International Trade and Finance: Overview and Issues for the 118th Congress

International Trade and Finance: Overview and Issues for the 118th Congress

International Trade and Finance: Overview and April 7, 2023
Issues for the 118th Congress
Danielle M. Trachtenberg,
The congressional role in U.S. trade policy includes setting priorities for trade negotiations,
Coordinator
requiring notification from or consultation with the executive branch on select issues, enacting
Analyst in International
laws authorizing trade policy programs and measures, granting appropriations, and conducting
Trade and Finance
oversight of trade-related programs and agencies. Article I, Section 8 of the U.S. Constitution

grants Congress the authority to collect taxes and regulate international commerce. Congress has
Andres B. Schwarzenberg,
delegated some of these powers to the executive branch, such as the authority to set tariffs,
Coordinator
negotiate and enforce trade agreements, and regulate trade for foreign policy and national
Analyst in International
security purposes. As a result, Congress has often worked closely with the executive branch to
Trade and Finance
develop and implement U.S. policy on international trade and finance.

The 118th Congress may legislate and conduct oversight on a wide-ranging set of trade policy
Christopher A. Casey,
Coordinator
issues that includes national security concerns and new executive-led trade initiatives. National
Analyst in International
security and economic challenges may include issues posed by China’s state-led economy, export
Trade and Finance
and investment controls, sanctions on Russia, and privacy concerns related to cross-border data

flows. New bilateral or regional trade initiatives launched under the Biden Administration cover
select trade and economic issues such as supply chains, clean energy, and anticorruption but

exclude commitments to reduce or eliminate tariffs. Congress may have a role in shaping new
trade initiatives such as the Indo-Pacific Economic Framework for Prosperity (IPEF) and the U.S.-Taiwan Initiative on 21st
Century Trade, and determining the extent of the congressional role in the negotiation and implementation of agreements that
do not make commitments to change the U.S. tariff schedule. The 118th Congress may also continue to examine issues related
to labor (e.g., enforcement of labor commitments under trade agreements and forced labor) and advanced technology issues
(e.g., semiconductors). These issues may be the subject of further debate and legislative action. Congress may also consider
emerging issues related to reorganizing supply chains and countering growing Chinese influence in the digital space, through
hearings and other forms of oversight, and by working with the executive branch to set priorities in trade discussions.
This report provides a brief overview of select topics that were the subject of discussion in the 117th Congress and that may
come before the 118th Congress. It also includes a compilation of CRS In Focus briefs that provide concise background
information on select topics in international trade and finance.
Congressional Research Service

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Contents
Introduction ..................................................................................................................................... 1
Overview of U.S. Trade Policy ........................................................................................................ 3
Congress and Trade ......................................................................................................................... 3
Select Key Areas of Trade Policy .................................................................................................... 3
Trade Agreements and Relations with Select Key Trading Partners ............................................... 4
U.S.-China Economic Relations ...................................................................................................... 4
U.S.-Russia Economic Relations ..................................................................................................... 5
Key Laws to Address Unfair Trade Practices and Other Concerns ................................................. 5
Trade and Labor Issues .................................................................................................................... 5
Trade and Currency Issues .............................................................................................................. 5
Trade and National Security Issues ................................................................................................. 6
Trade Financing Agencies and Preference Programs ...................................................................... 6
International Financial Institutions .................................................................................................. 6

Contacts
Author Information .......................................................................................................................... 6

