USTR Seeking Comments on Supply Chain Resilience

On March 7, 2024, the Office of the United States Trade Representative (USTR) announced a notice in the Federal Register seeking comments to “inform the development of trade and investment policy initiatives that promote supply chain resilience.” A public hearing will follow. Given the Administration’s focus on “core values,” such as protecting workers’ rights and the environment, this notice and hearing are part of the “whole of government effort” to strengthen domestic manufacturing and to promote “friend-shoring” by increasing trade with strategic partners of the U.S. More background on the goals and objectives of this process can be found in the notice.

Commenters can submit information related to one or more of the following questions by the deadline of April 22:

1. How can U.S. trade and investment policy, in conjunction with relevant domestic incentive measures, better support growth and investment in domestic manufacturing and services?

2. What existing or new tools could help ensure that growth in domestic manufacturing and services does not undergo the same offshoring that we have experienced over the past few decades?

3. How can U.S. trade and investment policy promote a virtuous cycle and “race to the top” through stronger coordination and alignment on labor and environmental protections within trusted networks among regional and like-minded trading partners and allies?

4. What are examples of trade and investment policy tools that potentially could be deployed in the following sectors to enhance supply chain resilience? In these sectors, what features of the current policy landscape are working well, or less well, to advance resilience?

  • Aerospace and aerospace components.
  • Agriculture, forestry and fisheries.
  • Automobiles and automotive parts.
  • Call centers, business processing operations and related services.
  • Critical minerals, including for electric vehicle and large-scale energy storage batteries, and related recycling.
  • Metals.
  • Pharmaceutical and medical goods.
  • Semiconductors, microelectronics and inputs thereto.
  • Renewable energy generation, transmission and storage, including solar and wind technology and inputs thereto.
  • Textiles, such as yarns, fabrics, apparel, and other finished goods.

5. What additional sectors may need dedicated trade and investment policy approaches to advance supply chain resilience? What should such approaches entail? With respect to those sectors, what features of the current policy landscape are working well, or less well, to advance resilience?

6. Across sectors, how does access to capital equipment, manufacturing equipment and technology support supply chain resilience for U.S. producers, and is there a role for trade and investment policy?

7. How can the development of technical standards and regulations support supply chain resilience?

8. There is concern that preferential rules of origin in free trade agreements can operate as a “backdoor” benefiting goods and/or firms from countries that are not party to the agreements and are not bound by labor and environmental commitments. What actions could be taken to mitigate these risks and maximize production in the parties? What policies could support strong rules of origin and adherence to rules of origin?

9. What factors are driving supply chain and sourcing decisions, and how does trade and investment policy impact them? How do companies factor geopolitical risk into their global and domestic manufacturing and sourcing decisions? How do companies take into account traceability and transparency considerations in supply chain and sourcing decisions?

10. To what extent is supply chain resilience shaping capital allocation decisions among industry and investors?

11. How can supply chain resilience be measured, including the costs of insufficient resilience, and the impacts of trade and investment policy on resilience? What are appropriate quantitative or qualitative data to consider?

12. How can U.S. trade and investment policy support supply chains that are inclusive of small, disadvantaged businesses and underserved businesses, including minority-owned and women-owned businesses, veteran-owned businesses, service-disabled veteran owned small businesses and HUBZone businesses, and promote trade opportunities in underserved communities?

Comments received and testimony provided at the public hearing scheduled for May 2, 2024 will help USTR develop sector-specific policy tools, strengthen domestic manufacturing and services, collaborate with like-minded trading partners and allies and measure resilience, among other topics. 

How BDO Can Help

BDO can assist clients in reviewing their global supply chain footprint (especially using the software for supply chain mapping, for which BDO has an exclusive arrangement with Alba Wheels Up, a prominent U.S. customhouse broker).

BDO’s customs and international trade services group also specializes in classifying goods under the global Harmonized Commodity Description and Coding system, as well as Bill of Materials qualification, to ensure merchandise is being duly imported and the correct duty rates are paid. If you believe you need to correct information previously entered on entry documents, BDO can also assist with preparing and filing Protests, Post Summary Corrections, and Prior Disclosures, along with petitions for mitigation in fines and penalties.