As the final days of the Biden administration wind down, the U.S. Trade Representative, or USTR, has commissioned research aimed at evaluating the impact of current trade policies on micro, small and medium-sized enterprises (MSMEs) in the U.S., including textile and apparel businesses.
On Friday, ambassador Katherine Tai wrote to the chair of the U.S. International Trade Commission, or USITC, Amy Karpel, asking that the agency supplement its ongoing reporting, the Distributional Effects of Trade and Trade Policy on U.S. Workers, with a deeper investigation into the impact on MSMEs run by traditionally underserved groups like women, people living in remote and rural areas, members of diasporas and others living in overburdened communities without enough economic support.
The USITC has already published one report on the distributional effects that trade and policy can have on American businesses, and has five more reports slated to be released over the next 15 years.
“To ensure that U.S. trade and investment policy furthers its policy objectives of promoting economic security, supporting decent work and advancing the health and security of U.S. [MSMEs], it is critical that research and data analysis inform U.S. policy,” Tai wrote. The USTR said the research would “inform the development of trade policy that supports sustainable and inclusive economic growth.”
To be conducted under section 332(g) of the Tariff Act of 1930, the investigation should also discuss the distributional effects of trade and trade policy on MSMEs through the lens of race or ethnicity, gender, gender identity and orientation, age, skill, wage and income, disability, location and other factors.
Tai said USTR seeks to understand the extent to which these MSMEs are involved in the goods and services trade (both directly and indirectly), and their activities as both exporters and importers. The government aims to gain a fuller picture of the types of products, sectors and markets touched by U.S. MSME business over the course of the past five years, as well as an analysis of the major competitive factors that have contributed to their success in trade.
It also wants to know about the challenges and obstacles that inhibit these enterprises’ participation in the global trade landscape, Tai wrote. USITC should provide case studies showcasing successes as well as hurdles experienced by these communities, and an analysis of the kinds of trade and trade policy that have contributed to decision-making by MSMEs on expanding or contracting their operations, for example.
Analysis should also include information about how U.S. MSMEs are using digital platforms to bolster their international business, with a special focus on e-commerce platforms, she added.
In addition to gathering information about how MSMEs run by the stipulated parties operate, Tai said the investigation should home in on the activities of certain businesses, like those that operate as part of the upstream or downstream supply chain for other trading firms, MSMEs that are suppliers or customers of other companies in their communities that export or import goods and services directly, MSMEs that don’t currently export or import but that compete with importing firms from the same industry, MSMEs that aren’t currently engaged in trade but rely on trading firms in the same geographical area, and MSMEs that export to and import from regions of ethnic origin, like Africa, Asia, the Caribbean and Latin America.
The USTR hopes to gain knowledge on where these MSMEs are showing trade growth as well as increases or decreases in exports or imports. Tai specifically stipulated that the reporting should focus on businesses that produce textiles, yarns, fabrics, apparel and other finished goods, as well as aerospace, agriculture, cosmetics, critical minerals, metal, pharmaceutical products, semiconductors and renewable energy products.
Tai requested that the report be completed no more than 24 months, or two years, from the date of the letter — well into President-elect Donald Trump’s second term.
A previous report on the Distributional Effects of Trade and Trade Policy on U.S. Workers released by the USITC in November 2022 featured insights from workers across the U.S., detailing how the growth of global trade has created challenges at home.
“Several participants from worker groups described how international competition reduces the bargaining power of workers, leading to lower wages and benefits,” the report said. “One participant noted that jobs requiring different skills are often combined into a single position in order to stay competitive globally. He also indicated that increased competition resulting from trade agreements made employees less willing to push for better benefits (such as pensions) for fear it would hurt their company’s survival.”
At the time, Tai said such insights would be important to the future development and evolution of trade policy, though the Biden administration has demonstrated a notable inertia when it comes to the renewal of expiring trade agreements or the forging of new trade ties.
“In order to formulate and implement trade policies that will be effective in providing benefits to our economy, workers and communities, particularly those who have been historically underserved, we must be able to assess the impact of our existing trade policies on those communities and workers,” she said.
The USITC is currently working on the Distributional Effects of Trade and Trade Policy on U.S. Workers, 2026, which will be published on Jan. 20 of that year. As a part of the investigation, the commission plans to hold a number of virtual and in-person roundtables throughout winter and spring of 2025, focused around different issues like gender and gender identity, wage and income, race and ethnicity, disability and age and rural and urban poverty. Interested parties can sign up to participate on the USITC website.
