Deputy-level talks resumed Feb. 19 in Washington, and President Donald Trump, speaking to reporters at the White House that afternoon, again suggested that he won't raise tariffs on Chinese imports on March 2 if a deal isn't reached yet. "I can’t tell you exactly about timing, the date is not a magical date because a lot of things are happening," he said.
The Commerce Department has sent its recommendations to the president on how much imported auto parts and autos should be taxed, and auto industry players and pro-free-trade groups are angry that no one outside the administration knows what they are. On Feb. 18, American International Automobile Dealers Association President and CEO Cody Lusk said, "Late last night, after nine months of waiting, the Department of Commerce finally submitted to the White House its findings on whether imported autos and auto parts constitute a national security threat to the United States. Unfortunately, the report has not been made public, highlighting, once again, the bogus nature of this investigation ... ."
It bears watching how U.S. Trade Representative Robert Lighthizer interprets his “instruction” to initiate an exclusion process as required under the Feb. 15 spending bill (see 1902150047), customs lawyer Ted Murphy of Baker McKenzie blogged. That includes whether Lighthizer will apply it retroactively to Sept. 24. Though “the expectation that USTR will create an exclusion process within 30 days is clear,” less so is “exactly what it will cover and how it will be implemented,” he said.
Talks in Beijing this week between U.S. and Chinese trade negotiators were "detailed and intensive" and "led to progress between the two parties," the White House said in a Feb. 15 statement. The Trump administration announced that Chinese officials would travel to Washington next week to continue negotiations. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin also met with President Xi Jinping, the statement noted. "During the talks, the United States delegation focused on structural issues, including forced technology transfer, intellectual property rights, cyber theft, agriculture, services, non-tariff barriers, and currency.
The U.S. Section 232 tariffs on steel and aluminum should be lifted as soon as possible, Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said on Feb. 15. "Mexico is not a national security threat to the United States," De la Mora said while speaking at a think tank. Mexico can cooperate with the U.S. in monitoring customs, avoiding transshipment and policing tariff evasion, "all the things that are concerns to the industry and are legitimate concerns," she said.
The mini-Omnibus bill that was signed by President Donald Trump Feb. 15 requires the creation of an exclusion process for the third tranche of Section 301 tariffs by March 17. The third tranche faces a lower tariff than the first two rounds -- 10 percent -- and because of that, the Office of the U.S. Trade Representative has not allowed importers of those items to apply for exclusions. The USTR has to report to the congressional appropriations committees, the House Ways and Means Committee and the Senate Finance Committee, by that date on the status of that process. Before that date, USTR will need to consult with those committees "regarding the nature and timing of the exclusion process," Congress wrote. The same bill also dedicated new funding toward processing Section 232 exclusion requests (see 1902140027).
Seven Democratic senators, led by New Jersey Sen. Robert Menendez, sent a letter Feb. 13 to President Donald Trump telling him that only an agreement that stops China's forced tech transfer, stops discriminatory licensing, stops cybertheft and stops China from facilitating the buying of U.S. high-tech firms would be acceptable. Also signing the letter were Sens. Sheldon Whitehouse of Rhode Island, Mark Warner of Virginia, Maggie Hassan of New Hampshire, Ben Cardin of Maryland, Michael Bennet of Colorado and Catherine Cortez Masto of Nevada. They wrote: "The only way to hold the Chinese government to its word is to lay out clear metrics by which we can judge compliance."
Sen. Jon Tester, a moderate Democrat who represents Montana and the owner of an 1,800-acre farm, told International Trade Today that he's interested in evaluating both recently introduced bills that would limit Section 232 authority. "The whole trade war stuff is killing us in Montana, just killing us," he said to International Trade Today. "Ag prices are in the tank, and it doesn't matter if you're talking pulse crops, grain, cattle, they're all in the tank." He added, "I'm still in the business. I was sitting last night figuring out what I'm gonna plant ... there isn't anything worth any money." He predicted that farm foreclosures will continue to rise "if we don't get this squared away."
The mini-Omnibus bill to fund a quarter of the government -- including the Commerce Department -- dedicated $3 million more for the Bureau of Industry and Security than was spent in the last fiscal year, for a total of $118,050,000. The White House had asked for $120 million, with a little over $4 million of that for Section 232 exclusions, to hire 13 staffers and subcontractors to handle the flood of requests. The conferees said that they agreed to language "to ensure that the additional resources above enacted for BIS are devoted to an effective Section 232 exclusion process."
A bipartisan quartet of House members is working to put together a letter to U.S. Trade Representative Robert Lighthizer emphasizing that any trade deal with the European Union must include agriculture. The letter is led by Rep. Ron Kind, D-Wis., and Rep. Jackie Walorski, R-Ind. Lighthizer already emphasized ag in his negotiating principles (see 1901140020), but the European Union is not willing to talk about ag, it said in its principles (see 1901180022). Lead EU trade negotiator Cecilia Malmstrom has said that's because the two sides are looking for quick wins, and ag is a thorny issue. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has said that an EU trade deal cannot pass unless it includes agriculture.