill and beyond.

“Some of the proposed ‘reforms’, especially the idea that CFIUS should dramatically expand its remit to cover outward investment, joint ventures, licensing deals, and other innovative partnerships, were very troubling to us at USCIB and many member companies,” noted USCIB Vice President for Investment and Financial Services Shaun Donnelly. “USCIB and others in the business community raised fundamental objections to some of those more expansive proposals.”

In the end, according to Donnelly, the compromise “FIRRMA” provisions hammered out and included in the NDAA package seem a fair balance, strengthening CFIUS’s security overview of sensitive investment proposals, especially those in sensitive emerging technologies which also maintaining America’ commitment to open investment policies.

Donnelly endorsed the compromise FIRRMA provisions, stating, “We at USCIB commend the Congress and the Administration for the serious approach they’ve taken to these important investment security issues. We especially appreciate that the Treasury Department, other agencies, and many players in the Congress have all been open to a real substantive dialogue with business and other stakeholders on fundamental issues on investment security and business practices. We think they got the balance about right in the final compromise package, which is not easy.”

Joint Statement by USCIB and ICC-UK on Enhancing Cross-Border Trade and Investment

London and New York, July 16, 2018 – The United States Council for International Business (USCIB), which serves as the American national committee of the International Chamber of Commerce (ICC), joined with its British counterpart ICC-United Kingdom in issuing the following joint statement today:

“On behalf of our respective business members, USCIB and ICC-UK pledge to work together to deepen commercial and diplomatic ties between our two countries. We will do so in solidarity with the worldwide business community represented by the International Chamber of Commerce network, and in the context of support for stronger multilateral rules and institutions, from which our societies derive tremendous benefits.

“We call on our two governments to also work together – and with other leading nations and regional blocs – to reduce barriers to trade, de-escalate recent actions to increase tariffs in many areas, and take action through the World Trade Organization and other international institutions to improve the climate for cross-border trade and investment.

“Our economies face critical barriers to entry and commercial challenges in key markets. We must address these together, in a spirit of common purpose, and with the understanding that concerted international action, rather than unilateralism, is the best approach. Failing to do so will harm not just our own national competitiveness, but the world’s ability to tackle key common challenges of promoting security and development.

“We further pledge to work together at the United Nations, World Trade Organization and G20 to improve the global business environment benefitting all companies of all sectors and sizes. We will focus on:

  • Championing inclusive free trade, robust international institutions and multilateral rules.
  • Supporting trade in goods and services through open borders, simplified customs, fair and modern tax and IP systems, and free movement of data.
  • Promoting responsible business conduct and good governance through self-regulation and improvement of best practices.
  • Championing sustainable economic growth through the implementation of the Paris Climate Accord, sustainable finance, smart cities and sustainable supply chains.

“We make this pledge as the International Chamber of Commerce prepares to mark its centenary next year. Founded as the “merchants of peace,” out of the ashes of the First World War, ICC continues to play a critical role in bringing the view of the private sector to the attention of governments at the highest levels, and in forging a path for business to lend its critical support to global goals of peace and sustainable development.”

About ICC-UK:
The International Chamber of Commerce (ICC) is the largest world business organization representing 6.5 million companies in 130 countries. ICC provides a voice for business at inter-governmental level and is the only business organization with UN Observer Status. ICC United Kingdom is the representative office of ICC in the UK, supporting British business interests and working in partnership with UK business groups and government. ICC has three central functions: 1) Promote responsible free trade; 2) Provide the rules and standards that govern international business; and 3) Help companies and States settle international disputes. More at www.iccwbo.uk.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:
Jonathan Huneke, VP Communications
+1 212.703.5043 or jhuneke@uscib.org

USCIB Joins Coalition to Urge Congress to Curb Trump Tariffs

USCIB joined more than 270 national associations and state and local chambers of commerce to send a letter on June 26 in support of the Corker Bill (S. 3013), which would require President Donald Trump to submit to Congress any proposal to raise tariffs in the interest of national security under Section 232 of the Trade Expansion Act of 1962.

“The U.S. business and agriculture communities are deeply concerned that the President’s unrestricted use of section 232 to impose tariffs may not be in the national interest,” the letter states. “It is now also increasingly clear that the way the steel and aluminum tariffs have been used will result in retaliatory tariffs from our largest trading partners and closest allies, and that retaliation will have serious negative economic impacts on the United States. The tariffs are also undermining U.S. efforts to build an international coalition of like-minded countries to join the United States in combating the use of unfair trade and investment policies.”

