Blumenauer Says Some Section 301 Tariffs Should Be Dropped

The Trump administration's tariffs caused "a lot of damage to American consumers and business" and "we are no better off" after the phase one deal with China, House Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., said during a Dec. 2 roundtable with reporters. While not arguing that the Section 301 tariffs should be rolled back, he did say there should be an effort to "take them one by one and make some adjustments." He said there could be some Section 301 tariffs that could be changed without it being "politically toxic."

"The mess that Biden inherited takes some time to sort out," he said. He said he thinks stakeholders will support changes to the tariffs if groups that weren't consulted in developing the tariffs are listened to now. He also said that getting refunds for tariff exclusions "in an orderly and timely fashion" would create goodwill, but still opposes proscribing the exclusion process as was done in the Senate China package (see 2106010021).

Blumenauer also addressed the renewal of the Generalized System of Preferences benefits program and the Miscellaneous Tariff bill, which are in the Senate's China package and will be discussed in a conference negotiation between the House and Senate to shape a final bill. The House has only haltingly moved on investing in research to counter China's technology ambitions, and while Blumenauer introduced his version of GSP and MTB renewal, those bills have not had hearings or markups. He said it's necessary for the Senate and the House to negotiate on these matters, so that "we just don't get things dropped on us without an opportunity to have the give and take between the two bodies."

He said those conversations have not begun in earnest. "I don't think we've made much progress since the pronouncement" that the bill would go to conference. Still, he said, "I don't think anybody feels it's a nonstarter."

The top Republican on the Senate Finance Committee, Sen. Mike Crapo, R-Idaho, said recently (see 2112010044) that he wants India's eligibility restored under GSP. Blumenauer said he is open to India returning to GSP, but said he's "deeply troubled" with the human rights violations and treatment of religious minorities in India today. He also said there does need to be some reciprocity in market access, which was the reason India was removed from GSP during the previous administration.

He alluded to the fact that many think Democrats will lose the majority in one or both houses of Congress next November, and said, "I want to get as much out of this [period] as we can."

One of his ambitions is to explore a carbon border adjustment, which he said would work better "if there's some kind of modest carbon fee" domestically. He said that the revenue from that carbon fee would have to be redistributed so that the president's promise that nobody making under $400,000 would have higher taxes could be maintained. He said that carbon dividends could overcome the objections heard during the cap and trade legislative debate. "Devil is in the details, but we ought to take the time to start working through, and having those discussions."

He said that the U.S. will need to work with the European Union on the EU refining its carbon border adjustment mechanism, as well. But he said the U.S. also needs one, "because if we don't have a mechanism like that, we're just going to be overwhelmed with what the Chinese do."

"These may be pipe dreams, but this is where I want to go with the subcommittee," he said. "Things fundamentally are shifting, and I think they're going to shift faster than we think."