AWFS is a client of LobbyIt. Each month, LobbyIt prepares the following report on public policy updates and activity for AWFS and its member companies.
AWFS Monthly Report
Greetings! During the month of May, we monitored market developments and tracked what the Hill is doing regarding the Perkins.
Advocacy Highlights
In May we saw several issues take shape in Congress. One being that there is a re-emergence of efforts to repeal Obamacare. Multiple conservative groups are working together to revitalize these efforts on both the legislative and legal front. However, there still is a lot of bipartisan opposition. Republican leadership is very skeptical as to the success of such efforts and whether it would be politically expedient with the upcoming midterm elections. Though it would be received well by many of the base, such a vote could place many vulnerable Republicans in difficult re-election campaigns in a tricky position.
Another is the continued work by Congress to avoid having to pass a major omnibusspending package later this week. To that end they’ve been working steadily to get individual spending bills passed out of each of the responsible appropriations committees. Though good progress has been made it remains to be seen whether they’ll have the time to complete this process. Part of the reason for this is the major pieces of legislation that remain to be passed. The FAA needs to be reauthorized, the Farm Bill passed, and the Water Resources Development Act (WRDA) voted on and passed. A lot of work has already happened on all of these bills, so their chances of passage are extremely high, if not certain. However, the FAA bill is being held up because there are efforts to attach multiple tax provisions to that bill, including making the individual tax cuts permanent. These are obviously controversial and their potential impact on deficits could be a stumbling block. WRDA was drafted very narrowly in the House to avoid controversy and was successfully passed, but the Senate version is a bit more expansive. However, all expectation is smooth passage of this bill. The Farm Bill recently failed in the House due to immigration concerns that were attached to it by a conservative block of GOP House members and the expectation is that the Senate’s less controversial bill will be what ultimately becomes law. But with the clock ticking, time is running out for a bill to work its way through both chambers.
In May, a large portion of our work revolved around monitoring the moves that are happening in the Administration and on the Hill. Part of this was focused on trade and tariff decisions by the President. Those are detailed below. Additionally, we monitored the upcoming movements on the Perkins bill in the Senate. To this end, we lined up meetings with the offices that are making these decisions in Congress. In May, that conversation was with Congressman Thompson’s office. We spoke with his staff to learn what they anticipate the next steps in the Perkins process to be. At the time, things are unclear. It seems that the Senate is going to move something out of committee, but it is not clear whether or not they will do so on a bipartisan basis. In June, the Senate will markup the bill and we will see what will happen next.
Legislative & Regulatory Updates
Trade Update
Senator Bob Corker (R-TN) is working on legislation in response to President Trump’s decision to impose steep steel and aluminum tariffs on key trading partners. Senator Corker’s legislation would address the Administration’s efforts that, in his view, abuse the president’s national security authorities. It would require that prior to any new tariffs being put in place pursuant to Section 232, Congress must pass a resolution of approval. The Senator’s bill is supported by Senator Pat Toomey (R-PA) and Senators Orrin Hatch (R-UT) and Jeff Flake (R-AZ) also stated they would consider supporting the bill.
President Trump is using Section 232 of the trade law, which allows tariffs to be placed on imports in the name of national security. However, some GOP lawmakers, along with Democrats, have argued that these penalties on steel and aluminum don’t qualify under the requirements of the provision. Some have criticized this action as insulting to our closest allies, including Canada. However, Defense Secretary James Mattis stated that he doesn’t believe European and Canadian anger over the tariffs will harm the military relations within NATO. Despite this and other assurances by the Administration, the anger from trading partners has been clearly expressed by them and these actions have all the makings of a trade war, if you were to listen to European and Canadian spokespersons.
However, any legislation to limit these actions face an uphill battle in Congress from the rank-and-file, as well as from the GOP leadership which has not supported these bills. Senator Mitch McConnell (R-KY), Senate Majority Leader, urged the President to rethink his actions but stated that there is little Congress could do to rein in Trump’s authority. House Speaker Paul Ryan (R-WI) also indicated that Congress is unlikely to act as any bill that reaches the President’s desk wouldn’t be signed. Senator Lindsay Graham (R-SC) expressed doubt that there is a need to undercut the President’s ability to negotiate better deals by imposing tariffs. Senator Joni Ernst (R-IA) expressed a similar sentiment. In an attempt to head off an awkward intra-party confrontation, Senator Graham helped to organize a meeting with Trump and concerned GOP Members. This conversation and others have so far proven ineffectual in changing Trump’s mind.
Currently, the Administration has confirmed new tariffs on $50b of Chinese imports. Tariffs on $34b will take effect on July 6. This is a small percentage of what China exports but should it retaliate, the Administration has confirmed that it is prepared to retaliate on an additional $100b in Chinese goods. However, the fear is that if we continue down this path, the repercussions will spread throughout global trade and impact multiple sectors. Reports are that shipments are slowing at ports and airfreight terminals around the world. Prices for crucial raw materials are rising and in factories around the world orders are being cut, investments delayed. The Administration argues that the end result of its strategy is that multinational companies will be forced to bring factory production back to the US.
With the tariffs on China and on our allies, the Trump Administration is hoping to drive trade partners to the negotiation table and secure more favorable trade deals. The jury is still out as to whether this strategy will ultimately prove successful.
Until next month,
Lobbyit.com
Lobbyit.com | 1425 K Street, NW | Suite 350 | Washington, DC 20005 | Phone: 202.587.2736 | Fax: 202.747.2727
info@lobbyit.com | lobbyit.com | Copyright © 2011. All Rights Reserved.