Eva Hampl, USCIB senior director for investment, trade and financial services added, “USCIB strongly supports a more competitive America, which enjoys economic growth and jobs by increasing exports, opening global markets and securing a level playing field for our goods and services. The imposition of tariffs will lead to higher prices for U.S.-made products, reducing the competitiveness of our exports, and will probably eliminate more jobs than it saves. In addition, it is likely to create strong disincentives for foreign investment in the United States, and to spur higher inflation.”

USA Today recently published an article about the letter.

USCIB Statement on U.S. Withdrawal From the UN Human Rights Council

U.S. Ambassador to the UN Nikki Haley (credit: U.S. Mission to the UN)

New York, N.Y., June 20, 2018 – The United States Council for International Business, which represents the views of the American private sector to major multilateral organizations, international forums and national governments, issued the following statement regarding the U.S. decision to withdraw from the United Nations Human Rights Council as well as the separation of families at the southern border:

“We are disappointed that the United States has chosen to withdraw from the UN Human Rights Council (UNHRC). While we agree with the Administration and Ambassador Nikki Haley that the Council is badly in need of reform, this can only come about through continued, direct and vigorous engagement by the United States, working with allies, civil society groups and representatives of the private sector.

“We urge the United States to reconsider this decision. In the meantime, USCIB and its global business partners will continue to represent the views of the private sector on matters affecting American business in the UNHRC and other international forums. USCIB will also continue its cooperation with the Administration to represent U.S. business interests on social and human rights issues across the United Nations system, including in the ILO.

“USCIB members are strongly committed to human rights. We will continue to advocate for both governments’ duty to protect and corporate responsibility to respect human rights, in line with the UN Guiding Principles on Business and Human Rights.

“Lastly, especially in the context of U.S. withdrawal from the UNHRC, harmful U.S. action to separate children of illegal immigrants apprehended at our southern border from their families is contrary to American values. Such troubling practices at home risk calling into question U.S. leadership and dedication to upholding human rights. We are hopeful that President Trump, as he has pledged to do, will address this issue via executive order and reunite these families without delay.”

About USCIB:

USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world, generating $5 trillion in annual revenues and employing over 11 million people worldwide. As the U.S. affiliate of the International Chamber of Commerce, the International Organization of Employers and Business at OECD, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.

Contact:

Jonathan Huneke, VP Communications

+1 212.703.5043 or jhuneke@uscib.org

 

USCIB Expresses Concern Over China 301 Tariffs

In light of last week’s release of two lists of China 301 tariffs by the Trump administration, USCIB Senior Director for Trade, Financial Services and Investment Eva Hampl expressed concern about the impact the China 301 tariffs will have on the U.S. economy and jobs. “In our submission to the U.S. government we highlighted a number of products of particular concern to our members, for which tariffs would have a significant effect on U.S. production and revenue. Unfortunately it appears that only a handful of consumer products were taken off the list. We are also reviewing the new list of products, and welcome the opportunity to provide input as appropriate. We are, however, troubled by the planned investment restrictions to be imposed on Chinese investments in technology later this month, where stakeholder input is not taken into account. Given the significant impact investment restrictions could have on U.S. companies and jobs, this move by the Administration is problematic.”

The first list of China 301 tariffs was a reduced version of the 1,300 tariff lines USCIB commented on in May. This list of tariffs on about $34 billion of Chinese products is set to go into effect on July 6. The second list, covering about $16 billion of Chinese goods, are products that were suggested to be added. That list will be up for a comment period, with a public hearing to be held in late July. The Federal Register Notice is not yet officially out.

“China is ready to retaliate,” warned Hampl. China has apparently reduced their initial $50 billion list to $34 billion to match what is currently the U.S. tariff list – the Ministry of Finance has apparently posted the list.

Hampl was also quoted earlier today in Politico. Full article is available here, subscription required.

Herzog Leads US Employer Delegation to ILO Conference

2018 International Labor Conference. Photo Credit: ILO

USCIB Vice President for Corporate Responsibly and Labor Affairs Gabriella Rigg Herzog led a five-member U.S. Employer delegation to the 107th annual International Labor Conference (ILC) of the International Labor Organization (ILO) May 28 – June 8. The ILC is the ILO’s annual policy setting meeting at which global representatives of national governments, employers and workers gather to negotiate and adopt policy and governance on a range of priority issues.

This year’s ILC was attended by over 5,000 participants from across the world, of which 32.7% were women. “Important topics discussed by delegates this year included the role of the ILO in carrying out development cooperation programs in light of the new UN Sustainable Development Goals, and what constitutes social dialogue in the workplace and what value can it deliver to industrial relations and productive workplaces,” noted Herzog. The ILO’s Committee on the Application of Standards also met to review in detail 24 cases of governments alleged to not be effectively enforcing a range of ILO standards they had ratified and committed to implement. Without a doubt, however, the topic at the top of this year’s ILC agenda was the first round of a two-year standard-setting discussion on violence & harassment in the workplace.

