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July 19, 2021
2021-1377

This Week in Trade for July 16

Last week (July 12 — 16)

European Carbon Border Tax Proposed. The European Commission July 14 put forward a set of proposals to establish a carbon border adjustment mechanism by 2023, with a ten-year phase-in proposed. The proposal requires approval by the European Parliament and the EU Council before it can go into effect. The Commission's preferred policy option would place a fee, by reference to the EU's cap-and-trade program, on certain carbon-intensive imports. The carbon border adjustment mechanism would initially be applied to cement, iron and steel, aluminum, fertilizers and electricity generation. The proposal requires approval by the European Parliament and the Council of the EU. EU officials maintained that the proposal would not run afoul of WTO trade obligations, but the move is certain to stoke global trade tensions, potentially including with the U.S. In a related development, Senate Budget Committee Democrats indicated their preference for including a "polluter import fee" in the FY 2022 Budget Resolution.

Senate Approves Uyghur Forced Labor Bill. The Senate unanimously passed July 14 the Uyghur Forced Labor Prevention Act, legislation that would bar American companies from importing products from the Xinjiang region of China unless they can prove they are not made with forced labor. The legislation must be approved by the House, which passed a tougher measure last year, before it can be sent to President Biden for his expected signature. In a related development, House Ways and Means Trade Subcommittee Chairman Earl Blumenauer (D-OR) this week scheduled a Subcommittee hearing on "The Global Challenge of Forced Labor in Supply Chains: Strengthening Enforcement and Protecting Workers" for July 21.

Senate Finance Approves Deputy USTRs. The Senate Finance Committee this week approved by broad margins the nominations of Jayme White and Sarah Bianchi to become Deputy USTRs, teeing up full Senate consideration in the coming weeks. If confirmed by the full Senate, White would be deputy for the Western Hemisphere, Europe, the Middle East, labor and environment, while Bianchi's portfolio would encompass Asia, Africa, investment, services, textiles and industrial competitiveness.

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