Experts disagreed on whether the spread of the coronavirus will make it impossible for China to reach its purchase commitments, or make it more likely that China will wish to please the U.S., as its economy suffers. But one thing most agreed on -- the disease's impact is another reminder, after the tariff war, that companies should diversify instead of being wholly reliant on Chinese factories. The experts were on a panel at the Washington International Trade Association conference Feb. 4 on the future of U.S.-China trade.
The Office of the U.S. Trade Representative is requesting comments on whether the third set of tariff exclusions on Chinese imports on Section 301 List 1, set to expire April 18, should last another year, it said in a notice. The agency will start accepting comments on the extensions on Feb. 16. The comments are due by March 16, it said. The USTR has granted extensions to only six exclusions so far (see 1912190060).
Indonesia has given its customs officials the authority to stop counterfeit goods at the border, and just in 2020, has already seized $1 billion rupiah, or $73,000, worth of counterfeits that were set for export, according to Iwan Freddy Hari Susanto, charge d'affaires for the Indonesian Embassy. He was testifying Jan. 31 at a hearing on Indonesia's eligibility for the Generalized System of Preferences benefits program, and was describing numerous actions the country has taken to improve protections for intellectual property rights holders.
In addition to a directive to change the issuance of importer of record numbers and to increase penalties for those who help ineligible importers (see 2001310062), an executive order issued Jan. 31 tells CBP, in consultation with the U.S. trade representative, to develop compliance scores for each country's mail system. Checks of small packages that come through the mail will be used to evaluate the rates of counterfeit goods and contraband arriving from those countries, White House trade adviser Peter Navarro said.
President Donald Trump issued an executive order on Jan. 31 that mandates CBP work toward new criteria for obtaining importer of record numbers, and new consequences for customs brokers that help importers evade those criteria. The order directs the Department of Homeland Security to "issue a notice of proposed rulemaking to establish criteria importers must meet in order to obtain an importer of record number," and says one of those criteria must be that CBP debarment or suspension for reasons related to trade renders an importer ineligible.
Eliminating Thailand's eligibility for the Generalized System of Preferences program, because of a complaint from pork producers, would hurt U.S. importers more than Thai businesses, one witness said, and would be unlikely to convince the country to allow pigs fed with ractopamine to be imported. China and the European Union also ban meat that was fed the growth-enhancing drug. Dan Anthony, testifying on behalf of the GSP Action Committee, told the panel of government officials that they should put great weight on the potential harm to U.S. importers as they make their decision. He gave the example of a 25-person company that imports from Thailand, and had to pay $60,000 to $70,000 a month in tariffs during the two years GSP was not in force. Once it was renewed, the North Carolina company hired 17 full-time employees, and today, employs 70 people.
The Cheese Importers Association of America is asking members to lobby their members of Congress to co-sponsor a bill that would refund tariffs on European Union goods that were on the water on or before the day of the Federal Register notice announcing the tariffs, Oct. 9, but arrived in port Oct. 18 or later. The tariffs took effect on Oct. 18. The trade group says that Rep. Bill Pascrell, D-N.J., and Rep. Jodey Arrington, R-Texas, will introduce the bill. The CIAA also released a description of the bill.
President Donald Trump, in a signing ceremony Jan. 29, said he would be ending the devastation that NAFTA brought and said that its replacement will strengthen what he called the country's blue-collar boom, “delivering massive gains for the loyal citizens of our nation.” Democrats, who were not invited to the White House ceremony, during their own press conferences ahead of the signing, emphasized how much they'd changed what the president submitted to them, by strengthening labor enforcement and environmental provisions, and removing patent protections for certain kinds of prescription drugs.
While the phase one deal is a welcome pause in trade war hostilities between China and the U.S., the president of the Asia Society Policy Institute said a conclusion to phase two -- which presumably would lift Section 301 tariffs -- won't come this year. The think tank's president, Kevin Rudd, who also is a former prime minister of Australia, said at a program Jan. 28, “I think the best way to look at the phase one deal is that it's a ceasefire. I wouldn't go beyond that, to be honest.” He added, “I don't think it's in either side's political interest to see phase two conclude or fail on this side of a presidential election.”
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, as he talked about attending the U.S.-Mexico-Canada Agreement signing ceremony, acknowledged that there are a number of steps before the NAFTA replacement can come into force. He said on a Jan. 28 phone call with reporters that he thinks Canada will ratify “probably within the next 30 days,” but then all parties will have to show how they “will be able to carry out their USMCA obligations so that this can enter into force.” Here at home, uniform regulations for the new rules of origin have to be promulgated before the U.S. can certify it's ready for USMCA. Still, Grassley said, Trump will be running his re-election campaign on replacing NAFTA. “I'm glad he can say that, and I'm willing to say it for him, too,” he said. “He likes to brag, and this is legitimately something to brag about.”