The Office of the U.S. Trade Representative posted a notice on its website that extends the June 1 deadline to June 15 for goods in transit that will be subject to a Section 301 tariff increase (see 1905310070). Chinese imports subject to the third tranche of Section 301 tariffs that were on the water as of May 10 will stay at the 10 percent tariff rate through June 15. The previously announced HTS subheading, 9903.88.09, will continue to apply to those goods, USTR said.
Discussions on how to address non-market-oriented policies such as forced technology transfers, industrial subsidies and state-owned enterprises advanced among Europe, Japan and the U.S., according to a joint statement from Paris on May 23 from the European commissioner for trade, Japan's economy minister and the U.S. trade representative. The also talked about digital trade and e-commerce -- something many countries, including China, are discussing at the World Trade Organization -- and WTO reform.
The Office of the U.S. Trade Representative plans to open the product exclusion process for the third tranche of Section 301 goods "on or around June 30," the agency said in a notice. The notice is a request to the Office of Management and Budget asking for expedited approval for an information collection for the exclusion process that was announced as part of the tariff increase for the third tranche of goods from China (see 1905080035). "USTR is establishing a process by which U.S. stakeholders can request the exclusion of particular products classified within a covered tariff subheading from the additional duties that went into effect on September 21, 2018, and May 10, 2019," the agency said. "USTR anticipates that the window for submitting exclusion requests will open on or around June 30, 2019. Requests for exclusion will have to identify a particular product and provide supporting data and the rationale for the requested exclusion. Within 14 days after USTR posts a request for exclusion, interested persons can provide a response with the reasons they support or oppose the request. Interested persons can reply to the response within 7 days after it is posted."
Canadian Foreign Minister Chrystia Freeland, speaking May 15 at the U.S. Capitol after meeting with the head of the Senate Finance Committee and the House Trade Subcommittee chairman, declined to predict when the U.S. and Canada might reach a resolution on Section 232 tariffs and Canada's retaliatory tariffs because of them. Treasury Secretary Steven Mnuchin testified earlier in the day in the Senate, and said there that "I think we’re close to an understanding with Mexico and Canada" on the tariffs.
While Airbus planes and components are at the top of the retaliatory tariff list the Office of the U.S. Trade Representative is recommending, many other products are included to reach $11 billion in compensation. It's quite possible that the World Trade Organization will say that the USTR estimate of $11 billion in annual damage to the U.S. civil aircraft industry due to Airbus subsidies is too high, and will authorize a lower tariff total.
The Office of the U.S. Trade Representative posted a schedule of witnesses for the May 15 and 16 hearings on the proposed new tariffs on goods from the EU. The proposal follows a recent World Trade Organization decision that found EU countries improperly subsidized aircraft production (see 1904090031). "The amount of countermeasures the United States is authorized to impose is currently subject to arbitration at the WTO, the result of which is expected to be issued this summer," the USTR said in a May 14 news release.
The White House said that U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had productive meetings with Chinese Vice Premier Liu He. "The discussions remain focused toward making substantial progress on important structural issues and rebalancing the US-China trade relationship," White House Press Secretary Sarah Sanders said.
Dozens of agriculture trade groups and companies wrote to U.S. Trade Representative Robert Lighthizer to tell him that "the U.S. food and agriculture industry is increasingly disadvantaged by competing regional and bilateral agreements with Japan that have already been implemented, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Japan Economic Partnership Agreement (EU-Japan EPA)."
After two days of talks with Japan, the Office of the U.S. Trade Representative said the "very large trade deficit" was a topic of discussion. The two sides talked about trade in goods, "including agriculture, as well as the need to establish high standards in the area of digital trade. In addition, the United States raised its very large trade deficit with Japan -- $67.6 billion in goods in 2018," the office said. Reuters reported that U.S. Trade Representative Robert Lighthizer and Japan's Economy Minister Toshimitsu Motegi will meet again in Washington next week.
A report in the Japanese press says that Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi will meet with U.S. Trade Representative Robert Lighthizer April 15-16 in Washington, but that auto export quotas, something Lighthizer pushed for in the 1980s, are unacceptable. The free-trade agreement talks, first announced in September 2018 (see 1809260049), could address non-tariff barriers. Nikkei Asian Review reporters say that Japan "is willing to discuss the streamlining of customs procedures should Washington demand them. But it does not plan to negotiate issues that will take years to realize because of the legislative revisions required, including the drug-pricing system, financial regulations and food safety standards." American drug makers are frustrated by new price constraints in Japan, and want that addressed (see 1904030043).