“The challenge and the opportunity for the ILO and its tripartite constituents is how to develop an instrument that can protect the most people, with special focus on gender-based violence and harassment, in the most places in the world,” stressed Herzog. “This will be a challenge because while violence in the workplace is broadly understood and condemned, there is less universal understanding and consensus around the world on what constitutes harassment. Given this and the growing realization of the prevalence and negative impacts of these unacceptable behaviors, USCIB and global employers are and will continue to work to address these practices where they appear and also push for an effective instrument addressing this issue at the ILO.”

While there was consensus among the government, employer and worker representatives on the need for ILO action, there was unfortunately lack of consensus on core definitions that will determine the ultimate effectiveness of the instrument and its chances to interest governments in ratification. Unfortunately, vague and contested definitions for foundational issues like what constitutes violence and harassment, who is a worker, what are the boundaries of a workplace, and the behaviors from which workers should be protected were adopted. The problems with these overly broad definitions began to become clear to some of the participants when discussions turned to operationalizing the responsibilities of governments and employers.

“USCIB – together with our members and IOE’s global affiliates – will work hard over the coming year to meaningfully engage tripartite ILO partners with an eye towards a refresh in 2019 and a hopefully more balanced text that is both bold in its aspiration but practical in its direction to governments on the important task of working to eliminate both violence and harassment from the workplace,” said Herzog.

Herzog gave remarks at the closing ceremony in support of the IOE violence and harassment spokesperson. Her full speech can be found here, and below.

Hampl Testifies Regarding Proposed China Tariffs

 Following the Trump administration’s proposed Section 301 tariffs on Chinese goods, USCIB Senior Director for Investment, Trade and Financial Services Eva Hampl testified before the Section 301 Committee, chaired by USTR on May 16 regarding the proposal. Hampl’s testimony reflected USCIB member concerns about potential consequences the proposed tariffs will have on sectors vital to the U.S. economy. Her testimony was drawn from comments USCIB sent earlier this month to the U.S. Trade Representative Robert Lighthizer. Hampl was joined by over 100 other business representatives to share specific concerns regarding the proposed tariffs.

“We believe that the imposition of tariffs will not achieve the important goal of changing China’s behavior in the space of emerging technologies and intellectual property rights,” said Hampl in her testimony. “China’s threat of retaliation further exacerbates uncertainties caused by this proposed action. Rather than create more opportunities for U.S. business, sweeping tariffs will stifle U.S. agriculture, goods, and services exports and raise costs for businesses and consumers.

Hampl emphasized the need for a “holistic structure” to address the aforementioned issues. Speaking on behalf of USCIB, Hampl applauded the Trump administration for looking at alternative approaches, such as initiating a WTO dispute by requesting consultations with China.

“It is important for the administration to address these issues with a broad view, working collectively with U.S. industry, Congress, and our trading partners, to adequately address China’s unfair trade practices and get China to be WTO compliant,” noted Hampl.

The proposed tariffs pose a unique challenge to industrial inputs, which represent over 80 percent of the proposed list. Tariffs on industrial goods are especially problematic because they represent not just a tax on U.S. consumers but a tax on U.S. manufacturers and workers, and on the products they export. Tariffs on aerospace, machinery and IT parts and other advanced technologies can undermine the most competitive sectors of American manufacturing, driving up production costs in the U.S., impacting U.S. manufacturing employment, and making U.S. manufacturers less competitive against global rivals.

“Tariffs on industrial parts imported into the U.S. could have the unintended consequence of prompting manufacturers to move final production outside of the U.S.,” warned Hampl. “To see how U.S. companies will be affected by the tariffs, it is important to look to how the supply chain functions. China is the second largest economy and the largest manufacturing economy in the world. We cannot ignore that China may have some unique capabilities, at the product level, that U.S. businesses need to tap into in order to remain globally competitive. For many products or inputs, there is no feasible alternative to procuring from China. We urge the Administration to use this process to ensure that its actions do not inadvertently harm some of the most competitive sectors of the U.S. economy, and the hundreds of thousands of American jobs that depend on them.”

In addition to the testimony, USCIB also co-sponsored a reception last week for Hill staff centered around the China 301 hearing, as well as NAFTA, celebrating Great American Jobs Supported by Trade. Representatives from U.S. government, companies, and associations, spent the evening discussing various important developments in the trade space.