Biden Calls for Higher Tariffs on Chinese Steel and Aluminum

President Joe Biden announced plans to triple tariffs on Chinese steel and aluminum imports to combat alleged unfair competition from Chinese companies.

There is currently a 7.5 percent tariff rate on certain steel and aluminum products under Section 301, which applies to Chinese-produced steel and aluminum. Biden is now asking the Office of the U.S. Trade Representative to consider raising the Section 301 tariffs to 25 percent. That increase would be on top of the 25 percent tariff on steel and 10 percent tariff on aluminum imposed by the Trump administration through Section 232, which covers most countries except for Canada and Mexico. While the increase on Chinese exports would be notable, the Wall Street Journal reports that it would affect only 0.6 percent of U.S. demand for steel.

“American workers continue to face unfair competition from Chinese imports of steel and aluminum products, which are among the world’s most emissions-intensive,” the White House said in a statement announcing the plan. “Chinese policies and subsidies for their domestic steel and aluminum industries mean high-quality U.S. products are undercut by artificially low-priced Chinese alternatives produced with higher emissions.”

The Biden administration further said the president was directing his senior team to work with Mexico to jointly prevent China and other countries from evading Section 301 and 232 tariffs by importing through Mexico into the United States.

Increases to steel and aluminum tariffs have been opposed by business and trade groups, including the U.S. Chamber of Commerce, and the North American Association of Food Equipment Manufacturers (NAFEM) and FEDA have advocated for the removal of Section 301 tariffs entirely. Combined, Section 232 and 301 tariffs accounted for $228.6 billion in duties paid by American businesses from 2018 through March 20, 2024, according to data from U.S. Customs and Border Protection.

Economic Optimism Up in Latest Small Business Index

More small business owners believe the economy is improving, according to the latest Small Business Index from the U.S. Chamber of Commerce and MetLife.

The index rose slightly to 62.3 from 61.3 in Q4 2023, which the U.S. Chamber noted reflected a stable business climate. One in three (32 percent) of small business owners said the U.S. economy was in good health, up 7 percent from the previous report. Further, 38 percent said their local economy was in good health, up 8 percent. Nearly two-thirds of small businesses said the overall health of their business was good and 67 percent reported being comfortable with their cash flow.

“Small businesses’ perceptions of the economy are drifting upward, with businesses reporting being comfortable with their cash flow and the health of their business,” said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce. “While many business owners have continued to struggle with high prices and rising wages, recent jobs reports are positive. While headwinds remain, confidence is ticking upward and small businesses are more resilient and prepared for unforeseen challenges.”

Despite the improvement, nearly half of respondents felt the economy was in poor health. Much of that perception is likely fueled by continuing high levels of inflation, which 52 percent of businesses cited as a top challenge. Concern for revenue also rose 7 percent, with 29 percent of small businesses now calling it a top challenge.

Although some areas of concern remain elevated, MetLife and the U.S. Chamber believed the overall numbers were trending in a positive direction. “It is encouraging to see the majority of small business owners are satisfied with their business’s health and their current cash flow, despite ongoing concerns around inflation,” said Cynthia Smith, senior vice president and head of regional business at MetLife. “These trends convey a sense of optimism for the future and, once again, underscore the adaptability and determination shown by small business owners in challenging economic environments.”

For the full Small Business Index report, please click here.

Draft Bill Would Create More Requirements forEmployers Who Operate Warehouses

A draft bill being circulated on Capitol Hill would harm wholesale distributors by creating new requirements for employers who operate warehouses and protections for employees.

Sen. Ed Markey (D-MA) is seeking cosigners for the Warehouse Worker Protection Act, a law that would require the Occupational Safety and Health Administration (OSHA) to issue a proposed standard for ergonomic program management within three to four years. Additionally, the bill would require OSHA to issue a final rule within three years that would require employers to have medical professionals at the workplace to aid injured or ill workers and to provide occupational medicine consultation services. Further, it would establish a Fairness and Transparency Officer in the Department of Labor’s Wage and House Division, whose director may issue orders or regulations as necessary.

In addition to creating new workplace rules, the bill would speed up the timeline for abatement for willful or repeat violations. Employers who fail to correct a violation designated as willful or repeated, and who are not granted a stay, would be assessed a penalty of up to $7,000 for each day while the violation continues.

