Mara Lee

The House Ways and Means Committee grappled with the fact that tariffs might be painful enough for China to change course on its unfair trade practices but that protecting mills and smelters will hurt factories. China's retaliatory tariffs, in turn, will hurt agriculture and chemical exporters. Committee Chairman Kevin Brady, R-Texas, said during a hearing on the effects of new tariffs that he wants enforceable trade policies to target bad actors, but said, "at the same time, we must avoid unintended consequences that hurt Americans."

President Donald Trump told reporters at the White House that NAFTA negotiations are going great, and while he also said "we're pretty close to a deal," he dismissed talk that the U.S. is pushing to reach a tentative agreement in early May. "It could be three or four weeks, it could be two months it could be five months, I don’t care,” Bloomberg quoted him saying on April 12. “So the narrative of I’m pushing for a deal -- I never push for a deal. I don’t care. In fact, if everybody in this room closed their ears I’d say that I’d rather terminate NAFTA and do a brand new deal but I’m not going to do that because I’d rather everybody to be happy in this room, okay?"

President Donald Trump instructed staff members to explore having the U.S. rejoin the Trans-Pacific Partnership, during an April 12 meeting on trade with Congress members and governors from farm states. Sen. Ben Sasse, R-Neb., said in a statement: “The best thing the United States can do to push back against Chinese cheating now is to lead the other eleven Pacific nations that believe in free trade and the rule of law. It is good news that today the President directed Larry Kudlow and ... [U.S. Trade Representative Robert] Lighthizer to negotiate U.S. entry into TPP.” Sen. John Thune, R-S.D., called the president's openness to rejoining negotiations encouraging in a tweet after the meeting. However, negotiations are complete on the TPP, as the other 11 countries -- including major trading partners Japan, Canada and Mexico -- have already signed the agreement.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, said that a NAFTA agreement in principle is not enough to start the clock toward a ratification vote under Trade Promotion Authority. The law says the earliest Congress can vote to approve or reject the deal is 90 days after the president announces his intention to sign the deal. But if there is any change to Chapter 19, Congress and the public must have a minimum of 180 days to examine it. Either timeline cannot begin just from a press release or memo. "The text needs to be generally ready for the public to be able to review [for that period] before the president can sign it and send it to us," Brady told reporters on April 10.

A coalition of Canadian unions called Unifor and Public Citizen, a longtime critic of NAFTA, are both circulating petitions in the hopes of pressuring their countries' politicians. On the Canadian petition, Unifor says: "Unions have warned since the deal between Canada, the United States and Mexico came into effect in 1994 that it would hurt working people in all three countries. In the decades since, we have been proven right." An "Agreement in Principle" would commit "us to a deal without knowing the specifics," Unifor said. "We can't let this happen. Add your voice to show Prime Minister Justin Trudeau and Minister Chrystia Freeland that they can't sign another bad trade deal without even knowing what's in it." Public Citizen's petition says that "if we organize ourselves and demand pro-people trade policy from our elected officials then we can win."

China says that the U.S. decision to levy 25 percent tariffs on imported steel from some parts of the world, and 10 percent tariffs on aluminum, was not fair and impartial, and also violated World Trade Organization agreements by not treating all nations in the WTO equally with regard to the tariffs. Under WTO rules, countries are not allowed to raise tariffs above bound rates on some countries but not others in most circumstances. The U.S. used the Section 232 national security exemption from that rule, but China dismisses that assertion, and says that these tariffs are safeguards in disguise. Earlier, China asked for consultations on compensation for the safeguard tariffs (see 1803260025), and this latest request for consultations, posted April 10, tackles the legality of the action. China says the U.S. ignored the rules on how to implement safeguard tariffs. Those rules say that a country has to prove a surge in imports is harming or will harm domestic producers. The U.S. has already responded to China's earlier request for consultations by saying that these are not safeguard tariffs.

The European Union and Japan would like to join the negotiations with the U.S., as the World Trade Organization attempts to tackle the problem of forced joint ventures, tech transfer and other violations of intellectual property rights in China. The EU wrote that its members export 680 billion euros' worth of high tech products and services, and that protecting intellectual property rights is fundamentally important for that business. It also noted that it has 180 billion euros in investment in China. "Much of the investments are concluded under joint-venture requirements," according to the document, submitted April 5.

President Donald Trump tasked the Office of the U.S. Trade Representative with looking at adding another $100 billion in Chinese goods to the $50 billion already identified as part of the Section 301 investigation. "Rather than remedy its misconduct, China has chosen to harm our farmers and manufacturers," the White House said in a release. USTR promptly responded that tripling the size of the tariffs is appropriate, and promised to assemble a list. "Any additional tariffs proposed will be subject to a similar public comment process as the proposed tariffs" announced on April 3 and "no tariffs will go into effect until the respective process is completed," the agency said.

U.S. Trade Representative Robert Lighthizer has said he hopes to reshape NAFTA in a way that appeals to both Democrats and Republicans. Some of the most prominent critics in the House of Representatives on NAFTA said April 5 that while they appreciate some of his positions, he has a long way to go to convince them.

China disputed the legality of the Section 232 tariffs on steel and aluminum at the World Trade Organization (see 1803260025), and now the U.S. is disputing both the characterization of those tariffs and how China has responded to them. The tariffs were for national security, and not to protect domestic industry from rising imports, asserted Deputy U.S. Trade Representative Dennis Shea, ambassador to the WTO. China's decision on April 2 to implement tariffs on pork, aluminum scrap and other U.S. exports were not justified, Shea wrote in a letter to China's WTO ambassador, since China can only use the safeguards to respond to safeguards, and the U.S. measures were not safeguards. "China has asserted no other justification for the measures, and the United States is aware of none," he wrote. "Therefore, it appears that China's actions have no basis under WTO rules."