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href=”https://www.law360.com/#”>Linda Chiem
Law360 (March 1, 2022, 11:25 PM EST) — President Joe Biden said the U.S. will ban Russian aircraft from American airspace as punishment for Russia’s invasion of Ukraine, unveiling the retaliatory measures in his first State of the Union address Tuesday night alongside a domestic economic recovery plan centered on rebuilding American manufacturing and infrastructure.
As the Ukrainian crisis loomed large, Biden pressed for unity amid the hyperpartisan U.S. political climate and sought to reassure Americans he has a concrete plan to fix a U.S. economy battered by rising inflation, supply chain bottlenecks and other lingering effects of the COVID-19 pandemic.
Biden, who condemned Russian President Vladimir Putin’s “premeditated and totally unprovoked” assault on Ukraine, announced all passenger, cargo and private jets owned, registered or chartered by Russians would be prohibited from flying over U.S. airspace by end of day on Wednesday.
The European Union and Canada have already similarly banned Russian aircraft from flying in their respective airspaces.
The U.S. flight ban comes on the heels of economic sanctions coordinated by the Biden administration and NATO allies to isolate Russia from the world, which already include cutting off selected Russian banks from the SWIFT global financial messaging system and blocking the country’s central bank from liquidating assets held abroad, among other things.
“And tonight I am announcing that we will join our allies in closing off American airspace to all Russian flights, further isolating Russia and adding an additional squeeze on their economy,” Biden said. “He has no idea what’s coming … The Russian economy is reeling and Putin alone is the one to blame.”
The U.S. Department of Transportation announced Tuesday night it will issue a “notice to air missions” and regulatory orders “effectively closing U.S. airspace to all Russian commercial air carriers and other Russian civil aircraft.”
“The U.S. stands with our allies across the world in responding to Putin’s unprovoked aggression against the people of Ukraine,” U.S. Transportation Secretary Pete Buttigieg said in a Tuesday statement.
Transportation And Infrastructure Projects
Biden laid out a domestic economic recovery agenda, which banks on further implementing the bipartisan Infrastructure Investment and Jobs Act he signed into law last November.
Alongside doling out grants for once-in-a-generation investments in highways, bridges, transit systems, railways, clean water, power grids and broadband, Biden is laser focused on strengthening supply chains, and expanding electric vehicle fleets and charging stations nationwide.
States, territories, tribal and local governments are gearing up to improve 65,000 miles of roads and 1,500 bridges with federal funding, representing a 44% and 50% increase, respectively, from average annual improvement levels over the past six years, according to a White House fact sheet.
The new investments will also go to hundreds of Federal Aviation Administration airport infrastructure projects, and helping the U.S. Army Corps of Engineers move ahead with more than 500 projects intended to strengthen supply chains, improve waterways and reduce flooding.
“We’re going to have an infrastructure decade,” Biden said. “It is going to transform America and put us on a path to win the economic competition of the 21st century that we face with the rest of the world, particularly with China … We’ll create good jobs for millions of Americans, modernizing roads, airports, ports, and waterways all across America. And we’ll do it all to withstand the devastating effects of the climate crisis and promote environmental justice.”
U.S. Manufacturing Renaissance
Biden wants to go big in bringing back American manufacturing, emphasizing that “When we use taxpayer dollars to rebuild America, we are going to Buy American: Buy American products to support American jobs.”
“We will buy American to make sure everything from the deck of an aircraft carrier to the steel on highway guardrails are made in America from beginning to end,” he said.
One notable example, according to Biden, is Intel Corp.’s recent announcement that it will invest $20 billion in building new chip manufacturing facilities outside of Columbus, Ohio. The endeavor is expected to create 7,000 construction jobs and another 3,000 permanent jobs.
“Just look around and you’ll see an amazing story,” he said. “The rebirth of the pride that comes from stamping products ‘Made In America.’ The revitalization of American manufacturing. Companies are choosing to build new factories here, when just a few years ago, they would have gone overseas. That’s what’s happening.”
Detroit auto giants also got a big shoutout Tuesday night.
Biden touted Ford Motor Co.’s plans to invest $11 billion in building electric vehicles and batteries at facilities in Tennessee and Kentucky, as well as General Motors Co.’s $7 billion investment in boosting battery cell and electric-truck manufacturing capacity at Michigan facilities.
“We have a choice. One way to fight inflation is to drive down wages and make Americans poorer. I have a better idea to fight inflation,” Biden said. “Lower your costs, not your wages.”
“That means, make more cars and semiconductors in America. More infrastructure and innovation in America. More goods moving faster and cheaper in America. More jobs where you can earn a good living in America,” he said. “And instead of relying on foreign supply chains, let’s make it in America. Economists call it ‘increasing the productive capacity of our economy.’ I call it building a better America.”
Ocean Shipping Competition
Biden also vowed to promote fair competition in the U.S. economy, specifically noting that the ocean carrier shipping industry is in his crosshairs.
“I’m a capitalist, but capitalism without competition isn’t capitalism. It’s exploitation and it drives up prices,” he said. “We see it happening with ocean carriers moving goods in and out of America. During the pandemic, about half a dozen or less foreign-owned companies raised prices by as much as 1,000% and made record profits. Tonight, I’m announcing a crackdown on these companies overcharging American businesses and consumers.”
Biden already said last year he’d be keeping a close eye on the rapidly consolidating global maritime shipping marketplace, where more than 80% of the market is controlled by three global alliances comprising the 10 largest container shipping companies.
To that end, the U.S. Department of Justice and the Federal Maritime Commission announced Monday they would beef up their collaboration on enforcing competition laws in the industry.
And the FMC has already vowed to ramp up its oversight to address complaints about rising fees being charged by ocean carriers.
“Competition in the maritime industry is integral to lowering prices, improving quality of service and strengthening supply chain resilience. Expanding joint enforcement partnerships like the partnership between the FMC and DOJ is one of our most powerful tools for promoting competition,” U.S. Attorney General Merrick Garland said in a Monday statement.
“The attorney general and I share both the priority of a competitive marketplace and a commitment to pursue enforcement actions when necessary,” FMC Chairman Daniel B. Maffei also said in a Monday statement.
“Our agencies have a history of cooperating to the benefit of the American consumer and this new support will help ensure that the working relationship will help both government entities in our shared goal of fair competition,” he said.
Ahead of Biden’s address, the World Shipping Council, the lead industry trade group representing the international ocean liner shipping industry, said it’s “unfortunate that the president is demonizing ocean carriers, the industry that is the backbone of the U.S. and global economy and that has been working around the clock through the pandemic to move more cargo than at any time in history.”
“Allegations that the container shipping industry is highly concentrated and uncompetitive are factually incorrect,” the World Shipping Council said in a Monday statement. “Ocean carriers actively compete against one another in the global marketplace, including on the shipping lanes most relevant for U.S. trade, while concentration levels in many other U.S. industries are markedly higher than those in container shipping.”
The group, which said competition increased in 2021 with more ships operated by a larger pool of carriers serving the trans-Pacific trade, took aim at proposed legislation seeking to expand the FMC’s oversight of ocean carriers and give importers a broader avenue to bring disputes against their shipping partners.
The U.S. House of Representatives passed the bill with broad bipartisan support in December 2021 and it’s currently pending before the Senate Committee on Commerce, Science, and Transportation.
The World Shipping Council said the “deeply flawed Ocean Shipping Reform Act passed by the House will not solve the landside logistics breakdowns that are at the heart of America’s supply chain problems. In fact, the legislation as written would make existing congestion worse and stifle innovation.”
–Editing by Lakshna Mehta.
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