Congressional Research Service

International Trade and Finance: Overview and Issues for the 118th Congress

Introduction
Article 1, Section 8 of the U.S. Constitution grants Congress the authority to collect taxes and
regulate international commerce. Since the Reciprocal Trade Agreements Act of 1934, Congress
has delegated some of these powers to the executive branch, which has the constitutional
authority to conduct foreign relations and negotiate treaties. For example, Congress has
authorized the executive branch to set tariffs, make and enforce certain trade agreements, and
regulate trade for foreign policy and national security purposes. Congress has often worked
closely with the executive branch to manage U.S. policy on international trade and finance by
setting priorities, requiring notification from or consultation with the executive branch on select
issues, enacting laws authorizing trade policy programs and measures, granting appropriations,
and conducting oversight of trade-related programs and agencies.
Members of the 118th Congress may have an opportunity to help shape the Biden
Administration’s trade policy agenda and define congressional priorities related to trade through
legislation, appropriations, hearings and other forms of oversight. The Administration has
articulated a wide-ranging set of priorities in international trade. Of particular focus for the
Administration have been the competitive and economic challenges posed by the People’s
Republic of China (PRC or China), economic sanctions against the Russian Federation (Russia),
and prospective new trade initiatives such the Indo-Pacific Economic Framework for Prosperity
(IPEF), the Americas Partnership for Economic Prosperity (APEP), and the U.S.-Taiwan
Initiative on 21st-Century Trade. The Administration also has focused on enhancing cooperation
with other countries, such as potential discussions in APEP on reorganizing supply chains to
include more countries in the Western Hemisphere, and renewed cooperation with the European
Union (EU) in the U.S.-EU Trade and Technology Council (TTC) on issues related to emerging
technologies. Additionally, the Administration’s “worker-centered” trade policy suggests that
enforcement of worker rights provisions and the impact of trade policies on U.S. workers may
continue to be a focus. Emerging issues related to the privacy of cross-border data flows, export
and investment controls of advanced technologies, the use of green technologies, and supply
chain resiliency may grow in importance in U.S. trade policy.
Below is a brief overview of select issues that were the subject of discussion and debate in the
117th Congress, and that may come before the 118th Congress:
 Congress and Free Trade Agreements. Free trade agreements (FTAs) that
reduce barriers to trade (e.g., tariffs) between members have historically been a
core component of U.S. trade policy, and Congress has played a key role in
authorizing and implementing certain agreements. A central component of the
cooperation between Congress and the executive branch in this area is Trade
Promotion Authority (TPA). Under TPA, Congress has established objectives for
the executive branch to pursue in trade negotiations, requirements for notification
from and consultation with the executive branch on select issues, and expedited
procedures for Congress to consider implementing legislation for trade
agreements that advance those objectives and requirements. Congress passed the
most recent TPA in 2015 (P.L. 114-26); the authorization expired in July 2021.
The Biden Administration has not announced any plans to seek a renewal of TPA
and instead has launched trade initiatives (e.g., IPEF) that focus on targeted
issues, do not involve commitments that require changes to the tariff schedule or
U.S. law, and therefore may not require congressional action. A major issue for
the 118th Congress may be determining the extent of the congressional role in the
negotiation and implementation of limited-scope trade initiatives.
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International Trade and Finance: Overview and Issues for the 118th Congress

 U.S.-China Economic Relations. The U.S.-China trade and economic
relationship is complex and wide-ranging. China is an important global market
for the United States, but China’s state-driven economic policies result in
significant trade barriers and a lack of reciprocity in key areas for U.S. firms.
Issues such as reducing U.S. dependency on supply chains involving China
prompted legislation in the 117th Congress (e.g., P.L. 117-167, commonly
referred to as the CHIPS and Science Act). Core systemic issues, such as the role
of the state in China’s corporate activity and China’s practices related to
industrial and technology policies and human rights, may continue to motivate
Members to pursue legislation or oversight activities related to China in the 118th
Congress. Export controls, U.S. firms’ investments or activities in China,
investment in U.S. lands by China, and privacy and security risks to U.S. users
from Chinese-owned smartphone applications (e.g., TikTok) are also issues of
ongoing congressional focus.
 Economic Sanctions on Russia. In response to Russia’s ongoing war against
Ukraine, a broad, multilateral coalition of U.S. allies and partners imposed
unprecedented and wide-ranging sanctions on Russia that target Russia’s
financial and energy sectors, Russia’s access to western technology, and the
overseas wealth and economic activities of Russia’s elite. The sanctions have
imposed costs on Russia and disrupted global energy markets. The Biden
Administration implemented most sanctions through executive orders. The 118th
Congress may consider whether to codify sanctions, the effectiveness and intent
of sanctions, the role for new sanctions, the impact of sanctions on the U.S.
economy, and other issues related to multilateral cooperation on sanctions.
 Worker Rights. Worker rights are a prominent issue in U.S. trade policy. The
Biden Administration has pursued a “worker-centered” trade policy and interest
in trade-related issues regarding forced labor, labor standards, and enforcement of
labor provisions increased in the 117th Congress. In particular, the 117th Congress
passed, and the President signed, legislation to prohibit goods produced or
manufactured with forced labor in China’s Xinjiang Uygur Autonomous Region.
Some Members of Congress also took positions on the negotiation and
implementation of more enforceable worker rights provisions and a labor-specific
dispute settlement mechanism in the U.S.-Mexico-Canada Agreement (USMCA),
which went into effect in 2020. The 118th Congress may consider issues related to
the implementation and effectiveness of labor provisions in U.S. trade
agreements, especially with regard to worker rights; the operation of the USMCA
mechanism and ability of Mexico to implement its labor reforms; and whether
and how to strengthen U.S. and global labor standards, such as in ongoing U.S.
trade initiatives and in multilateral institutions.
 Digital Trade, Data Policy, and Technology. Trade policy issues related to
technology and industrial policy, digital trade, data flows and data privacy, the
role of digital platforms, and cybersecurity, among others, are likely to remain
active in the 118th Congress. In assessing U.S. trade policy approaches to digital
trade, Congress may examine issues related to protecting personal data of U.S.
citizens, including whether comprehensive federal data privacy legislation is
necessary and, if so, what the objectives would be with respect to treatment of
cross-border flows of sensitive data on U.S. citizens. For example, Congress may
assess how best to balance prohibitions on data localization requirements that
ensure uninterrupted cross-border data flows with protections to address privacy
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International Trade and Finance: Overview and Issues for the 118th Congress

