A Closer Look at U.S. Trade Policy

The beginning of 2023 saw important developments at the federal level that will shape the course of U.S. trade policy, many of which are likely to impact supply chains for apparel and footwear companies.

In Congress, Rep. Kevin McCarthy, R-Calif., became speaker of the House Jan. 7 after an unusually lengthy fight over his leadership. McCarthy has said that with respect to international trade he intends to focus on (1) big tech censorship and digital data, (2) holding China and other actors accountable for illegal theft of intellectual property and trade secrets, (3) protecting and streamlining U.S. and global supply chains, and (4) and ensuring U.S. competitiveness.

The House Ways and Means Committee got a new leader in Rep. Jason Smith, R-Mo., who has said his priorities include (1) exploring ways to provide tax benefits to U.S. companies looking to leave China and relocate to either the U.S. or U.S. allies, (2) using trade policy and taxes to re-shore and strengthen U.S. supply chains, and (3) punishing unfair trade practices that benefit China at the expense of the U.S. workforce.

On the Senate side, leadership and political divisions are similar to last Congress, with Democrats holding a slim majority. Sen. Charles Schumer, D-N.Y., is the Senate majority leader, and Sen. Ron Wyden, D-Ore., is the chairman of the Finance Committee.

At the White House, U.S. Trade Representative Katherine Tai has indicated that she will continue to drive forward efforts to reframe U.S. trade policy around the needs of workers. Notably this includes effectively abandoning efforts to negotiate traditional free trade agreements and instead pursuing initiatives such as the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity that exclude tariff cuts but cover a range of other issues meant to remove other barriers to trade. These initiatives support the administration’s broader goal of reducing supply chain dependencies on China and “friend-shoring” more production to countries friendlier to U.S. interests. While lawmakers are generally supportive of that goal, they are increasingly pushing back on how the White House is going about it.

With new leadership and priorities and Congress, and an ongoing effort by the Biden administration to fundamentally alter U.S. trade policy, this will be an important topic to watch in 2023. Join Sandler, Travis & Rosenberg’s Nicole Bivens Collinson at AAFA’s upcoming trade conference to learn how these developments may impact textile, apparel, and footwear companies.

Article prepared by AAFA Global Supply Chain & Trade Conference Sponsor,?Sandler Travis & Rosenberg (April 27, 2023). Learn more at www.strtrade.com &?aafaglobal.org/SmartTrade23?#AAFASmartTrade