The day after U.S. Trade Representative Robert Lighthizer told Rep. Jackie Walorski at a hearing that he still believes there's no need for exclusions from 10 percent tariffs on Chinese imports, she and Rep. Ron Kind have introduced a bill that would force him to put the process in place. Their bill -- which has a Senate companion written by Sen. James Lankford, R-Okla., and Sen. Chris Coons, D-Del. -- is called the Import Tax Relief Act.
Although the main topic of the hearing was China, U.S. Trade Representative Robert Lighthizer told House Ways and Means Committee members repeatedly Feb. 27 that if they don't ratify the U.S.-Mexico-Canada Agreement, there will be no trade agenda for the next several years. "If we don’t pass USMCA, it says we don’t have a consensus," he said. Lighthizer also said: "It’s clearly better than its predecessor, it’s no question. Millions and millions of people are affected [by NAFTA]. You just have to pass it."
U.S. Trade Representative Robert Lighthizer, who is leading the China trade talks, downplayed the possibility that President Donald Trump and Chinese President Xi Jinping will sign a trade agreement a month from now. Lighthizer, who testified before the House Ways and Means Committee Feb. 27, was asked by Chairman Richard Neal, D-Mass., if he sees a package coming in the next few weeks. "I’m not foolish enough to think there’s going to be one negotiation that’s going to change all the practices in China," Lighthizer replied. "At the end of this negotiation, if we’re successful, there'll be a signing." But that's the beginning of a long process to monitor China's compliance with what it promises to do.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, thinks passing the new NAFTA is urgent, but he acknowledged that not much will happen on Capitol Hill until the White House offers its implementing legislation. "The timeline begins when the president sends the [U.S.-Mexico-Canada Agreement] up to Congress, so we don't worry about it until then," he said. Grassley said that while the administration is deciding how to lift the metals tariffs on Canada and Mexico, he is planning to talk to Democrats about what they need to have changed in the agreement to vote yes. "I would like to have very specifically set out what it takes in the area of environment, labor and enforcement to satisfy the Democrats," Grassley said in a phone call with reporters Feb. 26. He said again that whatever they're asking for has to be accomplished without reopening negotiations (see 1902130049).
The U.S. Chamber of Commerce-organized USMCA Coalition launched Feb. 26, with many of the major trade players -- UPS, the Detroit automakers, the farm bureau, the American Apparel and Footwear Association -- and some notable absentees -- foreign automakers, aerospace firms.
Democrats in Congress are wondering if the president's rush to get a deal with China will result in a deal that leaves China's mercantilist policies in place, while a member of the Senate Republican leadership expressed confidence that the deal that's expected just a month from now will be comprehensive.
Trade experts are doubtful that a high-quality trade deal China is coming in a month, but the quality -- and what will happen with the tariffs on Chinese goods -- is still blurry. "The president, for all his self-proclaimed negotiating prowess, really seems to have negotiated himself into a corner on this," said Phil Levy, senior fellow on the global economy at the Chicago Council on Global Affairs. "He escalated way too fast with the tariffs. He honestly believed if he threw around really big numbers the Chinese would cave. They did not. He got stuck with some threats that he didn’t really want to carry out."
Kentucky Gov. Matt Bevin says there shouldn't be steel and aluminum tariffs on Canadian products, but expressed confidence that the Trump administration will make the situation right eventually. Bevin is a Republican who leads a state that is third-highest in auto industry jobs as a proportion of the workforce. "I wish people would just have patience," he said at a Feb. 21 event sponsored by the Canadian American Business Council. He suggested the reason the tariffs are still in place is "there's a limited amount of bandwidth" at the Office of the U.S. Trade Representative, and they have "a limited amount of ability to fight all these fires at once."
Jerry Dias, national president of Canada's UNIFOR syndicate, said that before NAFTA, Canada had a small trade surplus in goods with the world, but now it has a $120 billion deficit. He said that General Motors, while closing plants in Canada, doubled its capacity in Mexico. Mexican consumers buy 240,000 GM vehicles a year, and Mexico is on the cusp of producing 1 million vehicles, he said. "And guess where those jobs come from? Canada and the United States." Dias said Canada has lost 500,000 manufacturing jobs in the nearly 25 years that NAFTA has been in place. "Tell me why I should celebrate?"
Canada's Ambassador to the U.S. David MacNaughton said he thinks U.S. and Canadian negotiators will resolve Section 232 tariffs on steel and aluminum "in a short while," and then reiterated the prediction, saying it will be resolved soon. MacNaughton, who was speaking Feb. 21 at an event sponsored by the Canadian American Business Council, said getting the tariffs lifted "is No. 1, 2 and 3 on my agenda here."