Mara Lee

China will decrease tariffs on 706 items on Jan. 1, 2019, including on raw materials for production, such as raw aluminum. It is also cutting tariffs sharply on many more advanced items. For instance, the tariff on laser welding machines will drop from 10 percent to 5 percent; camera tariffs will fall from 9 percent to 4 percent; movie camera and projector tariffs will fall from 8 percent to 3 percent; tariffs on printing machines and copiers will be reduced from 10 percent to 3 percent; tariffs on heavy trucks with cranes will drop from 15 percent to 8 percent; and tariffs on cement trucks and wreckers will slide from 15 percent to 10 percent.

Rusal, which was sanctioned by the U.S. Department of the Treasury in April, will be delisted from sanctions Jan. 18, 2019, Treasury told Congress earlier this month. Although Rusal, a major aluminum producer based in Russia, was sanctioned in April, it received a series of stays of execution over the months as the government negotiated on how the company could avoid being put out of business as a result of the sanctions.

The Office of the U.S. Trade Representative copied most of the NAFTA priorities' language on customs and trade facilitation for its U.S.-Japan negotiating priorities, with one major exception. The USTR raised the idea of matching de minimis value thresholds as part of a trade deal. Specifically, it wrote that an agreement should "provide for simplified customs procedures for low-value goods and a more reciprocal de minimis shipment value."

Christmas lights producers outside China appear to have doubled their volume of exports to the U.S. after the Section 301 tariffs more than doubled the tariffs on Chinese lights, according to the Coalition for GSP. The group decided to look at Christmas lights because nearly all of the imports happen from August through October, so the impact of the tariff jump on Chinese lights from 8 percent to 18 percent on Sept. 24 would show up immediately.

The incoming Senate Finance Committee chairman suggested during a speech that the committee could rein in Trump's use of Section 232 tariffs. Sen. Chuck Grassley, R-Iowa, said he doesn't mind being creative in negotiations, but he will be reviewing the president's use of those tariffs. "I strongly disagree with the notion that imports of steel and aluminum, automobiles, and auto parts somehow could pose a national security threat," Grassley said, according to his prepared remarks. "Senator Portman and others have already introduced legislation to narrow the scope of how an administration can use the power that Congress authorized in 1962 under the influence of the Cold War (see 1808010048). "I believe that these efforts serve as a prudent starting point for the discussion we need to have on Section 232 authority in the next Congress."

A federal government shutdown at 12:01 a.m. Dec. 22 looked likely as President Donald Trump dug in his heels on $5 billion in funding for a border wall. “If the Dems vote no, there will be a shutdown that will last for a very long time,” President Donald Trump tweeted Dec. 21.

Although PricewaterhouseCoopers expects trade will not return to normal with China for more than three years, experts on a Dec. 20 webcast said clients are mitigating increased tariffs through a variety of strategies, including lowering customs value, bonded warehouse use, modifying tariff codes and negotiating with suppliers or customers. "Probably 20 percent can be mitigated without making any changes to the supply chain," said Scott McCandless, a trade policy specialist for the firm.

The Government Accountability Office has agreed to look into the Commerce Department's steel and aluminum tariff exclusion process, though it cannot begin the study for about three months. Sen. Pat Toomey, R-Pa., one of the requesters, announced the GAO decision on Dec. 19. "I hope GAO's review produces recommendations for fixing this flawed process so more Americans are spared from these onerous taxes," Toomey said in a press release. The GAO said in its letter to Toomey that "staff with the required skills will be available to initiate an engagement in about three months." Sen. Tom Carper, D-Del., who joined with Toomey and Sen. Doug Jones, D-Ala., in requesting an investigation said that "as of this fall, the Department of Commerce had received nearly 50,000 exclusion petitions from American manufacturers seeking relief from these misguided tariffs." Carper said the "Commerce Department has not only created a broken and convoluted exclusion process, but the agency has only managed to issue decisions in a third of these 50,000 pending cases."

The outgoing chairman of the House Ways and Means Committee expressed no anxiety that it won't be possible to get enough votes in his chamber to pass the new NAFTA next year. Chairman Kevin Brady, R-Texas, who will pass the gavel to ranking member Richard Neal, D-Mass., next year, said, "This isn't the first time we've been in the minority during trade agreements. The Panama, Colombia, South Korea [are] good examples of that," he said in a gaggle with reporters at the Capitol Dec. 19. "I anticipate the Ways and Means Committee will be working to continue to improve the agreement until there's bipartisan support for it."

All of the Democrats on the House Ways and Means Committee, from the left and center wings of the party, sent a letter to U.S. Trade Representative Robert Lighthizer on Dec. 19, saying Peru has made "a flagrant attack on the heart of the [U.S.-Peru Trade Promotion Agreement (Peru Trade Agreement)'s] Forestry Annex that cannot go unchallenged." They asked the administration to take enforcement measures if Peru does not reverse course by the end of this week.