Washington Insider-- Friday

The Coming Policy Wars

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

US Customs Issues Region-Wide Ban On Cotton, Tomato Products From Xinjiang

U.S. Customs and Border Protection (CBP) Wednesday announced their Withhold Release Order (WRO) now applies to cotton products and tomato products produced in China's Xinjiang Uyghur Autonomous Region “based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor.”

CBP said the actions it is basing the order on include “debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.”

CBP personnel at all U.S. ports of entry will detain cotton products and tomato products “grown or produced by entities operating in Xinjiang. The cotton products include apparel and textiles and “other goods made with cotton and tomatoes.”

CBP said importers are responsible for making sure products they import “do not exploit forced labor at any point in their supply chain, including the production or harvesting of the raw material.”

This is the second WRO that CBP has issued on products from Xinjiang issued in Fiscal Year (FY) 2021.

OMB Reviewing USDA Notice on Using RFID Tags For Cattle, Bison

The Office of Management and Budget (OMB) has received a notice from USDA's Animal and Plant Health Inspection Service (APHIS) on the use of radio frequency identification (RFID) tags as “official identification in cattle and bison.”

In July 2020, APHIS published a notice seeking comment on moving to using RFID tags as the sole official eartags used in interstate movement of cattle and bison. Comments were due by Oct. 5, 2020. The agency proposed that starting Jan. 1, 2022, they would no longer approve venders to use the official USDA shield in producing metal eartags or other eartags that do not have RFID components.

They also suggested that starting Jan. 1, 2023, RFID tags would be the only identification devises for cattle and bison, but indicate cattle and bison with metal tags in place before that date would be grandfathered in.

Presumably the notice under review would finalize APHIS' plans on this topic.


Washington Insider: The Coming Policy Wars

Bloomberg is reporting this week that big business “is in a tight spot” just now. It thinks that rebellious Trump loyalists have amped up their influence over the Republican Party, which business traditionally leaned on for support—and that may not serve them well in the future.

The tension comes from the fact that although President-elect Joe Biden is a moderate, “the Democratic Party's platform is the most left-leaning it's been in decades.” From a business standpoint we're concerned about the growing ranks of populist viewpoints in the Republican Party and the growing ranks of progressive and socialist viewpoints in the Democratic Party, says Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce.

Big companies and business groups such as the Chamber are playing a delicate game, Bloomberg says. They're distancing themselves from President Trump as fast as they can and the bridge between big business and the Trump administration, never solid, is in “flaming ruins.” After the Jan. 6 invasion of the Capitol, Jay Timmons, president of the National Association of Manufacturers, called the storming of Congress to stop certification of the presidential election “seditious” and many other business interests agreed.

“There is no place for demagogues in our democracy,” wrote the U.S. Chamber of Commerce, and the Business Roundtable sharply criticized allegations by President Trump and his supporters that the election was stolen.

Individual companies also broke decisively with the administration, Bloomberg says. It calls the take that big business gathered courage to oppose Trump “only when he was heading out the door” as wrong. For example, Bloomberg says that chief executive officers had challenged Trump frequently on a wide range of issues from auto emissions to immigration and race. The report describes several prominent disagreements with businesses including Ford Motor Co., Exxon Mobil, BP, Shell and several others.

In addition, numerous business organizations opposed administration tariffs on aluminum, steel, and other products, which incited retaliatory duties from China and other trading partners. “Trade works. Tariffs don't,” the U.S. Chamber of Commerce said.

True, business wasn't always oppositional, Bloomberg says. The Tax Cuts and Jobs Act of 2017, which slashed the corporate income tax rate, was widely popular, as were some aspects of the deregulation efforts. And in 2019 Trump managed to bring some business bigwigs back into his tent with a new advisory group on workforce policy.

On the whole, though, Trump steered the Republican Party in a populist direction, tapping into a disaffected part of America that dislikes business elites almost as much as political, academic, elites — and he remains the party's most powerful force.

Bradley says the Chamber of Commerce has been deeply worried that the fringes of both parties are pulling the centrists apart. As a result, two years ago it changed its method for grading lawmakers to take cooperation across the aisle into account, honoring people such as Democratic Representative Josh Gottheimer of New Jersey and Republican Senator Susan Collins of Maine.

In the latest election cycle the Chamber gave $152,000 to Democrats, more than it had over the previous 28 years, vs $483,500 to Republicans. It also endorsed 23 embattled House Democrats. Private equity, oil and gas, and real estate companies also tilted toward Democrats more than in past elections.

The upside scenario for big business is that it expects that President Biden will be more effective than the Trump administration was in getting the pandemic under control and won't want — or be politically able — to push through big tax increases or other measures inimical to business. Stocks, which are tied to expectations for economic growth and corporate profits, rose on Jan. 6 when it became clear that Democrats won control of the Senate in the Georgia runoff races.

In fact, business is likely to pivot back to the GOP quickly if the party “shakes off Trump's influence,” some observers say. Republican energy consultant and former Trump White House adviser Mike McKenna plays down the significance of companies' pledges to pause campaign contributions. “Very few contributions happen in the first few months of an election cycle” and company PACs “are not really that important anyway,” he says.

“If business is thirsty for less regulation and a lower corporate tax burden, I think they'll find ways to overcome any shock and awe they felt on Jan. 6,” says Princeton University history professor Julian Zelizer, who's studied the Republican Party. Scott Reed, a GOP strategist who used to work for the Chamber thinks that once Trump moves on, the Republican leaders have a chance to do a “real reset and to recreate a new paradigm of the Republican Party being about growth and opportunity.” That, anyway, is what big business leaders are hoping for.

So, we will see. The very early policy tea leaf readings tend to be hazy indicators of real policy shifts—as well as looming key battles. There seems to be real interest for policy shifts, however, including some leading to controversies producers should watch closely as they emerge, Washington Insider believes.

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