When President Donald Trump decided to renegotiate NAFTA, "the threat of this agreement unraveling forced the business community to up its game," said Pete Sheffield, a lobbyist for Enfield, an oil and gas pipeline operator. David Woodruff, who represents CN, a Canadian-U.S. railway company, said that CN representatives met with more than 130 members, as they realized they " needed to be on the offense."
Mexican Ambassador to the U.S. Martha Barcena said several Democrats in Congress have asked her about the exclusivity period for biologics in the new NAFTA -- a provision that is also not popular in the Mexican Senate. "We accepted this in the negotiation," she said. "We may not have a perfect agreement, but it is a good agreement." She added that since biologics are the future of prescription medicines, from a Mexican perspective, "the less time of protection, the better. In a way, it was one of the big concessions of Mexico." She said that those who are opposed to the biologics provision, because they believe it will make drugs more expensive for consumers, should ask Office of the U.S. Trade Representative officials if they are willing to change it.
Trade is critical to manufacturing's success, because only 5 percent of the world population is in the United States, the head of the largest industrial trade group said Feb. 20. "If our economy is going to succeed, if we’re going to stay on top, we need to sell the things Americans make to those people [around the world] -- before someone else does," National Association of Manufacturers CEO Jay Timmons said in Houston on a speaking tour promoting manufacturing careers. "Being part of a strong world economy raises standards of living here at home and reduces poverty around the globe." He said manufacturers are counting on Congress to ratify the new NAFTA, known as the U.S.-Mexico-Canada Agreement, quickly, because Canada and Mexico are America's most important trading partners. And, he added, "we want to see the administration come to an agreement to hold China accountable. China cheats -- plain and simple. And it hurts us here in America. And the tariffs on their products and on ours? Well, they hurt manufacturers, too. China is the most challenging market in the world -- but it also has big opportunities. So, a trade agreement between the two countries would not only fix those problems and set new rules -- it would be historic."
The signals that tariffs will not go up on $200 billion worth of Chinese imports on March 2 is a small relief for businesses, according to Venable partner Lindsay Meyer, but they're still challenged by the difficulty "of forecasting what the second half of this year will present." Some importers that work with Venable are getting their suppliers to shoulder some of the additional tariff costs; others are declining to enter two-year contracts unless there's the ability to reopen the deals if tariffs increase. "The companies, they’re making their plans cautiously," she said. "I think the anxiety level isn’t at a level 10 that it was, but it certainly hasn’t dropped down below 5."
U.S. Trade Representative Robert Lighthizer and Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi are planning for meetings in April and May, with an aim of defining the scope of trade talks before President Donald Trump meets with Japanese Prime Minister Shinzo Abe in late May, according to a report in Nikkei Asian Review. "Tokyo believes that by starting trade talks in the spring it can dodge [Section 232 auto] tariffs for the time being. But there are concerns that Trump could play the tariff card nonetheless if Japan's approach fails to satisfy," the article said. A USTR spokeswoman said it has no announcement on the next meeting between Lighthizer and Motegi.
The act that funds the Department of Homeland Security for the rest of the fiscal year provides more than half a billion dollars for more non-intrusive imaging equipment in in-bound lanes at the Mexican border, as well as $6 million for equipment for outbound traffic. It's the single biggest-ticket item that affects trade shipments, but there are many others: $10 million for ACE enhancement that will include post-core development and collections, and $2 million for the Office of Trade for targeting.
A senator who has not yet signed on to either current Senate bill tackling national security tariffs says he prefers the stronger approach taken by Sen. Pat Toomey, R-Pa. (see 1901310029). Sen. Richard Blumenthal, D-Conn., said in a phone call from Connecticut that he believes that because Toomey's bill requires Congress to act within 60 days to accept or reject new tariffs, it would still allow the tariffs to be used in true national emergencies. Blumenthal said that because the approach taken in the other bill, sponsored by Sen. Rob Portman, R-Ohio, (see 1902060051) -- essentially a disapproval resolution after tariffs are announced, giving Congress power to overrule the president on future Section 232 tariff actions -- it would require veto-proof majorities to change the White House's course. "In this day and age, veto-proof majorities are pretty rare," Blumenthal said.
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.