Theft of intellectual property -- whether through computer intrusions, insider recruitment or forced tech transfer -- is the reason the administration levied tariffs on nearly $250 billion in Chinese goods. The trade war, and its possible resolution, hung over the Dec. 12 Senate Judiciary Committee hearing on Chinese industrial espionage.
Ten percent tariffs on imported aluminum has driven about 1,000 new jobs, and has not cost jobs among aluminum consumers, according to an Economic Policy Institute report released Dec. 11. One of the aluminum companies that sought Section 232 protection, Century Aluminum, funded the report, and participated in its rollout, through the American Primary Aluminum Association trade group. The report also noted that 22 projects, some expansions, some new, have been announced in rolled and extruded aluminum facilities. These facilities are downstream aluminum, and are not protected by Section 232, though some are protected by antidumping duties. These projects are expected employ more than 2,000 workers when they are open.
China offered to drop its retaliatory tariffs on U.S. vehicles and grant its new, lower 15 percent most favored nation rate for the category, according to a report in The Wall Street Journal Dec. 11. The offer came in a phone call on Dec. 10, the report said. China's Commerce Ministry confirmed the call took place to Reuters and issued a short statement that said: "Both sides exchanged views on putting into effect the consensus reached by the two countries’ leaders at their meeting, and pushing forward the timetable and roadmap for the next stage of economic and trade consultations work." President Donald Trump tweeted shortly after 8 a.m. on Dec. 11, "Very productive conversations going on with China! Watch for some important announcements!" U.S. Trade Representative Robert Lighthizer was on the call, reports said. His office did not respond to a request for confirmation by press time.
The two excluded sectors from planned Europe trade talks -- agriculture and autos -- both want to be included, according to comments filed with the Office of the U.S. Trade Representative ahead of the Dec. 14 public hearing on negotiation priorities. More than 150 organizations and individuals shared their views in the USTR docket ahead of the Dec. 10 deadline for comments.
The U.S. Chamber of Commerce will support the new NAFTA, and will lobby for its passage, the group announced Dec. 10. CEO Thomas J. Donohue wrote that the group will be working to resolve a handful of outstanding issues, but only specifically mentioned the Section 232 tariffs on Mexican and Canadian steel and aluminum. He spent far more time scolding President Donald Trump for his intention to terminate NAFTA "in order to present the incoming Congress with a choice between the new agreement and no agreement. We disagree with this strategy." Donohue wrote, "Issuing this threat against a co-equal branch of government is neither necessary nor productive and could actually cost votes." A prominent free-trade Democrat in the House of Representatives made the same point on Dec. 10 (see 1812100024).
Agriculture interests, including meat, wheat and grape growers, told the Office of the U.S. Trade Representative that they will lose market share to competitors in Australia, Europe, Canada, Mexico and Chile as those countries begin to benefit from the Trans-Pacific Partnership and EU-Japan free trade agreement. As they testified Dec. 10 on negotiating a U.S.-Japan agreement, they said speed is of the essence.
Express Association of America, which represents DHL, FedEx and UPS, said Japan has not lived up to its postal privatization commitments, and asked the Office of the U.S. Trade Representative to make sure that Japan Post is no longer advantaged compared to private shippers. Michael Mullen, executive director of EAA, testified on Dec. 10 in front of a trade panel that's seeking public views on how to shape negotiations for a U.S.-Japan free trade agreement.
Withdrawing from NAFTA to secure approval of its replacement will backfire, warned the chairman of the New Democrats, a group of 68 House of Representatives members generally seen as pro-free trade, in a statement issued Dec. 10. One of the New Democrats who serves on the House Ways and Means Trade Subcommittee, Rep. Ron Kind, D-Wis., is interested in leading that subcommittee next year (see 1811140049). New Dems Chairman Rep. Jim Himes, D-Conn., said withdrawal "will create economic chaos and not build the trust necessary for bipartisan progress." Himes said he met with U.S. Trade Representative Robert Lighthizer on Dec. 7, and had a constructive conversation in which Himes said Lighthizer expressed his desire to work closely with members of Congress. "I agreed that such engagement would be essential to consideration of the revised NAFTA," Himes said. In his statement, he noted that his caucus was integral to getting fast-track legislation passed, as well as "every trade agreement in recent decades.... This administration will need bipartisan support to successfully push trade agreements through Congress and we urge the Administration to engage with us on this and other agreements moving forward."
Automakers, titanium producers and drug industry players shared diverging views inside their respective sectors of how Office of the U.S. Trade Representative negotiators should approach a U.S.-Japan free trade agreement. The department invited the public to share opinions Dec. 10 on what priorities negotiators should pursue, and how the new deal should be similar or diverge from the path forged for the U.S.-Mexico-Canada Agreement and the Trans-Pacific Partnership. Autos are the single biggest import from Japan, making up $51 billion of the $136 billion in goods imports in 2017, according to USTR.
Importers paid more than $6 billion total in tariffs in October, the first full month that there were additional tariffs on $200 billion in Chinese goods, according to an analysis from Tariffs Hurt the Heartland. The group said that amount -- which is $3.1 billion more than was paid in October 2017 -- has not slowed imports on the tariffed goods, but has drastically cut exports that are subject to retaliatory tariffs. The group is funded in part by farm interests, who have been particularly hard-hit by retaliation. Their Dec. 7 release said that imports subject to new tariffs declined 0.6 percent in October, while exports targeted for retaliation fell 37 percent. About two-thirds of the increase is for Section 301 tariffs, while steel and aluminum tariffs cost an additional $446 million. The goods on the Section 301 list would have cost $394 million in tariffs before the action; in October, tariffs on those imports were $2.6 billion. CBP recently said it has assessed more than $10 billion under the recent Trump administration Section 201, 232 and 301 trade remedies (see 1811260010).