Georgia Republican Sen. David Perdue in an opinion piece and a letter to Senate colleagues criticized House Republicans’ border adjustability tax plan as detrimental to consumers, jobs and economic growth. In the letter (here), Perdue asserted that border adjustment’s “clear effect” would be an increase in consumer prices, thereby putting downward pressure on jobs. In both the letter and the opinion piece in The Washington Times (here), he cited a University of Maryland study (here) estimating that some industries could see 20 percent drops in employment. The referenced study also projects employment gains for big industries, including about 4 percent for food and beverage retailers and between 5 percent and 12 percent for the truck transportation industry. Perdue, the former head of Dollar General, argued in his letter that if border adjustability were to strengthen the dollar by up to 20 percent, the U.S. will still “end up with more losers than winners,” as U.S. investors will see foreign asset values tumble.
Lawmakers recently introduced the following trade-related bills:
The House GOP tax reform legislation with border adjustment provisions could be ready by July and won't include exemptions, House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a Bloomberg interview (here). “I’m not anticipating any exceptions or carve-outs. I want to be very clear there," Brady said. Brady is working closely with industry on the design and transition provisions, he said. Brady also called out companies that advocate current tax policies he says favor foreign products over U.S.-made ones. “That’s not going to work,” he said. “And if they’re going to ask to keep in place incentives to move jobs overseas, that’s not going to be successful either.” Brady’s committee is working on the final drafts of tax reform legislation along with congressional outsiders looking at the broader picture, he said. "I imagine" the bill could be ready "in the first half of this year," though there's no time table, he said.
Lawmakers recently introduced the following trade-related bill:
The House Democratic Caucus approved Rep. Judy Chu, D-Calif., to fill a vacancy left by former Rep. Xavier Becerra, D-Calif., on the House Ways and Means Committee, after he left Congress to serve as California’s attorney general in early January, Ways and Means ranking member Richard Neal, D-Mass., said in a statement (here).
Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., named senators to the panel’s International Trade, Customs and Global Competitiveness Subcommittee, the committee announced (here). Senate Majority Whip John Cornyn, R-Texas, will chair the subcommittee, whose GOP majority will also include Sens. Chuck Grassley of Iowa, Pat Roberts of Kansas, Johnny Isakson of Georgia, John Thune of South Dakota and Dean Heller of Nevada. Sen. Bob Casey, D-Pa., will serve as the subcommittee's ranking member, and will lead Democratic minority Sens. Debbie Stabenow of Michigan, Bill Nelson of Florida and Claire McCaskill of Missouri.
The Senate Finance Committee is drafting waiver legislation to smooth the path for the confirmation of U.S. Trade Representative nominee Robert Lighthizer’s confirmation, following questions of his legal eligibility for the post because of past foreign government representation, committee Chairman Orrin Hatch, R-Utah, said during a brief interview Feb. 6. While at the Skadden Arps law firm, Lighthizer represented the Brazilian Ministry of Industry and Commerce (see 1701250061). The Trade Act of 1974 prevents anyone who represented other governments on trade issues with the U.S. from serving as USTR or deputy USTR.
The Congressional Research Service issued a report (here) on the difference between an import tariff and a border tax, after some media reports used the terms interchangeably to describe late January statements by the Trump administration that it was considering imposing a 20 percent tax on imports from Mexico. The report notes that, while the Constitution assigns tariff authority “exclusively in Congress,” the legislative body “over time” has delegated authority to the president to modify tariffs by proclamation under certain circumstances. Congress has not, however, delegated its taxing authority to the president as it has, to some extent, for tariffs, and a border tax would likely be part of a larger domestic tax reform effort, according to the report. “Accordingly, it appears the President could not unilaterally impose a 20% tax on imports from Mexico,” the CRS said. A Republican source recently said Jan. 26 comments by White House Press Secretary Sean Spicer about Trump administration considerations of taxing Mexican imports to pay for a U.S. wall on the Mexican border are consistent with the House GOP’s border adjustment proposal (see 1701270040).
Nine Democratic senators on Feb. 2 urged President Donald Trump to lift his federal hiring freeze, which is hurting trade enforcement efforts and is worrisome given that several agencies are implementing new enforcement tools as directed in the Trade Facilitation and Trade Enforcement Act of 2015, they said in a letter to the White House (here). “Congress included a directive for more resources to be dedicated to trade enforcement as part of the Act, yet the freeze would have the effect of reducing such resources,” the senators wrote. A Jan. 23 Trump memo (here) ordered a hiring freeze applying to employees at all executive agencies, except for military personnel. Signees, who included Senate Finance Committee ranking member Ron Wyden, D-Ore., and Sen. Sherrod Brown, D-Ohio, reminded Trump that trade enforcement was a central campaign promise. “Freezing hiring for the very agencies that will be essential to fulfilling this objective runs contrary to your own campaign promises and undermines long-running bipartisan efforts to enhance trade enforcement throughout the Federal government,” the senators wrote. “While the freeze presents a host of serious challenges across the federal government, here we would like to focus your attention on its impact on trade enforcement.”
Lawmakers recently introduced the following trade-related bills: