After eight months in office, President Joe Biden has yet to significantly shake up his predecessor’s combative trade policies with China.
United States Fashion Industry Association (USFIA) president Julie Hughes lamented this reality Thursday during Sourcing at Magic’s online session “What’s On the Horizon for Trade Policy and Sourcing.”
“After the election and the Inauguration in January, I think many folks thought we were going to see a lot of things very different from during the past four years and that trade policy would be one of them,” Hughes said. “But, unfortunately, from my perspective, the tariffs and the trade wars are not over.”
As president-elect, Joe Biden said he wouldn’t remove the tariffs he inherited from Trump right away, but instead promised to conduct a full review of the Phase One trade deal with China. That process is still ongoing, apparently. “My frustration is we would have hoped by mid-September that the review would be finished, but that is still ongoing,” Hughes said. She likened the current situation to “Groundhog Day,” the 1993 classic in which Bill Murray famously relives the same day over and over.
The apparel industry has repeatedly called for the Biden administration to alter the Chinese tariffs imposed by former President Trump. Just last month, the National Retail Federation (NRF), American Apparel and Footwear Association (AAFA) and Retail Industry Leaders Association, alongside dozens of other organizations, sent a letter to United States Trade Representative (USTR) Katherine Tai and Treasury Secretary Janet Yellen reviving concerns over the ongoing burden of Trump-era China tariffs.
A report published by The Wall Street Journal outlined several potential actions the Biden administration is currently considering, including an investigation into Chinese subsidies, new tariffs, cuts to existing tariffs and the reopening of the exclusion process. At the same time, the USTR’s office is reportedly considering action in response to China’s failure to meet its Phase One purchasing commitments.
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Hughes also highlighted the ongoing migration crisis. Rather than a negative, she framed the current moment as an opportunity to expand Western Hemisphere sourcing, particularly in the Northern Triangle.
“We are definitely engaged in discussions with the administration and with our colleagues in the [Central American Free Trade Agreement] region, Central America and Western Hemisphere, on what might be ways to expand sourcing, create more jobs in the textile and apparel sector that will keep people from traveling to the border, coming to the U.S., because they’re going to have better jobs back at home,” she said.
In the legislature, the Uyghur Forced Labor Prevention Act remains tied up in the House after unanimous approval from the Senate in July. The law would create a “rebuttable presumption” that assumes all products from Xinjiang are made with forced labor—and therefore banned from entering the United States under the 1930 Tariff Act—unless “clear and convincing” evidence demonstrates otherwise. The renewal of the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB) await House approval as well.
Hughes also noted the expiration of the Trade Promotion Authority, a fast-track negotiating tool that would help the Biden administration work out potential trade deals, including with the United Kingdom and Kenya.
“Congress will need to approve Trade Promotion Authority and frankly, given the dysfunction that we have been seeing lately, it will be a hard ask for Republicans to support Trade Promotion Authority for a Democratic president and it’s likely to slow us down on new trade agreements that are negotiated,” Hughes said.
Though these issues are priorities for the USFIA, its president acknowledged that Congress is “a bit distracted” for now, given the current focus on the budget and the debt ceiling. Still, she said she expected action—at least on China—should come before the end of the year.