The Trump Administration has issued its 2019 trade policy agenda in a several hundred page report to the Congress. The report covers a broad range of trade topics, many of which have been at the forefront of the Administration’s agenda for the past couple of years. These include renegotiating the NAFTA into the USMCA, WTO
Trump Reconsiders TPP Stance, May Have Renewed Interest in Multilateral Agreement
Ahead of talks with Japanese Prime Minister Shinzo Abe scheduled for this week, President Trump told a group of governors and lawmakers in a meeting on Thursday, April 12th that the United States was looking to rejoin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“TPP”). President Trump withdrew from the TPP in January, 2017, just days after his inauguration, calling the agreement a “disaster.”
On Friday April 13th, however, President Trump repeated his previous stipulation that the United States would “only join {the TPP} if the deal were substantially better than the deal offered to {President} Obama.” He explained that, “{the United States} already {has} BILATERAL deals with six of the eleven nations” in the TPP, and we “are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!”
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Trump Announces 25% Tariffs on Chinese Goods
As an update to an earlier blog post the Trump administration is using Section 301 of the Trade Act of 1974 to impose additional tariffs, up to $50 billion per year, on certain products manufactured in China and imported into the U.S. and has announced that the proposed list of affected products will be issued
Global Trade Flows Are Expanding, But Is There a Reason for Optimism?
Last Friday, the CPB Netherlands Bureau for Economic Policy Analysis, as part of its World Trade Monitor, reported that global trade flows – the volume of export and imports of goods – was 4.5% higher in 2017 than in 2016. This is an important finding because it marks the biggest rate of year-in-year expansion since the world began recovering from the global financial crisis, exceeding expectations for the year. According to the CPB World Trade Monitor, global trade flows grew 24% between January 2010 and December 2017.
Experts, however, are cautiously optimistic about the news and what it could mean for 2018. Last year, significant uncertainties about critical aspects of the global economy made it difficult to predict the track of trade growth. The WTO cited unpredictability with respect to government action on monetary, fiscal, and trade policy, and whether trade would be restricted in favor of attempts to address domestic wage stagnation and unemployment.
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President Trump Announces Tariffs on Solar Panels and Washing Machines
Yesterday, President Trump announced his decisions on two high-profile trade cases brought under Section 201 of the Trade Act of 1974, which authorizes import restraints to protect domestic industries that are seriously injured by imports. These cases, which involve solar panels and washing machines from a variety of countries, are the first affirmative actions under this statutory provision since 2002.
In the solar panel case, the President announced increased tariffs for four years, starting at 30 percent and declining five percent per year over the relief period. These tariffs are lower than those sought by the two domestic petitioners in the case, Solar World and Suniva. The sting of the tariffs is softened further by the exemption from additional duties for the first 2.5 gigawatts of solar panels that are imported each year.
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Trump Waives Secondary Sanctions on Iran, But Vows Not to do so Again Without Changes to the JCPOA
Last week the President begrudgingly extended waivers continuing to lift U.S. “secondary sanctions” on Iran. But the President also insisted that he will not issue further extensions without a renegotiation of certain aspects of the joint nuclear deal with Iran (the Joint Comprehensive Plan of Action or JCPOA), throwing the future of the deal and U.S. Iran policy further into doubt.
Before the JCPOA, the United States maintained a variety of so-called “secondary” sanctions on Iran, allowing the United States to penalize non-U.S. financial institutions and non-U.S. companies that engaged in certain transactions related to Iran, including those linked to the Iranian energy and petrochemical industry, the banking and finance sector, shipping, the automotive sector, and precious metals, among others. The secondary sanctions were purely extraterritorial in nature – they sought to dissuade non-U.S. companies
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In Rare Move, Trump’s Commerce Secretary Self-Initiates Chinese Aluminum Trade Remedy Cases
The U.S. Department of Commerce self-initiated antidumping and countervailing investigations of common alloy aluminum sheet from China on November 28. An accompanying fact sheet estimates dumping margins on the subject merchandise to be between 56.54 and 59.72 percent, and estimates a subsidy rate above de minimis. Trade cases are typically initiated in response to petitions filed by a domestic industry alleging that dumped or unfairly subsidized goods are being exported to the U.S. market. Self-initiation authority, however, can be exercised whenever the Secretary determines that a formal trade remedy investigation is warranted based on available information.
The Department’s use of self-initiation authority has been judicious and rare. In an agency-issued press release Secretary Wilbur Ross stated, “{w}e are self-initiating the first trade case in over a quarter century, showing once again that we stand in constant vigilance in support of free, fair, and reciprocal trade.” The Department further noted that it last self-initiated a countervailing duty investigation in 1991 on softwood lumber from Canada, and last self-initiated an antidumping duty investigation in 1985 on semiconductors from Japan.
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Schumer Urges Trump to Suspend All China-Related Mergers Pending Before CFIUS to Exact Tougher Approach on North Korea
Senate Minority Leader Charles Schumer wants President Trump to take a stand against China for its kids-gloves response to North Korea’s nuclear missile activity by using the Committee on Foreign Investment in the United States (CFIUS) to deny all pending requests involving Chinese acquisition of U.S. companies. President Trump has been critical of China for not using leverage within its means to pressure North Korea, and Schumer’s request, which would block Chinese company efforts to establish control of U.S. companies presently being reviewed by the Committee, aims to drive Beijing to take stronger action by wielding its perceived influence over North Korea.
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