Play! – United States against China
In a major victory for Senator Chuck Schumer, the US Senate took the first step in funding a vast challenge to compete with China and achieve global dominance in technology. Senate Majority Leader Schumer (D-New York) rolled his “Endless Frontier Law“in the re-marketed”U.S. Innovation and Competition Act(USICA). The bill passed the Senate today with a bipartisan vote. Senator Schumer called the bill “a unique investment in American science and technology.” Senator Todd Young (R-Indiana) was the co-sponsor of the legislation.
Senator Schumer spoke about China for many years and he finally decided to put the legislation back on the market to be more bipartisan and to promote job creation across the country. Numerous amendments were added, one being of keen interest to the fashion retail industry – which was developed by Senator Mike Crapo (R-Idaho) – the ranking member of the Commission des Senate Finance) with the Chairman of the Senate Finance Committee – Senator Ron Wyden (D-Oregon). The Crapo amendment is called “2021 Trade Law. He was also strongly bipartisan (the vote to add him was 91-4) and would immediately resolve (and improve) several short-term disruptions to US trade.
Senator Crapo said of his addition: “This strong trade package will help support our efforts to push back China in one of the most critical areas we face – trade, our economy and anti-business activities. very harmful to which China is committed. to try to undermine us economically and undermine our American companies in our trade relations. “
The “2021 Trade Law”Reinstates the expired Generalized System of Preferences (GSP) program, the Divers Tariff Bill (MTB) program and the product exclusion process for some of the Trumpian 301 tariffs. These programs are a huge victory for many brands and retailers, because they eliminate tariffs on certain items, giving importers more choices for product placement.
The popular GSP program rewards less developed countries, while ATVs allow imported components to arrive duty-free – if used in domestic manufacture and / or presented as an item without US competition. China is (actually) excluded from the GSP program, but it is allowed to participate with ATVs. Senator Crapo said the addition: “Re-authorizes the Bill on Miscellaneous Tariffs and an Improved Generalized System of Preferences that will promote human rights, the environment, women’s economic empowerment, l rule of law and digital commerce, and restarts the process of excluding products from Section 301. “
Keep in mind that in fashion retail – the bulk of clothing, footwear and accessories still come from China with few alternatives on the horizon – and any competitive advantage offered to them is greatly appreciated. . The combination of the GSP, MTB and Section 301 exclusions allows certain items to be moved out of China and still be considered competitive in the US market.
“U.S. innovation and competition law”(USICA) is a larger version (in page size, scope and price) than the original“ Endless Frontier ”legislation. The bill will give America an edge with the evolution of 5G and the development of semiconductors. It is also regionalizing tech hubs away from Silicon Valley – to other states that will benefit from the additional employment.
The first bill offered $ 100 billion over 5 years under a technology and innovation leadership within the National Science Foundation (NSF). The revised bill is approaching $ 250 billion and is pointing in several different directions – and other agencies beyond the NSF venue, with at least $ 52 billion targeted for semi-chip development. conductors.
Retailers are watching China closely for any reaction to the US-based legislation, as they not only buy in China, but they sell in China as well. For many retailers and brands, China has performed well at retail with double-digit sales increases for several years.
China, of course, remains rebellious to allegations of forced labor in its Xinjiang region and has decided to punish brands like H&M, Adidas and Nike for any statements to the contrary. This new USICA legislation directly addresses forced labor and addresses concerns related to the seafood industry. Senator Crapo said (for his amendment): “The bill” strengthens efforts to Prohibit goods manufactured by forced labor from reaching the United States by strengthening our Customs and Border Protection (CBP) efforts and making better use of the Seafood Import Surveillance Program. ( SIMP).
It is clear that China is closely monitoring all of these developments. Recently, the Global Times reported that He Weiwen, a former senior trade official, said, “The US Endless Frontier Act is like a copy of what China is doing to develop its science and technology sector, although the United States (especially the former Trump administration), strongly hates China’s industrial policies.
The reinstatement of the GSP, ATV and 301 exclusions is legislative music to the ears of savvy retailers, but the industry is still grappling with COVID-19 recovery issues – including rising costs, delayed deliveries, a shortage of workers and inflationary costs. Fortunately, there is also an oversupply of pandemic products on the market.
With the economic recovery well underway, demand for (previously) hoarded items has fallen off a cliff, and retailers are already cutting that inventory as clothing prices rise. As everyone knows, buying a used car is difficult, food prices are rising, red meat and chicken prices are skyrocketing, and house prices have exceeded all reasonable expectations.
Overall, the improvement “Endless Frontier LawHas many good points, and the Senate should be proud of their accomplishment (as endorsed by six different committees). Of course, there are skeptics who complain about too much pork in the bill, or say the money could be allocated differently, but the legislation is an investment in America’s future along with others. commercial solutions (and pork for the job) as well. The bill creates several new “technology hubs” (away from Silicon Valley) that will provide a next generation of jobs and advance America’s technological independence and autonomy.
Senator Schumer said, “This bill will be seen as one of the most important things this chamber has done in a very long time, a declaration of faith in America’s ability to seize the opportunities of the 21st.st century. ”He continued with,“ Whoever wins the race for the technologies of the future will be the world’s economic leader, with profound consequences for foreign policy and national security as well. ”
This legislation is a huge victory for the nation over the financing of technology, and one that will also help the retail and commerce community. This allows Congress to work on next steps such as eliminating tariffs and returning to the Trans-Pacific Partnership (now known as CPTPP). The bill now goes to the House of Representatives and then back to the Senate before final passage with possible changes or additions. The hope that the legislative process will end as soon as possible – and certainly – before serious inflation kicks in.