The bill has not yet been introduced in the Senate, but several business groups and trade associations, including FEDA, have signed on to an opposition list that is being shared with legislators.

Covered workplaces would include warehousing and storage facilities, wholesalers or durable and nondurable goods, electronic shopping and mail-order houses, and couriers and express delivery services.

Senate Votes to Rescind Expanded Joint Employer Rule

The Senate passed a resolution on April 10 to repeal the National Labor Relations Board’s (NLRB) new joint employer rule, sending the matter to President Joe Biden, who previously vowed to veto the measure.

The resolution was introduced under the Congressional Review Act (CRA), which allows Congress to repeal rules implemented by federal agencies, such as the NLRB. The House approved the resolution in January on a 206-177 vote, while the Senate vote was much narrower at 50-48. Sen. Joe Manchin (D-WV) and independent senators Angus King (I-ME) and Krysten Sinema (I-AZ) joined Republicans in voting for the resolution.

Last November, the NLRB released a final rule that created a new standard for joint-employer status that significantly expanded the scope of companies that could be considered joint employers of an individual worker. Under the new rule, a joint employer is defined as “two or more common-law employers of the same employees who share or codetermine those matters governing those employees’ essential terms and conditions of employment.” The rule also requires a joint employer to bargain collectively over the terms of employment for any employee under its control.

The expansion of which companies can be considered a joint employer has been strongly opposed by business groups and trade associations. In March, the U.S. District Court for the Eastern District of Texas sided with businesses by blocking the rule, finding that the NLRB’s broad definition meant that there was effectively no situation where a company would not be considered a joint employer.

The passage of the resolution by Congress seeks to further invalidate the NLRB’s revised joint employer rule. “Yesterday’s Senate vote delivers a clear bipartisan mandate, rejecting the NLRB’s harmful joint employer rule and protecting American businesses and workers from more red tape,” said Lauren Williams, associate vice president of government relations for the National Association of Wholesaler-Distributors. “We call on President Biden to sign this CRA and firmly support small businesses. We sincerely thank Leader Mitch McConnell and Sens. Bill Cassidy and Joe Manchin for their strong leadership.”

The vote was also commended by the National Restaurant Association, as the new joint employer standard would especially affect the restaurant industry because of the prevalence of the franchise model. “At a time when it’s next to impossible to get something passed in both Houses of Congress, yesterday the Senate came together to express their support of business owners by voting to overturn the National Labor Relation Board’s overreaching joint employer rule,” said Sean Kennedy, executive vice president for public affairs at the National Restaurant Association. “This vote echoes the support of House members, and we hope President Biden will give serious consideration to signing the resolution.

“The NLRB’s 2023 joint employer rule threatens the foundation upon which nearly a third of the restaurant industry is built,” Kennedy continued. “Restaurant ownership — especially for the franchisees that will be most impacted by the rule — grew significantly under the previous rule, opening doors for people who may not otherwise have been able to become an entrepreneur.”

Business Group Calls on Senate to Pass Tax Relief Bill

With the April 15 tax deadline a week away, the U.S. Chamber of Commerce is using the timing to push Congress to deliver tax relief for businesses.

In January, the U.S. House of Representatives passed the Tax Relief for American Families and Workers Act of 2024 with a 357-70 vote. Despite that strong bipartisan support, the Senate has yet to act on the bill, which includes several provisions designed to reduce the tax burden on businesses. Those provisions include:

• Restoring immediate research and development expensing for domestic research
• Reinstating full expensing for businesses’ capital investments
• Interest deductibility for businesses forced to borrow at high interest rates
• Expanding the amount of investment a small business can immediately write off from $1 million to $1.29 million.

Senate Majority Leader Chuck Schumer (D-NY) placed the bill on the Senate’s calendar before Congress’ April recess, but, as the U.S. Chamber notes, it is unclear if he’ll bring it to a vote after the Senate returns on April 8.

“Businesses need certainty to make decisions, plan, invest and grow,” the U.S. Chamber said. “The swift passage of this law would not only boost domestic investment and innovation but also aid job creation by restoring and extending tax relief measures.” The Chamber called on the Senate to support the House-passed bill or to reach a consensus to ensure a vote once Congress is back in session. “Senators cannot allow perfect to be the enemy of the good and must act when Congress returns to pass the Tax Relief for American Families and Workers Act of 2024.”

