Although the Speaker of the House said the administration's decision to send over its Statement of Administrative Action and legal text of the U.S.-Canada-Mexico Agreement was "not a positive step," some NAFTA watchers said this should not be seen as a sign that the administration is trying to force the speaker's hand and demand a vote before the August congressional recess.

China plans to begin the exclusion application process on June 3, according to a scrolling notice on the China Ministry of Finance website. "The first batch of products that can be applied for exclusion will be accepted from June 3, 2019," the notice said, according to an unofficial translation. "The deadline is July 5, 2019. The second batch of products that can be applied for exclusion will be accepted from September 2, 2019. The deadline is October 18, 2019." China announced it would initiate an exclusion process when it increased tariffs on U.S. goods in response to increased U.S. tariffs on goods from China (see 1905130043). That process is seen by some as indicative of a long trade war ahead (see 1905140034).

The U.S. and Japan are moving quickly in trade talks and "trade-wise, I think we will be announcing some things, probably in August, that will be very good for both countries," President Donald Trump said in May 27 remarks before meeting with Prime Minister of Japan Shinzo Abe. Asked about that announcement during a press conference following the meeting, Abe said the two sides have agreed to "accelerate the talks between the ministers." Trump highlighted that Japan recently opened up its markets for U.S. beef (see 1905170042) and said "we hope to have even more to announce on the trade very, very soon."

The U.S. Department of Agriculture's Foreign Agricultural Service released a report on Turkey’s decision to reduce tariffs on U.S. products in response to the U.S.’s May 16 decision to reduce tariffs on Turkish steel imports. In the report, USDA includes the current tariff levels for certain U.S. agricultural products, including nuts, rice, tobacco and “fuel wood.” Turkey’s tariff changes took effect May 21, the report said (see 1905220047).

Turkey will reduce import tariffs on 22 U.S. products in response to the U.S.’s May 16 decision to cut tariffs on Turkish steel imports, Turkey’s Trade Minister Ruhsar Pekcan announced May 22 on Twitter. Pekcan said Turkey will reduce tariffs from $521.2 million to $260.6 million on certain U.S. imports after the U.S. announced it decreased tariffs on Turkish iron and steel from 50 percent to 25 percent. The U.S. also said in its announcement that it was terminating Turkey’s eligibility for benefits under the Generalized System of Preferences. “We’ll keep working on eradicating all obstacles to our bilateral trade and achieving 75 billion USD trade volume target set by our Presidents,” Pekcan said. The 22 U.S. products affected by Turkey's tariff reduction include passenger cars, alcohol, tobacco, cosmetics and polyvinyl chloride, Reuters reported May 21, saying that Turkey plans to cut in half the tariff rates on at least those five products and lower the rates on other goods. The new tariff rates will take effect this week, Reuters said.

That the U.S. made “unreasonable demands” on China “through maximum pressure” is the “underlying reason” why 11 rounds of negotiations “failed to yield an agreement,” a Chinese Foreign Affairs Ministry spokesperson said May 20. “This wouldn't work from the very beginning.” When U.S. threats didn't work and “instead led to widespread doubts at home and abroad as well as market fluctuations, the U.S. “resorted to muddying the waters and shifting the blame,” he said. “The international community bears witness to the sincere and constructive attitude China has shown in the past 11 rounds of negotiations.” There’s “hope for success only when the consultations proceed on the right track of mutual respect, equality and mutual benefit,” he said. The Office of U.S. Trade Representative didn’t comment.

Global economic growth slowed “sharply” in 2018 due to escalating trade conflicts and could continue to slow from the U.S.’s trade war with China, the Organisation for Economic Co-operation and Development said in a May 21 report. While global growth has stabilized at a “moderate level” in 2019, the report expects the global economy to grow at a “fragile” rate in the next two years, but could be derailed by “trade tensions, high policy uncertainty, risks in financial markets and a slowdown in China.” Trade tensions could slow global growth to 3.2 percent in 2019 and 3.4 percent in 2020, OECD said, and world trade will grow by just more than 2 percent in 2019, which would be the lowest rate in a decade. The estimates are conditional on “no escalation of trade tensions,” OECD added, which could reduce global gross domestic output by more than 0.6 percent over the next three years.

China’s May 13 announcement of additional tariffs on U.S. imports is expected to impact more than 300 U.S. agricultural products that were valued at about $3 billion in 2017, according to a May 17 report from the U.S. Department of Agriculture's Foreign Agricultural Service. The products affected “encompass a broad range of categories,” USDA said, including “live animals and animal products, horticultural products, grains and oilseeds, food ingredients, prepared foods, wine and distilled spirits, and sweeteners.” Combined with earlier tariff increases announced by China since April 2018, “this brings the total number of U.S. agricultural and related products targeted” by China to over 1,000 products valued at about $22.6 billion in 2017, USDA said. USDA urges U.S. exporters to “check with their local importers to verify the changes in tariff treatment.”

A Chinese Foreign Ministry spokesperson sidestepped questions at a Beijing news conference May 17 about media reports suggesting new U.S.-China trade talks are off the table for now. Presidents Donald Trump and Xi Jinping “have maintained contact through various means,” the spokesperson said. The Office of the U.S. Trade Representative didn’t comment. The U.S. and China “intend to continue further discussions,” a USTR notice in the Federal Register said, officially proposing the 25 percent Section 301 tariffs on $300 billion in Chinese goods not previously dutied. Requests to appear at public hearings on the proposed List 4 tariffs are due June 10 in docket USTR–2019–0004 at regulations.gov, and written comments are due June 17, the same day the hearings are set to begin. Post-hearing rebuttal comments are due seven days after the hearings end.

Though allegations that China’s “retreat” from previous commitments in the trade talks with the U.S. were the Trump administration’s grounds for hiking the List 3 Section 301 tariffs to 25 percent and proposing a fourth tranche of duties on remaining Chinese imports not previously dutied, it was the U.S. side that actually reneged, suggested a Chinese Foreign Affairs Ministry spokesperson May 16. “It takes sincerity to make a consultation meaningful,” the spokesperson said during a press conference. “Judging from what the U.S. did in previous talks, there are two things we have to make clear,” he said. “First, we need to follow the principle of mutual respect, equality and mutual benefit. Second, words must be matched with deeds. Flip-flopping is the last thing we need.” During the various rounds of trade negotiations, the U.S. “repeatedly rejected rules in consultations and brought difficulties to the talks, while China, on the other hand, has been acting in a constructive spirit all along,” he said. “The international community bears witness to all this.” The Office of the U.S. Trade Representative didn’t comment.