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SACC-DC also provides insights of the political development in the U.S. and from our members. You can read the insights below the newsletter archive.

Build Back Better, International Trade and U.S. Tariffs With  Pillsbury

We had the privilege to interview SACC DC’s own chairperson and partner at Pillsbury Law, Nancy Fischer and her colleague Craig Saperstein. Nancy Fischer specializes in international trade law and international dispute resolution. She leads Pillsbury’s 60-lawyer Public Practices and Public Policy sections. Craig is a partner in Pillsbury’s Public Policy group and works with developing and implementing government relation strategies on both a federal and state level. In this interview, we asked Nancy and Craig about President Biden’s time in office so far and about the current political developments in the business sector and the international trade arena.

How would you describe President Biden’s first 9 months in office?

Craig – We are at this moment in a time when things are relatively rocky for the Biden administration. Still, Biden got off to a strong start. He really improved the covid response and his passage of the American rescue plan act pumped a lot of money into individuals’ pocketbooks and to state governments. Further, he created a child tax credit that I believe has reduced child poverty in the US by over a third which is pretty remarkable. The administration then reached an inflection point in August, which is a typical time frame for new administrations to have their first troubles after the honeymoon period is over. However, in this case I would say it was a double whammy in August. There was the criticism over the withdrawal from Afghanistan and the way it was done. At the very same time the delta variant really started to rage in the country. I think the confluence of those events combined with the reality of agreeing to a major social policy bill have made this a rocky period for the Biden administration. A lot of political pundits would have said that the Afghanistan withdrawal was not something that was necessarily hampering Biden’s popularity, but I think it tarnished the notion that the adults were back in charge in Washington, that whether you agree with him on the issues or not you could depend on an experienced politician like Biden to display confidence.

The other major selling point for President Biden is that he is a longtime legislator. He has a lot of experience in finding ways to make deals in congress. Although, because the debate about the Build Back Better bill has gone on for so long now, I think the American public is starting to get a little antsy about whether his skills as a master legislator is coming into question. All those things have led to a reduction in the President’s popularity and some perceived momentum among republicans that they will have a good chance on retaking control of congress in next year’s midterm election. Still, I think a lot can change if both the bipartisan transportation and infrastructure bill and the big social policy bill is enacted into law. That bill also includes some tangible parts that people will be seeing the effect of in their daily lives – which could enhance his popularity with voters. I think we will know in the next few weeks whether that social policy bill will actually move forward.

What impact do you think the Build Back Better Agenda would have on the Business Sector?

Craig – Firstly, there is a bunch of climate change related provisions. What those will be we don’t know yet because there is a lot of infighting among democrats as to how significant the climate change provisions will be in the bill. There is also a lot of healthcare and childcare related provisions and paid family leave – which are all components that will likely be in the bill. How robust and how long lasting this will be, are details that are being worked out right now. But in particular, the President has framed all of the provisions in this bill as a matter of competitiveness in competing with China specifically.

Nancy – I have heard some talk about the bill as a form of industrial policy. The US has not typically had industrial policy as such so this is a response to that. I think that the buy America provisions that are in the bill also signal the focus on US manufacturing as well which is kind of a counter to China in that sense. A number of the things that will be funded also include types of electric vehicles and electrification and things that are moving into the next generation of emerging technologies. Hopefully we will see more on the semi-conductor side as well as the supply chain issues there have been quite pronounced. If we really are going to get companies like TSMC and GlobalFoundries to invest in the US, which they are committed to do, it could be a bit of a game changer from the standpoint of US technology and US production.

What can we say about the future regarding tariffs and trade with China? And how would you say businesses prepare for different outcomes of future trade talks?

Nancy – We have seen the United States Trade Representative, Katherine Thai, come out with a China policy a week or two ago, which largely mimics what the Trump administration was doing. We are seeing a lot of supply chain reviews going on right now across all of the major government agencies in a process of conducting that one-year review. The tariffs are staying in place and many businesses are being significantly impacted by those tariffs. In many cases the resources, whether it is manufacturing base or workers, have not been there yet to actually be able to make things here. It takes years to get some of the infrastructure in place to do that. Those are going to be some challenges that businesses face on the horizon as companies continue to face 25% tariffs on things that they still need from overseas but yet are not able to make here.

Further, the USTR has reached out to her counterparts in China to discuss the need to comply with the trade deal that was reached with China in terms of Chinese imports of US goods, in particular agriculture products. We will see how things progress on that front. I think the challenge is that there was an initial trade deal and then COVID hit. There was a lot of things that happened that arguably could have had an impact on some of the ability to comply with that trade deal. So now as we enter a more normal economy post-COVID, I think it is going to be judged on what in fact China is doing in relation to keeping those commitments. We also see the EU and the US in connection with the trading technology council engaging in relation to some of these big issues, those talks started at the end of September. We will see whether that is a basis for countering some of what arguably relates to different types of support that the Chinese government provides for businesses and whether those are subsidies and if we are going to handle this through the normal sorts of trade rules like anti-dumping and countervailing duty cases. Are we going to really reinvigorate the WTO and address some of the structural problems that the parties say they have and why we have been holding up a lot of the confirmation of the judges to be able to actually have a functioning appellate process? I think those are some things that there have been ongoing discussions about, and I think some of the things that have been put on the table are valid points to address. Hopefully rather than just not appointing judges, we can actually have a discussion around what is not working and how to fix it.

Researched and written by Jakob Enander, Business Associate