News: Moolenaar defends a scaled-back China week

Monday, September 9, 2024

Moolenaar defends a scaled-back China week

Sep 09, 2024

Presented by National Taxpayers Union

With help from Doug Palmer

Chaie John Moolenaar, arrives for the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party hearing.

GOP Rep. John Moolenaar is an architect behind a so-called China week in the House where lawmakers plan to vote on a series of China-related measures. | Tom Williams/CQ Roll Call

QUICK FIX

— The Chair of the House Select Committee on China, John Moolenaar, addressed the decision to hold a downgraded China week, with the most hawkish provisions left off a list of expected votes today.

— A growing number of GOP lawmakers are voicing reservations about a reported White House decision to block the sale of U.S. Steel to a Japanese company.

— Former government officials are panning a plan from the Heritage Foundation's “Project 2025" blueprint to reorganize the Office of the U.S. Trade Representative.

It’s Monday, September 9. Welcome to Morning Trade! And… Congress is back! I feel like it's the first day of grade school again. Who else is excited?

Send your trade news to ahawkins@politico.com, gbade@politico.com and dpalmer@politico.com. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter.

A message from National Taxpayers Union:

Congress Should Reject the Secret Tax on American Families. With less than two months before the election, Congress is attempting to impose a big tax increase on American families by rolling back the “de minimis” exemption for imports valued at $800 or less. A recent Yale/UCLA study called ending de minimis a “regressive tax” on low-income Americans that would result in a new 12% tax on online purchases for Americans in the poorest American zip codes. Read more.

Driving the day

MAKING THE BEST OF CHINA ‘WEAK’: China committee Chair John Moolenaar (R-Mich.) says the House could still vote on two tough-on-China bills that would address duty-free imports and U.S. investment in the country before the end of the year.

That’s a direct response to critics of a diminished “China week,” upset that legislation to crack down on the so-called de minimis “loophole” — which would address duty-free entry of shipments worth less than $800 — and on outbound investment were left off a House Rules Committee list, which set plans on a host of votes for later today.

“We'll continue to work on the remaining bills as we go through this legislative session [such as] de-minimis and outbound investment. These are bills the Speaker is very interested in and is committed to, and I believe those will come up before the end of the year,” Moolenaar told your host in an exclusive interview (for Pros!).

Moolenar’s own NO GOTION Act, which would prohibit companies affiliated with China from receiving green energy production tax credits, was also left off the list. Moolenaar had introduced the bill after plans were announced to build a plant in rural Michigan that is connected to China-headquartered Gotion, which has been the subject of intense criticism.

But the China committee chief said he doesn’t consider the lack of a scheduled vote a snub.

“To me, it's not whether something happens this week it's [about] getting it done, right, whether that’s this week or weeks from now. The bottom line is, we want this to be successful and will continue to make progress and build on the momentum that we have,” he said.

Reminder: The House Rules Committee has teed up more than a dozen bipartisan bills targeting various aspects of the U.S.-China relationship.

Among them are bills that would bolster federal oversight of foreign purchases of U.S. agricultural land and bar Chinese companies from accessing EV tax incentives. Both are expected to come up for a vote today.

But but but: Some Republicans are disappointed that the bills represent a truncated version of plans House Speaker Mike Johnson outlined during a Hudson Institute speech over the summer, which included outbound investment and de minimis.

“‘China Week’ in the House of Representatives will in fact be … weak,” wrote Scott Paul, who leads the Alliance for American Manufacturing, on X. “Tough trade and investment measures shelved. Global companies successfully persuaded House GOP to back off.”

One House aide close to discussions, who was granted anonymity to discuss the latest on China week, told Morning Trade that “there is a great deal of unhappiness over the lack of ambition on taking on China.”

“No de minimis. No PNTR. No fentanyl, No critical minerals legislation. No outbound,” the aide continued. “The most difficult challenges that [Speaker Johnson] himself committed to in a speech to the Hudson Institute have all been ignored.”

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REGULATORY REVIEW

NEWS ON NIPPON: Moolenaar told Morning Trade that Japan’s relationship with the United States should be more closely considered as President Joe Biden prepares to block the sale of U.S. Steel to Japan’s Nippon Steel.

