The House of Representatives passed a bill that offers tax credits and grants to semiconductor manufacturers and increases government spending on science research, on a 243-187 vote on July 28. Twenty-four Republicans voted for the bill. Rep. Sara Jacobs, D-Calif., voted present, as her family founded major chipmaker Qualcomm, which will benefit from the bill.
Trade groups that represent semiconductor manufacturers and customers lauded the Senate's passage of incentives for domestic manufacturing, while unions and a union-funded advocacy group both praised the bill and said trade provisions that were not included still need to pass.
Commerce Secretary Gina Raimondo, during a July 24 interview on Face the Nation, said that although some critics of the CHIPS bill say it helps semiconductor companies expand chip production in China due to grandfather provisions, she says the guardrails are adequate.
A centrist think-tank says that red tape at the border costs U.S. exporters more than twice what they pay in tariffs, and says that the U.S. should continue to push for trade facilitation measures. The World Trade Organization passed a Trade Facilitation Agreement, but developing countries did not have to implement it immediately, and even five years after it went into force about 23% of its provisions have not been implemented. Only half of signatories have established a single window, which helps exporters and importers file most documents electronically. The WTO estimated that full implementation would reduce trade costs by 14.3%.
Two technical committees that advise the Bureau of Industry and Security plan to work together on a proposal to create a "trusted exporter" program, similar to the trusted trader program for importers. Sensors and Instrumentation Technical Advisory Committee Co-Chair Jennifer O'Bryan said during a July 26 quarterly meeting of SINTAC that the Regulations and Procedures Technical Advisory Committee wants to work on such a proposal.
Although climate advocate Sen. Sheldon Whitehouse, D-R.I., has hopes of introducing a bipartisan carbon border adjustment tax, he said it may take American exports being hit with carbon border tariffs in Europe to get Congress to move.
U.S. Trade Representative Katherine Tai asked for consultations with Mexico over a 2021 amendment to Mexico's Electric Power Industry Law that privileges the state-owned electric utility, and over 2019 and June 2022 actions that privilege PEMEX, Mexico's state-owned oil and gas company.
Sens. Chris Coons, D-Del, and Todd Young, R-Ind., propose that the adminsitration be able to expedite export licensing decisions and regulatory processes for countries that are facing economic coercion, such as Australia or Lithuania. The recently introduced bill also says Congress should appropriate money for export financing and sovereign loan guarantees and waive some policy requrirements to facilitate export financing. The senators say that the president would need to coordinate with allies and consult wtih Congress about whether a country is the target of economic coercion and what support is appropriate. Any actions would sunset after two years.
Just as the U.S. trade representative declined to continue work toward a traditional free trade agreement with the U.K. begun during the previous administration, current USTR Katherine Tai announced July 14 that trade talks with Kenya will deal with trade facilitation, digital trade, science-based sanitary and phytosanitary rules and rooting out forced labor in supply chains -- not reducing tariffs on either side.
House Majority Leader Steny Hoyer, D-Md., who is a key decisionmaker on what to bring to the House floor, rejected out of hand the Senate minority leader's proposal to bring the Senate China competition bill up for a vote, since negotiations between the House of Representatives and the Senate have stalled.