Lee Smith, attorney and leader of the International Trade & Security Practice of the law firm of Baker Donelson, lays out the major trade issues that importers and exporters are likely to encounter in the coming year.
“International trade waters are pretty choppy these days,” says Smith, “and are going to remain so for some time.” The Biden Administration and Congress are addressing trade issues on a number of fronts, requiring businesses to exercise due diligence about the structure and source of their supply chains.
In the last two presidential administrations, national and economic security have become increasingly intertwined, Smith says. The treatment of workers in China’s Xinjiang Province remains a point of tension in U.S.-China relations, and companies need to know whether they’re sourcing materials or products from that region, for everything from cotton to solar cells and semiconductors. One bill pending in Congress would establish the presumption that anything produced in Xinjiang is employing forced labor, but even a less extreme proposal by the Biden Administration could lead to a company being blacklisted or sanctioned for sourcing from there.
The U.S. continues to pursue complaints that China is dumping or protecting materials such as steel and rare earth magnets. China’s policy on intellectual property protection also remains an issue, although Smith doubts that specific concern will lead to additional tariffs on Chinese imports. Some tariffs imposed by the Trump Administration could remain in place for some time, while the Biden Administration could put into place its own set of restrictions.
Smith says the U.S. Trade Representative is making “creative” use of tariffs and dumping complaints to enhance the country’s trade relationships with traditional allies. In the near terms, he adds, such actions are a more likely prospect than the U.S. engaging in prolonged negotiations for joining multilateral trade agreements.
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