President Donald Trump said Jan. 25 that he and Congress have reached a deal to end the partial federal government shutdown and reopen the government for three weeks. He promised to sign a bill temporarily funding the parts of the government that have not been funded this fiscal year. The bill would take funding through Feb. 15.
Leaders of auto, aluminum and farm interest groups are all pushing for the Section 232 steel and aluminum tariffs to be lifted on Canada and Mexico, as the administration said would happen once NAFTA was renegotiated. But none of the groups will make their support for the U.S.-Mexico-Canada Agreement contingent on the tariffs being lifted.
House Ways and Means Chairman Rep. Richard Neal, D-Mass., told Worcester, Massachusetts, journalists, that there once were more union manufacturing jobs in Worcester, that provided stability and a good standard of living. Now, the rapid advancement of technology and globalization are challenges, he said. But, he added, "I don't think you can tell the young people here in the city of Worcester ... that globalization is going to retreat. So I think protectionism in terms of trade is a mistake, and I think the idea we can't compete in the international trade arena is a mistake."
The U.S. Reciprocal Trade Act, a bill that would give the president the ability to raise tariffs above the bound rate to match trading partners' levels, was introduced by Rep. Sean Duffy, R-Wis., on Jan. 24. The bill has 18 co-sponsors, all Republicans.
President Donald Trump told reporters in Washington Jan. 23 that "I like where we are right now" in terms of leverage with China in the trade war. "We're doing very well in our negotiation with China." The next day, Commerce Secretary Wilbur Ross said on CNBC that while about 30 Chinese negotiators will come to Washington Jan. 29-30, "we’re miles and miles from getting a resolution, and frankly that shouldn’t be too surprising. Trade is very complicated, there’s lots and lots of issues -- not just how many soybeans and how much LNG." He went on to say that "structural reforms that we really think are needed in the Chinese economy" must be addressed. "And then even more important than that, enforcement mechanisms and penalties for failure to adhere to whatever we agree to."
It remains unclear whether House Speaker Nancy Pelosi will take up the successor agreement to NAFTA in 2019, and whether the president might try to force her hand by submitting a withdrawal notice, according to a Mayer Brown partner who served as chief of staff at the Office of the U.S. Trade Representative before joining the firm. "We're intentionally leaving it with a lack of clarity," Tim Keeler said, "Because that is frankly what the situation is in Washington right now."
Nearly 50 business groups -- mostly not representing metals importers -- sent a letter to U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross suggesting that the tariffs on aluminum and steel in the NAFTA region must be lifted in order for the groups to lobby Congress to approve the new NAFTA, known as the U.S.-Mexico-Canada Agreement. "For many farmers, ranchers and manufacturers, the damage from the reciprocal trade actions in the steel dispute far outweighs any benefit that may accrue to them from the USMCA," the Jan. 23 letter said. The groups -- including the U.S. Chamber of Commerce, the United States Council for International Business, the National Foreign Trade Council and more than a dozen agriculture advocacy organizations -- said the tariffs are hurting steel- and aluminum-consuming companies. They said they want the matter resolved so "we can turn our attention to working with you to gain prompt Congressional approval of the USMCA."
After the March 1 deadline, President Donald Trump could declare victory in the trade war, or his administration could decide the Chinese have not offered substantial changes in response to America's complaints about industrial policies and discrimination against U.S. firms. "It probably depends on what he's seen on Fox News this morning," Center for Strategic and International Studies' William Reinsch said at a CSIS program on Asia in 2019 on Jan. 23. Still, he said, Trump has a pattern of "lots of bluster, lots of threats, occasional use of a threat, and then at the end of the day, he tends to settle for much less than he asked for."
Reps. Tim Ryan, D-Ohio, and Mike Conaway, R-Texas, reintroduced The Fair Trade with China Enforcement Act, a companion bill to Senate Bill 2, which was reintroduced at the beginning of the month by Sens. Marco Rubio, R-Fla., and Mark Warner, D-Va. Ryan's announcement Jan. 22 said: "This bipartisan legislation works to safeguard American assets from Chinese influence and possession, as well as protect American businesses from China’s tools of economic aggression."
A reportedly rescinded invitation to Chinese Vice Premier Liu He to come to Washington Jan. 30 could mean "the U.S. and China have not been able to agree on the hard issues, the structural issues," said David Shear, a senior adviser at McLarty Associates. Shear, a former ambassador to Vietnam, also served at the U.S. Embassy in Beijing and was a senior official on the China desk at State in his foreign service career. Shear, who was reacting to a Financial Times report Jan. 22 saying the Chinese delegation was uninvited, said, "Last week appears to be [Treasury Secretary Steven] Mnuchin's week. This week is [U.S. Trade Representative Robert] Lighthizer's week." National Economic Council Director Larry Kudlow told CNBC that the report is not true.