Mara Lee

There's been momentum in the NAFTA negotiations, but "we still think it is likely the president could withdraw," said Brian Kingston, a vice president with the Business Council of Canada. President Donald Trump has threatened to leave the deal (see 1708310011). The Canadian government has made a lot of diplomatic outreach in the U.S. Congress recently, and Kingston is hopeful that lawmakers would just sit on the request and not take action, he said during an event at Johns Hopkins University's School of Advanced International Studies on March 15. That would result in a "zombie NAFTA," he said. "Not an ideal outcome." An announcement to withdraw is really a six months' notice of withdrawal, and some believe the U.S. cannot end NAFTA tariff rates without a congressional vote to set replacement rates (see 1711150031).

The U.S. will request World Trade Organization consultations with India to resolve a trade dispute, as it contends that five Indian government programs provide $7 billion in illegal subsidies for exports. U.S. Trade Representative Robert Lighthizer made the announcement March 14, with a statement that said, in part, that “USTR will continue to hold our trading partners accountable by vigorously enforcing U.S. rights under our trade agreements and by promoting fair and reciprocal trade through all available tools, including the WTO.”

The path forward for Miscellaneous Tariff Bill and Generalized System of Preferences renewals remains uncertain despite some hope that both could be part of the omnibus funding bill that has to pass before March 23. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said nothing concrete on whether on the bills will pass this month. "I'd like to see action on both of those, because there's such bipartisan support here in the House," he said when asked if they will be part of the omnibus.

Despite the recent attention on Section 232 tariffs, some expect the effects of the Section 301 investigation started last year (see 1708210024) to eclipse the steel and aluminum import restrictions, panelists said at a Washington International Trade Association event March 13. Wendy Cutler, a former acting deputy U.S. trade representative, said once the White House announces what it's doing to respond to China's intellectual property transgressions, "we won't be talking about steel and aluminum."

Australian Prime Minister Malcolm Turnbull said in a March 12 tweet that President Donald Trump gave a commitment that Australian steel and aluminum will not be subject to tariffs. The path to get an exemption for the European Union, however, looks rocky. Trump tweeted on March 10: "The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!"

The U.S. trade representative's proposal to simplify bringing antidumping and countervailing duty complaints on produce could have several unintended consequences, according to Darci Vetter, a former chief agricultural negotiator at the Office of the U.S. Trade Representative. One of the U.S. proposals for NAFTA 2.0 is to allow producers in a certain region -- say, Florida tomato growers -- bring an AD/CVD complaint during their crop season, rather than requiring that 51 percent of all growers nationwide sign on to the complaint (see 1709130031). Vetter spoke March 8 at a Georgetown Law School event.

Raising the NAFTA rules of origin to 80 percent could be counterproductive, said House Ways and Means ranking member Sander Levin, D-Mich., whose district includes Detroit suburbs. "If you raise it to 80 percent, it may well be that more and more of the content will be made in Mexico," Levin said at a March 8 Georgetown Law School event. "As important as the rule of origin is, I've been trying ardently to elevate this issue of the total [trade] imbalance."

President Donald Trump announced that tariffs of 25 percent on steel and 10 percent on aluminum will take effect on March 23, but the tariffs are not going to be as global as he suggested a week ago. Canada and Mexico's exports will not be subject to the tariffs while NAFTA negotiations continue, Trump said, and assuming the U.S. can get a deal "that's fair for our workers, fair for our farmers -- we love our farmers -- fair for our manufacturers," then those countries will be exempted permanently. "I have a feeling we're going to make a deal on NAFTA," he said during a March 8 signing ceremony.

The House Homeland Security Committee recommended a bill that requires the Department of Homeland Security to do a comprehensive review and security assessment of the Transportation Security Administration's Known Shipper program. The Air Cargo Security Act, H.R. 4176, asks if the program should be eliminated, "considering the full implementation of 100 percent screening." The House bill directs TSA to establish an air cargo security division with at least four employees, but says those people would have to come from within the agency's existing staffing.

White House Press Secretary Sarah Sanders said that Mexico, Canada and other countries may avoid the soon-to-be-announced tariffs on steel and aluminum. "There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well based on that process," she said during a March 7 press briefing. President Donald Trump is still expected to "sign something by the end of the week," she said.