A no-show from the office of U.S. Trade Representative Robert Lighthizer at a White House meeting to discuss ending a tariff loophole this week left participants feeling “defeated” and questioning the administration’s commitment to President Trump’s America First policy agenda.
The 10-person meeting on solar equipment imports, which included the deputy director of the National Economic Council, the head of policy for the office of Vice President Mike Pence, an assistant secretary from the Department of Commerce, and senior officials from the National Security Council and White House Trade and Manufacturing Director Peter Navarro’s office, was originally scheduled to take place over the phone last Friday. It was moved to the White House once the NSC became involved.
The dispute up for discussion was over a Section 201 tariff exemption for bifacial, or two-sided, solar panels. After Lighthizer moved to close it last year, opponents of the rescission sued USTR, saying they had violated the Administrative Procedures Act. Opponents fear the exemption harms domestic manufacturers.
“Everyone was like, yep, we really need to do something, we’ve really got to unring this bell, we’ve got to fix this,” a source with knowledge of the discussion said. “It’s a huge issue that we need to resolve so we don’t lose major investments for U.S. manufacturing — hundreds of U.S. jobs are at stake.”
Several senior White House officials are on the record calling for a fix, including Trump’s top manufacturing adviser Navarro, who “cares a lot about it” and has raised the issue several times with Trump. Publicly, he has called for the exemption “to be slammed shut.” Lighthizer, whose office allowed the exemption in June 2019, has tried to claw it back.
The exemption led to a flood of imports, underpricing and harming U.S. manufacturers. It has since been reinstated and revoked numerous times, including twice this year alone.
But failure to close the loophole has “Buy America” advocates questioning the White House’s resolve. Trump has made stimulating manufacturing and buying U.S. products a centerpiece of his agenda.
“It seems like a no-brainer: Why you would let the Chinese continue to flood the market with this loophole that they advocated for?” a source briefed on the meeting said. “The president can pull back the exclusion, but he hasn’t done it yet. So we’re, like, ‘Earth to the White House. Can you help?’”
A memo drafted earlier this month by USTR on moving forward with the exclusion is still awaiting the Department of Commerce’s concurrence, which is unlikely to come due to differences between how the departments view the president’s agenda.
“USTR created a huge loophole where none existed,” a source said. “You’re undermining the greatest energy success story in the manufacturing space for the Trump administration … We drove foreign manufacturers to build factories and hire Americans in the United States, a slam dunk for the president.”
Trump’s newly appointed deputy director of the National Economic Council, Francis Brooke, a former White House energy policy aide, has also drawn attention for his relative inexperience. “He is in the information-gathering mode,” a source said.
Advocates for ending the exemption also say congressional Republicans whose states and districts house manufacturers affected by the loophole could be doing more.
“It’s frustrating,” this person said, likening what they said was a breach between administration rhetoric and action as a “wink-and-nod approach” to manufacturing policy. “Trump says one thing, but his staff can’t seem to follow through.”
Critics noted that this is not the only “Buy America” initiative that appears to be floundering. “We’ve been hearing about pharmaceuticals for, gosh, four months now,” a source said.
The White House was sent “scrambling” two weeks ago, a source said, when the presumptive Democratic presidential candidate Joe Biden rolled out his “Build Back Better” program to bolster American manufacturing, jobs, and research through a sizable infusion of federal dollars if he were to be elected president.
Biden’s plan also proposes tightening current “Buy American” laws and closing trade loopholes, moves that Trump’s former chief strategist, Steve Bannon, applauded the Democrat for having pulled from the president’s “playbook.”
“They are essentially trying to steal the Trump program of 2016 and … that playbook,” Bannon said in an episode of his radio show following Biden’s announcement.
“I tip my hat to them,” he told the American Conservative.
USTR did not respond to a request for comment.