and national security concerns. Congress may also consider setting negotiating
priorities on digital trade for ongoing trade discussions (e.g., IPEF). Priorities
may include setting best practices for new technologies, the role of U.S.-EU
cooperation on trade and technology issues, including continued discussions over
electric vehicle tax credits in the United States, and countering China’s growing
influence in the digital space. Export controls and regulation on inbound and
outbound investment in advanced technology sectors also are likely to receive
continued attention in the 118th Congress.

This compilation of CRS In Focus products provides a broad overview of select topics in
international trade and finance, including the topics mentioned above and issues such as
international institutions, government procurement, intellectual property rights, foreign direct
investment, trade remedies, preference programs and relations with major trading partners. Each
brief provides concise background information on select issues that may come before the 118th
Congress. The products also may include references to more in-depth CRS reports on the issues.
Overview of U.S. Trade Policy
CRS In Focus IF10156, U.S. Trade Policy: Background and Current Issues, by Shayerah I.
Akhtar, Cathleen D. Cimino-Isaacs, and Karen M. Sutter
CRS In Focus IF11016, U.S. Trade Policy Functions: Who Does What?, by Shayerah I. Akhtar
CRS In Focus IF11030, U.S. Tariff Policy: Overview, by Christopher A. Casey
CRS In Focus IF10636, Foreign Direct Investment: Background and Issues, by Shayerah I.
Akhtar, Cathleen D. Cimino-Isaacs, and Andres B. Schwarzenberg
CRS In Focus IF10002, World Trade Organization, by Cathleen D. Cimino-Isaacs
Congress and Trade
CRS In Focus IF10038, Trade Promotion Authority (TPA), by Christopher A. Casey and Cathleen
D. Cimino-Isaacs
CRS Infographic IG10001, Trade Promotion Authority (TPA) and U.S. Trade Agreements
Timeline, by Christopher A. Casey and Cathleen D. Cimino-Isaacs
CRS In Focus IF11400, Presidential Authority to Address Tariff Barriers in Trade Agreements, by
Christopher A. Casey and Brandon J. Murrill
Select Key Areas of Trade Policy

CRS In Focus IF12347, Digital Trade and Data Policy: Select Key Issues, by Danielle M.
Trachtenberg
CRS In Focus IF10166, Environmental Provisions in Free Trade Agreements (FTAs), by Richard
K. Lattanzio and Christopher A. Casey
CRS In Focus IF10033, Intellectual Property Rights (IPR) and International Trade, by Shayerah
I. Akhtar and Liana Wong
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International Trade and Finance: Overview and Issues for the 118th Congress

CRS In Focus IF11580, U.S. Government Procurement and International Trade, by Andres B.
Schwarzenberg
CRS In Focus IF12119, Industrial Policy and International Trade, by Andres B. Schwarzenberg
CRS In Focus IF11035, Managed Trade and Quantitative Restrictions: Issues for Congress, by
Andres B. Schwarzenberg
Trade Agreements and Relations with Select Key
Trading Partners
CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement, by M. Angeles
Villarreal
CRS In Focus IF11175, U.S.-Mexico Trade Relations, by M. Angeles Villarreal
CRS In Focus IF10394, Dominican Republic-Central America-United States Free Trade
Agreement (CAFTA-DR), by M. Angeles Villarreal
CRS In Focus IF12373, Indo-Pacific Economic Framework for Prosperity (IPEF), by Cathleen
D. Cimino-Isaacs, Kyla H. Kitamura, and Mark E. Manyin
CRS In Focus IF10733, U.S.-South Korea (KORUS) FTA and Bilateral Trade Relations, by Liana
Wong and Mark E. Manyin
CRS In Focus IF12078, CPTPP: Overview and Issues for Congress, by Cathleen D. Cimino-
Isaacs
CRS In Focus IF11891, Regional Comprehensive Economic Partnership (RCEP), coordinated by
Cathleen D. Cimino-Isaacs
CRS In Focus IF11120, U.S.-Japan Trade Agreement Negotiations, by Cathleen D. Cimino-Isaacs
CRS In Focus IF10256, U.S.-Taiwan Trade Relations, by Karen M. Sutter
CRS In Focus IF10931, U.S.-EU Trade and Economic Relations, by Shayerah I. Akhtar
CRS In Focus IF11123, U.S.-UK Trade Relations, by Shayerah I. Akhtar
CRS In Focus IF10384, U.S.-India Trade Relations, by Shayerah I. Akhtar and K. Alan Kronstadt
CRS In Focus IF10447, U.S.-Brazil Trade Relations, by M. Angeles Villarreal and Andres B.
Schwarzenberg
U.S.-China Economic Relations
CRS In Focus IF11284, U.S.-China Trade Relations, by Karen M. Sutter
CRS In Focus IF12125, U.S.-China Phase One Trade Deal, by Karen M. Sutter
CRS In Focus IF11667, China’s Economy: Current Trends and Issues, by Karen M. Sutter and
Michael D. Sutherland
CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by
Karen M. Sutter
CRS In Focus IF11684, China’s 14th Five-Year Plan: A First Look, by Karen M. Sutter and
Michael D. Sutherland
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International Trade and Finance: Overview and Issues for the 118th Congress

