Mara Lee

The Consumer Technology Association asked the Section 301 hearing panel to remove 380 items from the $200 billion list, arguing that there will be a drop in consumer demand as prices rise. Because many of the items are inputs, there will not be a direct 25 percent cost increase, but CTA commissioned a study that said there could be price increases of up to 6 percent, even on U.S. products, because of tariffs on circuit boards.

Manufacturers in foreign-trade zones are being treated worse than other U.S. manufacturers when their products are on Section 301 lists, said National Association of Foreign-Trade Zones President Erik Autor. He said he's attempting to educate the U.S. trade representative on how zones work in an effort to resolve the problem. Autor said that these products are "being erroneously treated as imports from China" if the highest-valued component is from China. He said this mistake is happening because Census is trying, however imperfectly, to measure the amount of imports by country. Because the imports did not go through customs when they entered the U.S., the Census bureau asks about the finished products leaving FTZs, and assigns a country of origin to it by determining what country was responsible for the greatest proportion of its imported components.

David Mathison, founder of furniture leather company Leather Miracles, asked a panel of government officials to strike Harmonized Tariff Schedule headings 4107.11.50, leather upholstery, and 9401.90.50, leather for auto seats, from the Section 301 tariff list. He spoke as one of 62 witnesses testifying on the first of six days of scheduled hearings to determine which products will face additional tariffs. Mathison's career has been disrupted by China before. The rise of Chinese shoe manufacturing, and then Chinese furniture manufacturing, drove his previous company, Lackawanna Leather, out of business after about 100 years of operation.

A group of 80 trade associations has asked for exclusions to Section 301 Chinese tariffs to be liberally granted, including that they be granted automatically to all importers who have a "binding 'signed purchase order' to procure products from a supplier in China" if that order was signed before July 6.

Mexico's Economy Minister Ildefonso Guajardo said he's hopeful the U.S. and Mexico "will be able to close up no later than the middle of the week the remaining issues" on their NAFTA renegotiations and that trilateral discussions would then start. As to what those remaining issues are, Guajardo spoke elliptically, as he left the Office of the U.S. Trade Representative on Aug. 17, about government actions that are connected with "financial items" -- but he did clarify this does not concern trade in the financial sector.

A "second-level" delegation from China is coming to the U.S. next week for talks, White House economic adviser Larry Kudlow said on Fox News Aug. 16, but what he said next suggested they would not be doing substantive negotiations to roll back the trade war. "Maybe they'll re-open those talks," he said. Kudlow quickly pivoted to talking about other trade negotiations. "We're making great headway in Europe, making headway in Mexico," he said, and added that he thinks what comes out of those talks is "going to be reassuring."

Mexico's Economy Minister Ildefonso Guajardo declined to say what Mexico's view is on the tariff rate for autos that do not qualify for a stricter rules of origin under NAFTA. Outside sources familiar with the talks say that the U.S. is asking that the tariff rate be higher than 2.5 percent for non-conforming autos (see 1808130019). "I will not discuss details, because as you know, this is a work in progress, and we have to make sure we have the final outcome -- we are still making an effort with that," Guajardo said in response to a question about the tariff treatment of non-conforming autos from International Trade Today.

The U.S. blocked the formation of a panel that would determine whether the European Union has complied in the Airbus subsidies case that began 14 years ago. The World Trade Organization's Dispute Settlement Body will consider the request (see 1808070016) again on Aug. 27, and the U.S. cannot block the second request.

Turkey will hike tariffs on American cars, tobacco, liquor and more in response to President Donald Trump's decision to double tariffs on Turkish steel and aluminum. Although Trump named both metals, only the 50 percent tariff on Turkish steel has gone into effect (see 1808120001). Turkey published a list of 22 tariff lines that will be subject to higher tariffs, from 4 percent on oil derived from coal to 140 percent on liquors. Cars will face a 120 percent duty; steel structures, tobacco, cosmetics and acetate cellulose film will face a 60 percent duty. The notice was dated Aug. 14, and according to an informal translation, if import declarations are made within 45 days of the publication, the previous duty will apply.

President Donald Trump said in an Aug. 15 tweet that tariffs are leading to great new trade deals. "Our Country was built on Tariffs," he said. "Other Countries should not be allowed to come in and [steal] the wealth of our great U.S.A. No longer!" So far, no new trade deal has been finalized during the Trump administration, though South Korea agreed to steel quotas and a longer period of high tariffs on imported trucks as part of a revised U.S.-Korea Free Trade Agreement (KORUS). KORUS has not been signed, however. Canada, Mexico and the U.S. have been discussing a new NAFTA for a year; Canada is insistent that the U.S. will not use the leverage of Section 232 steel and aluminum tariffs in NAFTA negotiations (see 1804260010).