OSHA Issues Final Rule Allowing Union Reps to Join Inspections

Over the objections of business and trade groups, the Occupational Safety and Health Administration (OSHA) issued its final rule that allows third parties, including union organizers, to participate in safety inspections of job sites. The rule is effective March 31, 2024.

The rule amends OSHA’s Representatives of Employers and Employees regulation to clarify that the representatives authorized by employees may be an employee of the employer or a third party. OSHA claims that a third party may be necessary “because of their relevant knowledge, skills or experience with hazards or conditions in the workplace or similar workplaces, or language or communication skills.” However, business groups such as the Coalition for Workplace Safety (CWS) have noted that this would also allow employees to appoint union organizers as their representatives — even if the workplace is not part of a union.

“The rule will serve to distract OSHA from its core mission — ensuring safe and healthy workplaces — as a third party accompanying OSHA inspectors will be able to redirect attention to their own agendas,” CWS said in a statement. “The rule also will put OSHA inspectors in the middle of labor disputes and organizing drives and force them to police the behavior of these representatives who are pursuing their own goals. The rule is short on guidance for how to implement the changes and protect the inspection process. Moreover, it violates workers’ right to choose their own representation by allowing a single employee to choose representation for the entire workforce.”

The CWS’ comments were echoed by other business groups, including the National Association of Wholesaler-Distributors (NAW). “In yet another instance of favoring big labor’s agenda, the Biden administration revived the failed Obama era policy under the guise of improving worker safety,” Brian Wild, chief government affairs officer at NAW, said. “This rule does nothing to improve workplace safety, instead it allows third-party individuals access to warehouses during OSHA inspections for potentially their own personal benefit, including union organizing, without any real safeguard for employers and employees.”

Federal Reserve Holds Interest Rates Steady

The Federal Reserve voted to keep interest rates flat at its March meeting but indicated it could make three cuts later this year as inflation eases.

Following the vote, the 12 members of the Federal Open Market Committee released a statement affirming its goal of achieving maximum employment and a 2 percent inflation rate over the long run. In line with that goal, it explained that it decided to maintain the target range for federal interest rates between 5.25 and 5.5 percent. “In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the statement said. “The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

However, the Fed is still anticipating rate cuts later this year. In its economic projections released on March 20, the agency signaled that it would reduce federal interest rates in stages throughout the rest of the year to a target rate of 4.6 percent by December. That would achieve a 2.1 gross domestic product (GDP) growth for 2024 and 2 percent GDP growth in 2025, according to the Fed’s projections.

Committee Advances Resolution to Nullify New Independent Contractor Rule

A congressional committee has advanced a resolution that would nullify the Department of Labor’s (DOL) revised process for determining whether a worker is an employee or independent contractor.

The move comes after the DOL issued a new final rule in January that implemented an analysis of six factors to determine whether a worker should be considered an employee or an independent contractor. Those factors include:

• Any opportunity for profit or loss a worker might have
• The financial stake and nature of any resources a worker has invested in the work
• The degree of performance of the work relationship
• The degree of control an employer has over the person’s work
• Whether the work the person does is essential to the employer’s business
• The worker’s skill and initiative

The updated rule is expected to expand the number of workers who qualify as employees. However, some members of Congress are now taking up the issue in an effort to return to the previous, three-year-old standard. On March 21, the House Education and Workforce Committee voted 21-13 to advance a Congressional Review Act resolution that would nullify the independent contractor rule. In a press release on its action, the committee said the resolution “offers Congress the opportunity to take a unified stand against the department’s thirst for more government control over America’s workforce.” Additionally, the committee said the resolution “upholds entrepreneurial opportunities and flexibility instead of heavy-handed mandates from the federal government.”

In March, the National Association of Wholesaler-Distributors and a group of 46 business organizations sent a letter supporting the resolution. The letter called the new rule “unnecessary,” said its multi-factor approach to determining independent contractor status would create confusion and that it would limit independent and flexible work opportunities. “The reality is that today, there are over 9 million job openings across the country,” the letter stated. “Yet, millions of Americans continue to exercise their choice to work as independent contractors and run their own businesses.”