Former Government Officials Discuss What Biden Will Mean for Section 337, Vietnam 301, Existing Tariffs

Although President-elect Joe Biden has said he wants to focus on domestic issues before turning to trade, Brian Pomper, a former chief international trade counsel when the Senate Finance Committee was controlled by Democrats, said he's going to have to deal with trade right away if the Trump administration imposes tariffs on France on Jan. 1 over its digital services tax proposal.

Pomper, now at Akin Gump, also said he expects the renewal of the Generalized System of Preferences benefits program to linger into the next administration, because, he said, Democrats oppose a clean renewal. They would prefer to update the eligibility criteria, he said, and noted the bill introduced in June that would add women's rights (see 2006220039), adding that they may want to add environmental or labor provisions, too. The GSP program already requires that countries “have taken or are taking steps to grant internationally recognized worker rights (including collective bargaining, freedom from compulsory labor, minimum age for employment of children, and acceptable working conditions with respect to minimum wages, hours of work, and occupational safety and health); and implement their commitments to eliminate the worst forms of child labor.”

Although Biden has been a critic of attacking allies with tariffs, Pomper said reversing Section 232 tariffs or Section 301 tariffs is “not as easy as snapping your fingers,” because there are domestic interests in preserving some tariffs, including unions for the steel tariffs. Pomper and other former government officials were speaking Nov. 12 on a Washington International Trade Association webinar on what to expect on trade in a Biden administration.

Nasim Fussell, who was chief international trade counsel at the Senate Finance Committee until earlier this year, said, “I think trade remains a rather contentious issue.” Now at Holland and Knight, Fussell said how Senate Republicans will respond to Biden's trade priorities will depend on whether “he goes all in on tariffs.”

She said there is a “pent-up tension” among Republicans who don't like tariffs, but didn't have “as much political leeway” to express those views when Donald Trump was leading the party. She said that if Biden makes “choices that put importers in a further bind in a time of economic headwinds, I think there will be a level of comfort speaking out. I don't think there’s a lot more room to give here.”

“I don’t think it’s going to be a 180-degree shift back to the traditional Republican orthodoxy,” she said, as there's bipartisan agreement on the need to confront China on trade. But she said she could see a “120-degree shift.”

Pomper said that when he worked in the Senate, Biden was a senator, and he was a leader in foreign policy, not on trade. “He will think about it through the prism of foreign policy,” he said. “The president-elect’s instincts are much more multilateral. That doesn't mean that the Biden administration wouldn’t take unilateral strong action.”

King and Spalding's Stephen Vaughn, former general counsel at the Office of the U.S. Trade Representative under Trump, said he thinks the atmosphere has changed: He believes that diplomats who say action shouldn't be taken to punish trading partners because that country has geopolitical importance can no longer win the arguments time after time.

“We have lost five million manufacturing jobs,” he said. “If the U.S. is swallowed by worker rage, we’re not going to be much of an ally to anybody.”

Former Deputy USTR Robert Holleyman, who served during the second Obama administration, agreed that Vaughn had a point, and said the Section 301 investigation on Vietnam's currency manipulation will be an early test of how Biden balances these views in his administration. Holleyman, now at Crowell and Moring, said he hopes that the Section 301 process doesn't result in tariffs, but instead jump-starts negotiations with Vietnam.

Holleyman said a lot of focus is on how new leadership at USTR would act, but that the trade community should watch appointments to the International Trade Commission. He said he always knew Biden to have a keen interest in the problem of counterfeits and intellectual property violations, and said there might be more expansive use of Section 337.