A routine biennial review of U.S. trade policy included sharp criticisms from longtime allies, as 19 countries took the floor at the World Trade Organization, with another 35 expected to do so before the two-day review was finished. The U.S. ambassador to the WTO, Dennis Shea, said the organization is not well equipped to handle the fundamental challenge posed by China, which continues to embrace a state-led, mercantilist approach to the economy and trade. Anticipating criticisms over America's refusal to allow any appointments to the appellate body, he said: "In our assessment, members are in the early stages of grappling with our collective failure to confront problems that have been growing for years."
World Trade Organization Deputy Director-General Alan Wolff hailed countries' willingness to say reform is needed at the WTO as "a sea change," but said he's not sure when things will be resolved to the satisfaction of the U.S. "The U.S. has not said what it takes to resolve the appellate body impasse," he said. The U.S. refuses to allow any appointments to the appellate panels in the dispute settlement system, and if that continues, the possibility of appeal will end in December 2019, maybe sooner, if a panelist has a conflict of interest on a particular case. "It will be solved," he said. "Will we go over a cliff first?"
After 10 years of argument at the World Trade Organization, the U.S. dolphin-safe tuna labeling requirements are deemed to be justified for legitimate conservation goals, and not discriminatory toward Mexican fishing fleets. The appellate body report, issued Dec. 14, puts to rest Mexico's arguments that the measures were unnecessary and were discriminatory. At issue is the fact that in the part of the Pacific Ocean where Mexico catches tuna, boats commonly drag a dolphin in a net, because that attracts schools of tuna. Environmentalists say that puts stress on the dolphins. In order to qualify for dolphin-safe labeling, both a captain and an independent observer must certify this dolphin-as-bait method was not used.
China will lower tariffs on U.S. cars to 15 percent from Jan. 1 to March 31, 2019, and will drop additional 5 percent tariffs on auto parts, as well.The Chinese government said on Dec. 14 it had been forced to raise tariffs on American cars to 40 percent in response to "U.S. trade protectionism," and that it hopes the rollback will give the two countries space to intensify negotiations in the direction of "eliminating all tariff increases." The reductions will last through March 31. China called the rollback on 211 tariff lines "a concrete measure to implement the consensus of the two heads of state," according to an informal translation of a news release from the State Council Customs Tariff Commission.
President Donald Trump, whose demands for more border wall funding have run aground in Congress, tweeted early on Dec. 13 that the revised NAFTA will save so much more money that it pays for the wall. He said: "Our new deal with Mexico (and Canada), the USMCA, is so much better than the old, very costly & anti-USA NAFTA deal, that just by the money we save, MEXICO IS PAYING FOR THE WALL!"
President Donald Trump predicted he'll make a "fantastic deal" with China, and, when asked by the TV interviewer how he could be so confident, said, "I know what I'm doing. It's business." He said during his "tremendous" four-hour meeting with Chinese President Xi Jinping in Argentina, "everything was agreed on. Now if we get it down on paper, that'll be another story, but I think we will." He said the meeting was so tremendous because he's levied 25 percent tariffs on $50 billion in Chinese imports and is willing to levy tariffs on all Chinese imports to get the concessions he wants. "That would be devastating for China. They have now agreed to go buy soybeans, tremendous amounts of soybeans. You see that already happening," he said.
A corporate farmer, a farmers' lobbyist and a farm economics researcher discussed the politics and pocketbook effects of tariffs in the sector, and how much sway farmers will have in the outcome of trade policy. The trio -- along with former Agriculture Secretary Tom Vilsack -- spoke on a panel at the Council on Foreign Relations Dec. 13. "Farmers want to stay with President Trump. A lot of them supported Trump," said Brian Kuehl, executive director of Farmers for Free Trade. "But I think the trade war is biting. Even for farmers we talk with ... who support the president, that patience is starting to wear thin."
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.