“It's going for a CFIUS review, and [Biden] intends to block it. The question is, if he’s opposed to this, what is the alternative?” the China committee chief said. “All of us want to see American leadership in producing steel and don't want to be dependent on other nations for steel, [but] it's better to be partnering with allies than it is with China.”

He’s the latest Republican lawmaker to voice reservations on the president’s reported decision. Several House Republicans on Thursday raised concerns that the Biden administration's effort to block the acquisition could be politically motivated.

"The possibility that these actions are being taken to benefit a particular candidate, given the upcoming presidential election, is deeply troubling,” Reps. Bill Huizenga of Michigan, Dan Meuser of Pennsylvania, Andy Barr of Kentucky and John Rose of Tennessee wrote in a letter to Treasury Secretary Janet Yellen.

U.S. STEEL, WHEELING-NIPPON JOIN CASE: Meanwhile, U.S. Steel and Wheeling-Nippon, a subsidiary of Nippon Steel, announced last week that they are joining the United Steelworkers in a new case asking for trade remedy duties on imports of corrosion-resistant steel from 10 countries.

FYI: Officials from the Committee on Foreign Investment in the U.S. (CFIUS) have raised concerns about whether Nippon Steel would aggressively participate in trade remedy cases if it acquires U.S. Steel, according to a letter first reported by Reuters and seen by Morning Trade.

A message from National Taxpayers Union:

TRANSITION 2025

USTR REVAMP PLAN PANNED: A plan to reorganize the Office of the U.S. Trade Representative contained in the Heritage Foundation’s “Project 2025” blueprint for the next Republican administration is getting bad reviews from some former officials.

The proposal, contained in a chapter written by former Commerce assistant secretary Thomas Gilman, suggests transferring several other trade-related agencies into an enlarged USTR. Those include the Commerce Department’s Bureau of Industry and Security and International Trade Administration, as well as the U.S. Export-Import Bank, the U.S. International Development Finance Corp. and the Trade and Development Agency.

“It’s a terrible idea,” said Bill Reinsch, a former Commerce official under the Clinton administration and ex-Senate staffer, now at the Center for Strategic and International Studies. He noted that USTR is part of the Executive Office of the President, rather than a freestanding department, and that Congress has traditionally resisted expanding USTR’s responsibilities in favor of keeping the office focused on negotiation.

Lawmakers have also worried that putting ITA’s trade remedy functions into the hands of the negotiator might create the temptation for USTR “to give part of them away to get a deal on something else,” Reinsch said.

Everett Eissenstat, who has worked on trade issues in the White House, USTR and the Senate, said he was skeptical Congress would approve such a plan. Much of USTR’s stature comes from being within the Executive Office of the President, he said, and it could become “diluted” if it were to be separated.

Final word?: Danielle Alvarez, a senior adviser to the Trump campaign, did not comment directly on the proposal in response to an emailed question. But she noted that “President Trump's campaign [has] made it clear that only President Trump and the campaign, and NOT any other organization or former staff, represent policies for the second term.”

TRADE OVERNIGHT

— USTR Katherine Tai is traveling this week to the United Kingdom, according to a public schedule.

— The Hague turns the screws on chips exports to China, per POLITICO Pro.

— Transportation Secretary Pete Buttigieg warns of job losses if Republicans scrap EV tax incentives, per POLITICO Pro.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.

A message from National Taxpayers Union:

Congress Should Reject the Secret Tax on American Families. With less than two months before the election, Congress is attempting to impose a big tax increase on low-income families by rolling back the “de minimis” exemption for imports valued at $800 or less. A recent Yale/UCLA study called ending de minimis a “regressive tax” on low-income Americans that would reduce net US welfare by $11.8–$14.3 billion, disproportionately harm minority consumers, and result in a new 12% tax on online purchases for in the poorest American zip codes. In addition, many small and medium sized enterprises rely heavily on the de minimis exemption. Eliminating the de minimis exemption would do nothing to improve customs enforcement, but it would impose a big regressive tax increase on American households. Read more.