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.
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.
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.
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."
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."
The World Trade Organization agreed to form a panel on whether Russian retaliation for U.S. steel and aluminum tariffs is illegal, at the Dec. 18 meeting of the Dispute Settlement Body. A Russian official said its delegation was bewildered to hear the U.S. say that Russia is undermining WTO rules "when it is the U.S. arbitrarily imposing additional duties on steel and aluminium and using them as a squeezer in order to allow the US, with different degrees of success, to get trade concessions from certain members," a summary of the meeting said. According to a Geneva trade official, there now have been five panels formed on retaliatory tariffs responding to the Section 232 tariffs. At the same meeting, the U.S. blocked a first request by China to form a panel to judge whether U.S. tariffs on Chinese goods under Section 301 are legal. Its delegation said that the two parties are in negotiations, and that's the right place to settle the conflict, not the WTO. The panel will automatically be authorized at next month's Dispute Settlement Body meeting. China said U.S. tariffs are damaging the global economy and damaging global industrial supply chains.
On the second day of a World Trade Organization review of U.S. trade policy, U.S. Ambassador Dennis Shea said it's wrong to blame America for the crisis of the multilateral trading system, as he responded to European and Chinese comments from the first day of the hearing (see 1812170007). Shea said China is arguing that it will subsidize, dump products, force technology transfer and steal business information, and claim it is all OK because American consumers pay less for Chinese imports. Any U.S. response is then decried as an abuse of power and irrational, Shea said, according to a summary of the hearing provided by a Geneva trade official. "This is not acceptable," Shea said.
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.
Trade officials from the Australian, Japanese and New Zealand embassies told a Washington trade audience that tariffs on Chinese goods are hurting their economies too. Phil Houlding, a trade counselor for the New Zealand embassy, said he doesn't like to hear leaders from either China or the U.S. "celebrating the other facing economic hardship." He noted the market turmoil of late, and said, "You've got to be a little careful what you wish for. These things rebound through a globalized world."