Only one of the allies that have so far avoided tariffs on their steel and aluminum exports to the U.S. has agreed to reducing the volume of those exports -- and Commerce Secretary Wilbur Ross says all will have to if they don't want to face tariffs. "If people don't have the tariffs, and they don't have the quota, that would defeat the whole purpose of the [Section] 232s," he said, which is to boost aluminum and steel production domestically. Since the temporary tariff exemptions for the European Union, Canada, Mexico, Brazil, Argentina and Australia end May 1, it remains to be seen if countries in talks with the U.S. will get another extension.
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.
Canadian Ambassador to the U.S. David MacNaughton pointed to one of President Donald Trump's tweets about e-commerce to explain why Canada sees the need for conservative de minimis levels, but said changing it has been under discussion in NAFTA negotiations. "Is there a number between 20 [dollars] and 800 [dollars] that works? Probably," he said. He said he presumes that before the deal is finished, Canada will raise its de minimis level, but said it will probably be to a lot less than $800. He also said he doesn't expect the U.S. de minimis level to necessarily move down to the same amount Canada agrees to.
Canada is publishing regulatory changes expanding the scope of steel and aluminum products that have to be marked with their country of origin, harmonizing the list with U.S. requirements, according to a press release from the prime minister's office. The move comes amid other measures related to steel and aluminum, including more than $30 million in additional funding to the Canada Border Services Agency and Global Affairs Canada to bolster the country's efforts "to prevent transshipment and diversion of unfairly priced foreign steel and aluminum into the North American market," it said. The new funding, which will be set at $6.8 million annually for five years, will pay for more than 40 new officers to investigate trade complaints. This April 26 announcement follows one in March (see 1803270026) also designed to address America's concerns about illegally subsidized steel and aluminum imports, the subject of the Section 232 action.
Leaders of the New Democrat Coalition, who traditionally vote for free trade deals, expressed their frustration that the U.S. trade representative is not telling them what is happening in NAFTA negotiations. At a press conference April 26, Rep. Ron Kind, D-Wis., Rep. Rick Larsen, D-Wash., Rep. Kendrick Meeks, D-N.Y., and Rep. Scott Peters, D-Calif., said they need to know where NAFTA is headed. "We're getting the sense more and more" that the administration intends to bring a rewritten NAFTA as a fait accompli, Kind said. "I would suggest their tactics are wrong and they shouldn't take these votes for granted," Larsen said.
Discussions of auto rules of origin are getting more specific as NAFTA talks continue, according to Canada's Foreign Minister Chrystia Freeland, who spoke to reporters outside the headquarters of the Office of the U.S. Trade Representative on April 25. "We are starting to get into a more detailed conversation, which is absolutely necessary, given the fiendish complexity of rules of origin for cars -- and I think it's a really good thing we're starting to dig into the details," she said. Some say that the U.S. has compromised very little on its higher rules-of-origin demands (see 1804230048), as U.S. Trade Representative Robert Lighthizer is not convinced by auto companies' complaints.
Stakeholders continue to ask for additional and enhanced ACE capabilities, and the agency is working on system enhancements to enable de minimis functionality, CBP Commissioner Kevin McAleenan told the House Homeland Security Committee Subcommittee on Border and Maritime Security in his prepared opening statement. Creating de minimis functionality "will provide CBP access to previously unavailable admissibility data for low value shipments, resulting in improved cargo processing and use of enforcement resources," he said.
The Aluminum Association, the largest trade group for the aluminum industry, asked President Donald Trump to grant permanent exemptions to the European Union, Canada, Mexico, Brazil, Australia and Argentina -- and said those agreements should not be used to create quotas for aluminum exports. The trade group sent a letter on April 24 noting that 97 percent of aluminum industry jobs are in mid- and downstream production, and most rely on at least some imported aluminum. "Quotas would paradoxically cause imports of semi-fabricated products from China to be more competitive in the U.S. market, as manufacturers scramble to find metal," the letter said.
Treasury Secretary Steve Mnuchin will lead a delegation to China in a few days to discuss trade issues, including potential Section 301 tariffs, President Donald Trump said during a press conference April 24. Mnuchin, joined by U.S. Trade Representative Robert Lighthizer, will discuss unfair intellectual property rights issues that led the U.S. to propose the 25 percent tariffs under Section 301. Tariffs will be levied "unless we make a trade deal. I think we've got a very good chance of making a deal," Trump said in a meeting earlier in the day.
President Donald Trump told reporters April 24 that he wishes he could make a trade deal just with France, because trade with the European Union "has been unfair for a long time," but that his Cabinet is negotiating with the EU around the Section 232 tariffs on steel and aluminum. On NAFTA, Trump said, "NAFTA as you know is moving along. We're doing very nicely with NAFTA. We could make a deal very quickly, but I'm not sure that's in the best interest of the United States. We'll see what happens."
The U.S. asked China to end its import restrictions on scrap and asked it to consider less trade-restrictive measures at the World Trade Organization. The European Union began the discussion about China's actions on recycled materials, and received support from five other countries critical of the practice. Countries that send scrap to China have been complaining at the WTO for months (see 1708220009), and although it did not end up banning waste imports, the restrictions it did impose are having "a huge impact on the global recycling chain," South Korean representatives said at the WTO on April 20. These restrictions are separate from the 25 percent tariff China is levying on U.S. aluminum scrap in retaliation for the Section 232 tariffs. The Institute of Scrap Recycling Industries says that the U.S. exported $2.34 billion in aluminum scrap in 2017, and about half of those exports went to China.