CRS In Focus IF11735, China’s “One Belt, One Road” Initiative: Economic Issues, by Karen M.
Sutter, Andres B. Schwarzenberg, and Michael D. Sutherland
CRS In Focus IF11627, U.S. Export Controls and China, by Karen M. Sutter and Christopher A.
Casey
CRS In Focus IF11803, U.S. Capital Markets and China: Issues for Congress, by Michael D.
Sutherland and Karen M. Sutter
CRS In Focus IF12212, U.S.-China Auditing Agreement and Issues for Congress, by Karen M.
Sutter, Michael D. Sutherland, and Raj Gnanarajah
U.S.-Russia Economic Relations
CRS In Focus IF12092, The Economic Impact of Russia Sanctions, by Rebecca M. Nelson
CRS In Focus IF12062, Russia’s War on Ukraine: Financial and Trade Sanctions, coordinated by
Rebecca M. Nelson
CRS In Focus IF12066, Russia’s Trade and Investment Role in the Global Economy, by Andres
B. Schwarzenberg
CRS In Focus IF12120, China’s Economic and Trade Ties with Russia, by Karen M. Sutter and
Michael D. Sutherland
Key Laws to Address Unfair Trade Practices and
Other Concerns
CRS In Focus IF10018, Trade Remedies: Antidumping and Countervailing Duties, by
Christopher A. Casey
CRS In Focus IF10786, Safeguards: Section 201 of the Trade Act of 1974, by Liana Wong
CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg
Trade and Labor Issues
CRS In Focus IF11360, Section 307 and Imports Produced by Forced Labor, by Christopher A.
Casey and Cathleen D. Cimino-Isaacs
CRS In Focus IF10046, Worker Rights Provisions in Free Trade Agreements (FTAs), by Cathleen
D. Cimino-Isaacs and M. Angeles Villarreal
CRS In Focus IF10972, Labor Enforcement Issues in U.S. FTAs, by Cathleen D. Cimino-Isaacs
CRS In Focus IF10570, Trade Adjustment Assistance for Workers (TAA), by Benjamin Collins
Trade and Currency Issues
CRS In Focus IF10049, Exchange Rates and Currency Manipulation, by Rebecca M. Nelson
CRS In Focus IF11707, The U.S. Dollar as the World’s Dominant Reserve Currency, by Rebecca
M. Nelson and Martin A. Weiss
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International Trade and Finance: Overview and Issues for the 118th Congress

CRS In Focus IF11885, De-Dollarization Efforts in China and Russia, by Rebecca M. Nelson and
Karen M. Sutter
Trade and National Security Issues
CRS Infographic IG10012, The International Emergency Economic Powers Act: Key Facts, by
Christopher A. Casey
CRS In Focus IF11154, Export Controls: Key Challenges, by Christopher A. Casey
CRS In Focus IF10177, The Committee on Foreign Investment in the United States, by Cathleen
D. Cimino-Isaacs
Trade Financing Agencies and Preference Programs
CRS In Focus IF10017, Export-Import Bank of the United States (Ex-Im Bank), by Shayerah I.
Akhtar
CRS In Focus IF11436, U.S. International Development Finance Corporation (DFC), by
Shayerah I. Akhtar and Nick M. Brown
CRS In Focus IF11232, Generalized System of Preferences (GSP), by Liana Wong
CRS In Focus IF10149, African Growth and Opportunity Act (AGOA), by Liana Wong
International Financial Institutions
CRS In Focus IF10676, The International Monetary Fund, by Martin A. Weiss
CRS In Focus IF11361, The World Bank, by Rebecca M. Nelson
CRS In Focus IF12107, Ukraine and International Financial Institutions, by Martin A. Weiss

Author Information

Danielle M. Trachtenberg, Coordinator
Christopher A. Casey, Coordinator
Analyst in International Trade and Finance
Analyst in International Trade and Finance

Andres B. Schwarzenberg, Coordinator

Analyst in International Trade and Finance

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International Trade and Finance: Overview and Issues for the 118th Congress

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