President Donald Trump notified Congress of plans to sign a free trade agreement with Mexico, the White House said. The agreement will also include Canada, “if it is willing.”
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
The White House on Aug. 29 issued proclamations expanding company-specific exclusions from Section 232 tariffs and quotas on steel and aluminum. The proclamations make exclusions from Section 232 tariffs retroactive to the date the exclusion request was "accepted," rather than the date of posting, by the Commerce Department. They also authorize Commerce to grant exclusions for products from countries constrained by Section 232 quotas on steel and aluminum (currently Argentina for steel and aluminum, and South Korea and Brazil just for steel).
Canadian Foreign Minister Chrystia Freeland said her team is optimistic about the progress the U.S. and Canada can make in NAFTA negotiations this week, before the U.S. plans to start the fast-track clock in Congress. "A lot has been accomplished," she said, though she said there's still a "huge amount of work to do this week."
The Office of the U.S. Trade Representative is forming a U.S.-Kenya Trade and Investment Working Group, with the aim of deepening the trade relationship between the two countries. Kenyan Cabinet Secretary for Industry, Trade and Cooperatives Peter Munya said that although Kenya has increased its exports to the U.S. through the African Growth and Opportunity Act, "its utilization has been suboptimal. Through implementation of the recently launched National AGOA strategy and action plan, Kenya seeks greater US support in order to optimize available opportunities in the remaining seven years of AGOA." According to USTR, there's $1 billion of trade annually between Kenya and the U.S., and more than 70 percent of Kenyan exports to the U.S. are covered by AGOA preferences.
Senators and House members from both parties reacted to the outline of a bilateral deal between Mexico and the U.S. with a variety of views, ranging from celebration to skepticism. The deal aims to steer more auto manufacturing to the U.S. -- and maybe to Canada, if that country comes on board (see 1808270032).
Several trade lawyers see Chapter 19, dairy and steel and aluminum tariffs as the thorniest issues to resolve as Canada is invited to negotiate NAFTA this week. Dan Ujczo, chairman of the U.S.-Canada practice at Dickinson Wright, said that Mexico is considering agreeing to voluntary quotas in steel and aluminum, but that an agreement is "highly unlikely" this week, before the bilateral deal is forwarded to Congress on Aug. 31. "Canada may be able to raise the issue in its discussions; however, progress will be unlikely, given the long list of issues," he wrote in a note to clients. He predicted that the end of aluminum and steel tariffs on NAFTA partners -- and the dropping of their retaliatory tariffs -- will happen during the 90-day review in Congress.
The U.S. and Mexico appear to be nearing some kind of agreement on NAFTA, Jesus Seade, a trade negotiator who represents Mexico's president-elect, told reporters Aug. 22. "It could be we finish everything between the U.S. and Mexico this week, but it doesn't have to be," he said after meeting with U.S. negotiators. "I always say don't rush it." One time consideration is the Dec. 1 start date for Mexico's incoming president. A deal would likely need to be struck by the end of next week in order to meet Mexican review requirements for something to be finalized before the change in administration.
While most of the witnesses on the first day of Section 301 tariffs hearings on Aug. 20 asked that items be taken off the tariff list, several companies and a trade group asked that more products be taxed. Mike Branson, executive vice president of Rheem Manufacturing's air conditioning division, said he was pleased that several subheadings in heading 8415 were on the latest list of targets. But he said 8415.94.40 and 8414.90.80 need to be added, "otherwise Chinese exporters of finished good air conditioners will be able to avoid the tariffs."
The Consumer Technology Association asked the Section 301 hearing panel to remove 380 items from the $200 billion list, arguing that there will be a drop in consumer demand as prices rise. Because many of the items are inputs, there will not be a direct 25 percent cost increase, but CTA commissioned a study that said there could be price increases of up to 6 percent, even on U.S. products, because of tariffs on circuit boards.
Manufacturers in foreign-trade zones are being treated worse than other U.S. manufacturers when their products are on Section 301 lists, said National Association of Foreign-Trade Zones President Erik Autor. He said he's attempting to educate the U.S. trade representative on how zones work in an effort to resolve the problem. Autor said that these products are "being erroneously treated as imports from China" if the highest-valued component is from China. He said this mistake is happening because Census is trying, however imperfectly, to measure the amount of imports by country. Because the imports did not go through customs when they entered the U.S., the Census bureau asks about the finished products leaving FTZs, and assigns a country of origin to it by determining what country was responsible for the greatest proportion of its imported components.