American tariffs on aluminum and steel are safeguard measures masquerading as a national security action, and therefore, the Chinese Ministry of Commerce is within its rights to prepare safeguard tariffs in response, the ministry said in a March 23 notice. The country also released a list of products that will be subject to the new tariffs. That list, which is in Chinese, is reportedly divided into two phases. The first phases would include 15% tariffs on products like nuts, wine and seamless steel pipes, while the second phase would add a 25% tariff on pork and aluminum, according to The Wall Street Journal. The notice didn't say when the tariffs would take effect.
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.
The Office of the U.S. Trade Representative will soon release a list of the 1,300 tariff lines from China recommended because of China's forced technology transfer, forced joint ventures, intellectual property theft and technology licensing restrictions (see 1803220030). Within that list, the agency will propose 25 percent tariffs on aerospace, information and communication technology, and certain machinery, the White House said in a fact sheet. The total value of goods subject to levies will be $50 billion, the amount the administration says is the annual cost to American businesses because of China's unfair restrictions.
Omnibus government spending legislation that includes provisions to renew the Generalized System of Preferences was passed in the House, the House Committee on Appropriations said in a March 22 news release. The GSP tariff reductions will apply to articles entered on and after the 30th day after the omnibus is enacted. The Senate is expected to pass the bill March 23 or 24. However, the Miscellaneous Tariff Bill, which House Ways and Means Committee Chairman Kevin Brady, R-Texas, had said should go on the omnibus, was not included. The MTB expired in 2012, and covers intermediate inputs for manufacturers that are not available domestically. Many in Washington have low expectations for legislative action in the Senate until after the November elections.
An array of steel executives and the United Steelworkers' president joined House members whose districts include steel mills in celebrating the Section 232 tariffs that are slated to take effect on March 23. "National security is only as strong as American steel, and the American steel industry is strongest when we have the ability to manufacture steel from start to finish inside our own borders," said Todd Young, US Steel's chief lobbyist. Only one aluminum representative was at the Congressional Steel Caucus hearing March 21. Bauxite, the raw material for aluminum, has no domestic source.
The U.S. Trade Representative Robert Lighthizer is talking with South Korea, Australia, Argentina and the European Union about exemptions from Section 232 tariffs on aluminum and steel, and is going to begin talking to Brazil soon. He expects all those negotiations to come to a conclusion by the end of April, he told the House Ways and Means Committee. Lighthizer, who testified for more than three hours March 21, said it's ultimately up to the president but he believes it makes sense for tariffs not to apply to countries while they are in negotiations. He acknowledged that Brazil imports U.S. coal to make steel slabs, and then U.S. mills use those slabs and finish the steel. He said the agency will take that into consideration, but added, "That isn't to say, they will be successful in getting an exclusion." He also said Korea is a particular problem in the steel sector.
House of Representatives appropriators want to know whether the Commerce Department will be able to make prompt determinations on steel and aluminum tariff product exemptions if the agency receives 4,500 applications, as it projected. The Appropriations subcommittee that handles Commerce's budget heard from Secretary Wilbur Ross on March 20. Ross said that the fiscal year 2019 budget request does ask for more staffing. "We believe we can handle the influx," he said.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, speaking at a conference hosted by free-trade interest groups, said Congress will assert itself when it's time to renew fast-track trade negotiating authority in July -- and that no changes to NAFTA can take effect unless Congress signs off. "Because the Constitution very clearly assigns to Congress the power to lay and collect tariffs and to regulate foreign commerce, Congress must have the final word on the fate of NAFTA," he said March 20, according to prepared remarks. "Congress will use the extension disapproval process under the Trade Promotion Authority law to emphasize that the administration must adhere to the TPA negotiating objectives and to encourage the president to seek new agreements with our trading partners."
Business interests are continuing to sound the alarm that widespread tariffs against China as punishment for intellectual property theft and forced technology transfer are a bad idea (see 1803160009). "The Administration should not respond to unfair Chinese practices and policies by imposing tariffs or other measure that will harm U.S. companies, workers, farmers, ranchers, consumers, and investors," said a letter sent March 18 by 45 business groups to President Donald Trump. The signatories -- which included five regional customs brokers' trade groups and the National Customs Brokers and Forwarders Association of America -- were led by tech industry trade groups.
A few more Congress members are joining Utah Republican Sen. Mike Lee's efforts to limit the president's discretion to impose tariffs and quotas (see 1702100043), with a companion House bill introduced on March 15. The same day, a letter was issued to Congress members, asking them to sign on to the House or Senate bill, arguing, "U.S. economic growth is now threatened by new tariffs on steel and aluminum used by U.S. manufacturers, along with repeated threats to terminate reciprocal zero-tariff trade agreements that benefit the United States."
Tariffs are a tax on consumers, and not the right way to address China's industrial policies and unfair trade practices, the U.S. Chamber of Commerce says. U.S. Chamber CEO Thomas Donohue said March 15 that sweeping tariffs against China "could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation. The livelihood of America’s consumers, businesses, farmers, and ranchers are at risk if the administration proceeds with this plan." Administration officials say the Section 301 technology transfer and intellectual property investigation response will be released in the coming weeks.