International trade, particularly U.S. trade with China, has been a dominant issue for the Hardwood Federation for the past several years. As the industry knows all too well, the Trump administration’s tough approach to China and imposition of tariffs on Chinese imports led to retaliatory tariffs on U.S. hardwood lumber and log exports to China – a devastating development for many in the industry. While some sectors benefited from this approach to global trade negotiations, for many others, it has been a tough road back.
Currently, Chinese tariffs on U.S. hardwood are suspended, at least until September 2021. What happens in October is still in question. Attention now turns to the Biden administration and how it will handle China, as well as the rest of the world.
President Biden’s pick for U.S. Trade Representative (USTR), Katherine Tai, is a well-known trade expert in Washington, D.C. She has years of experience within USTR as a senior staff member and most recently served as the chief trade counsel for the U.S. House Ways and Means Committee. In this role, she was key to gaining Democratic approval for the revised United States-Mexico-Canada Agreement (USMCA, previously know as NAFTA). She is well-respected on
both sides of the aisle, and her nomination was approved easily in the Senate by a 98-0 vote.
In comments made during her confirmation hearings, USTR Tai gave every indication that the Biden administration will continue to take a firm line with China. There are no immediate plans to remove existing U.S. tariffs on Chinese goods, and there are indications that the Biden administration will be tougher than the Trump team on issues like the environment and workers’ rights. However, it also seems there are efforts to lower the trade tensions with other global partners. The administration recently announced an agreement with the European Union to suspend tariffs on a number of items, including aircraft, food, and wine that were imposed as a result of disagreements over subsidies provided to Airbus and Boeing. It is reasonable to assume that the administration will work toward compromise where they believe they can, without pulling back on their priority goals.
As required by Congress, the president released his 2021 trade agenda on March 1, 2021. Priorities outlined in the report seek to:
- Address COVID-19 and restore the economy by increasing vaccine production and distribution, ensure that frontline workers have access to personal protective equipment, and increase domestic production of essential medical equipment.
- Ensure that new trade policies and agreements include strong, enforceable labor standards, and commitments to fight forced labor and exploitative labor conditions.
- Include strong environmental standards, consistent with the development of market and regulatory approaches, in trade discussions to reduce greenhouse gas emissions and achieve net-zero global emissions by 2050.
- Understand the projected impact of proposed trade policies on communities of color and consider those impacts before pursuing such policies.
- Develop a comprehensive strategy to combat alleged unfair trade practices by China, including unfair subsidies to favored industries and use of forced labor that targets Uyghurs and other ethnic minorities.
- Partner with global allies to hold China accountable by implementing reforms to the World Trade Organization’s substantive rules and procedures to address inequality, digital transformation, and impediments to small business trade.
- Seek to expand global market opportunities for American farmers, ranchers, food manufacturers, and fishers and to enforce global agricultural trade rules.
- Review existing trade programs to evaluate their contribution to “equitable economic development.” As part of this review, the Biden administration will seek to incorporate corporate accountability and sustainability into trade policies.
- Enforce trade agreements’ labor and environmental standards.
Clearly, this is an ambitious set of priorities, and we will have to work hard to understand the implications for the hardwood industry and develop strategies of our own to make sure we benefit from the administration’s global actions. As always, this will include clear communication of facts to policymakers at all levels. We have already started the outreach process and will continue throughout the year. We will be reaching out to you too, for your help with YOUR members of Congress. So, stay tuned, and be prepared to act. If we all work together, we can make a difference.
Dana Lee Cole is executive director at the Hardwood Federation, a Washington, D.C.-based hardwood industry trade association that represents thousands of hardwood businesses in every state in the United States and acts as
the industry’s advocacy voice on Capitol Hill. She can be reached at dana.cole@hardwoodfederation.com.