Hours after the U.S. put out its draft list of tariffs on $50 billion worth of Chinese goods (see 1804030055), China said it may impose tariffs on $50 billion worth of U.S. imports, including certain narrow-body and corporate jets, cars, SUVs, soybeans, beef, wheat, whiskey and chemicals. Trade lawyers and lobbyists and China economic experts didn't agree on much, but most expect that a negotiated settlement will not be reached in time to stop the tariffs.
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
China will respond proportionately to any U.S. tariffs implemented as part of the Section 301 investigation, Chinese Ambassador Cui Tiankai said while speaking on an English-language Chinese television station on April 2. If the U.S. does add tariffs as a result of that investigation as expected, "we will certainly take countermeasures of the same proportion, and of the same scale, same intensity," he said. The White House said the total value of goods subject to levies will be $50 billion (see 1803220034). Cui emphasized that the latest tariffs on U.S. imports (see 1804020009) were solely in response to the tariffs on steel and aluminum.
Parties that wish to add to or remove products from the Generalized System of Preferences, change the GSP status of beneficiary countries, waive competitive need limitations, or oppose de minimis waivers must file their petitions with the Office of the U.S. Trade Representative by midnight on April 16, the agency said in a notice. If an importer is interested in retaining GSP status for a product on the de minimis list -- a product for which total imports from all countries did not exceed $23.5 million in 2017 -- the importer does not need to make a request for a waiver. However, parties that wish to contest a de minimis waiver should do so at regulations.gov.
China raised tariffs on April 2 on all 128 U.S. products it identified in recent weeks after saying it would implement the safeguard tariffs in two phases (see 1803230008). Scrap aluminum and pork is now subject to a 15 percent tariff, while six other higher volume exports will be subject to 25 percent tariffs. "There are multiple commodities that will be affected by the trade war that’s starting," said Randy Goodman, executive vice president of scrap metal trading firm Greenland America.
Even though officials have trumpeted the rewrite of the U.S.-Korea Free Trade Agreement (KORUS) as historic and a win, President Donald Trump said in Ohio that he may hold back on signing it until talks with North Korea are held. The March 29 speech was supposed to be about infrastructure, but Trump spent at least half the time talking about other subjects, including trade.
Commerce Secretary Wilbur Ross, speaking on Bloomberg television, implied an exemption for Europe to steel and aluminum tariffs could be linked to a broader trade deal. Ross was responding to a Bloomberg TV reporter who said the European Commission said the U.S. was looking to negotiate the Transatlantic Trade and Investment Partnership, commonly called TTIP. Sen. John Cornyn, R-Texas, who is in the Senate leadership, tweeted out the March 29 story on March 30. Ross dismissed the idea that reopening TTIP is news. Trump "terminated the Trans-Pacific deal. He did not terminate TTIP. We're open to discussions with the European Commission. That is nothing new. That's a long-standing objective." Last year, the European Commission said it would like to talk again about the TTIP if there's the political will to do so (see 1710170018). Despite the extended timelines normally associated with negotiating comprehensive trade agreements, Ross did not say whether the EU's current tariff exemption would be extended beyond May 1, when the temporary exemption is scheduled to end.
The Office of the U.S. Trade Representative highlighted a handful of gains for U.S. exports in Japan, South Korea, Africa and South America while also highlighting irritants with China, India and Vietnam, in its annual National Trade Estimate Report. Aside from the lowering of trade barriers achieved in the rewritten U.S.-Korea Free Trade Agreement (KORUS), USTR noted that in January 2018, Japan recognized U.S. automobile safety standards for front and rear crashes, "thereby reducing the cost and burden for U.S. auto exporters." It also praised some anti-piracy actions in Peru and counterfeit seizures in Argentina. On the barriers side, the report again laid out the case against China that the Section 301 technology transfer enforcement action is based on. It also complained that India's price controls on knee implants and coronary stents, along with a refusal to allow U.S. companies to withdraw some products from the market, forces the U.S. to sell some products at a loss. "India has indicated it may apply similar price controls on additional medical devices."
Rwandan apparel exports will no longer receive benefits through the African Growth and Opportunity Act, because the small African country refused to back down from its coming ban on used clothing imports. The Office of the U.S. Trade Representative intends to suspend duty-free treatment for "all AGOA-eligible apparel products from Rwanda in 60 days." Increased tariffs on Rwandan apparel will have a minimal effect on trade figures between Rwanda and the U.S., according to the AGOA website. The U.S. exported $75 million worth of goods to Rwanda in 2016, and imported $26 million. Apparel is not in the top five categories for Rwandan exports to the U.S., and total apparel exports to the U.S. from there are under $300,000 annually. In 2016, $18 million, or 69 percent of all Rwandan exports to the U.S., were coffee.
An agreement in principle on NAFTA is reachable in the "next little bit," U.S. Trade Representative Robert Lighthizer said in a March 28 interview on CNBC. According to media reports from Inside U.S. Trade and from Canada, Lighthizer's team has abandoned a U.S. content requirement for rules of origin in autos, and replaced it with a proposal that an 85 percent North American content requirement can be fulfilled in part by giving credit for higher wages. Some reports pegged that wage at $15 an hour, others at somewhere in the $13 to $17 an hour range. Either would be easily met by most U.S. and Canadian auto parts and auto assembly plants.
Steel and aluminum tariffs and the announcement of tariffs on Chinese goods are pushing the world toward a global trade war, World Trade Organization Director-General Roberto Azevedo said March 28 on BBC. But there's still time to avoid a trade war, he said, because, for the most part, countries have merely announced tariffs, not imposed them, and are negotiating. "The fact is, that when you announce certain types of measures, and others deem that those measures are not in compliance with their obligations, and threaten to retaliate, that is a problem. It is a big problem. I don’t think anybody believes this is something minor, even in the U.S. administration," he said. "People are beginning to understand, I hope, how serious this is, and the kind of impact it could have on the global economy," he said, and that's why, he thinks, the U.S. is negotiating with countries around the world to find ways to avoid imposing steel and aluminum tariffs.