NCTO Calls Republican de Minimis Bill 'a Step Forward'

National Council of Textile Organizations CEO Kimberly Glas, speaking at a left-of-center think tank on trade policy, said that companies need to be able to file antidumping and countervailing duty cases without having to wait so long and pay so much money.

"You have to prove to the United States government that you’ve been injured" to get a trade remedy, by showing that your domestic production is losing market share, and cutting jobs. "That seems insane to me," she said.

She praised a recent report on trade with China from the Center for American Progress, which said the government should have "authorities to manage trade in strategic sectors without the need to demonstrate injury."

The report didn't say what those sectors are, but said petitioners should be allowed to use "new types of evidence to demonstrate the threat of import competition (such as projections of potential damages) or by allowing firms in the supply chain of a larger original equipment manufacturer to request trade protection if subsidized imports of a finished good will hurt their ability to sell component parts to manufacturers in the U.S. market."

Glas said that China is ramping up some of its predatory trade practices, and the U.S. needs to be sure its trade remedies are modernized, and said there have been bills introduced that would do that. She didn;t name them, but unions support the Level the Playing Field Act 2.0 and the Fighting Trade Cheats bills.

Glas also argued that "we should get rid of trade loopholes that give China a free trade deal with the United States."

She said that de minimis packages facilitate the entry of goods made with forced labor, and said the packages face "no scrutiny."

The July 15 webinar's moderator noted that the U.S. imported $4 trillion worth of goods last year. According to CBP estimates, de minimis is projected to cover $65.8 billion worth of imports in the current fiscal year.

"How important is a $200 package," asked CAP Senior Fellow Dave Rank. "Why is de minimis high on your list?"

Glas said de minimis is facilitating the import of dangerous products, such as goods made with toxic materials, pill presses and illegal drugs, in addition to goods made with forced labor.

"This is the most archaic trade law that exists," she said. She noted that CAP called for closing the de minimis loophole.

"It undermines everything we’re trying to do in terms of free trade agreements," she said, in terms of using the carrot of market access to improve labor standards with partners. "This needs to be abolished completely."

She said the administration can tackle it, but Homeland Security Secretary Alejandro Mayorkas said last week that it cannot, though it supports action in Congress.

"Our industry has lost eighteen plants in nine months," she said.

Rank asked Glas if the bill that moved in the House Ways and Means Committee could pass Congress by the end of the year. That bill wouldn't allow goods subject to Section 301 tariffs or other special actions to qualify for de minimis, and would require 10-digit Harmonized Tariff Schedule codes on all low-value shipments. It didn't receive any support from Democrats on the committee; the top Democrat on the trade subcommittee wants to exclude all Chinese-origin goods from de minimis.

Glas replied: "My Washington crystal ball has been broken for a while," though she noted that House Speaker Mike Johnson, R-La., said recently he wants to include action on de minimis in a China bill.

Glas had just spoken disparagingly of half-measures -- "if there’s trade that’s out of control you don’t just throw a garden hose at a wildfire, you get rid of it until you can find a system that works for the American people," she said. However, when asked specifically about this proposal, she said there are a lot of products that don't have a Section 301 tariff, and it would not solve all the problems of the textile industry, but her members say it is "a step forward."

Glas noted that the bill that has been introduced in the Senate to restrict de minimis wouldn't allow any goods of Chinese origin to qualify. She said, "This is a very active discussion. Everybody’s talking about de minimis as a problem, but I don’t think everybody's coalesced around a solution."