Although the main topic of the hearing was China, U.S. Trade Representative Robert Lighthizer told House Ways and Means Committee members repeatedly Feb. 27 that if they don't ratify the U.S.-Mexico-Canada Agreement, there will be no trade agenda for the next several years. "If we don’t pass USMCA, it says we don’t have a consensus," he said. Lighthizer also said: "It’s clearly better than its predecessor, it’s no question. Millions and millions of people are affected [by NAFTA]. You just have to pass it."
U.S. Trade Representative Robert Lighthizer, who is leading the China trade talks, downplayed the possibility that President Donald Trump and Chinese President Xi Jinping will sign a trade agreement a month from now. Lighthizer, who testified before the House Ways and Means Committee Feb. 27, was asked by Chairman Richard Neal, D-Mass., if he sees a package coming in the next few weeks. "I’m not foolish enough to think there’s going to be one negotiation that’s going to change all the practices in China," Lighthizer replied. "At the end of this negotiation, if we’re successful, there'll be a signing." But that's the beginning of a long process to monitor China's compliance with what it promises to do.
Kentucky Gov. Matt Bevin says there shouldn't be steel and aluminum tariffs on Canadian products, but expressed confidence that the Trump administration will make the situation right eventually. Bevin is a Republican who leads a state that is third-highest in auto industry jobs as a proportion of the workforce. "I wish people would just have patience," he said at a Feb. 21 event sponsored by the Canadian American Business Council. He suggested the reason the tariffs are still in place is "there's a limited amount of bandwidth" at the Office of the U.S. Trade Representative, and they have "a limited amount of ability to fight all these fires at once."
Canada's Ambassador to the U.S. David MacNaughton said he thinks U.S. and Canadian negotiators will resolve Section 232 tariffs on steel and aluminum "in a short while," and then reiterated the prediction, saying it will be resolved soon. MacNaughton, who was speaking Feb. 21 at an event sponsored by the Canadian American Business Council, said getting the tariffs lifted "is No. 1, 2 and 3 on my agenda here."
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.
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.
Bank of America Merrill Lynch research analysts take a "benign view" of the likelihood of new Section 232 tariffs on the auto sector and an increase to the Section 301 tariffs on goods from China, they said in a Feb. 15 report. Aditya Bhave and Ethan Harris, both global economists at the bank, said that while the Commerce Department seems likely to conclude that auto imports are a national security threat, "sustained auto tariffs" are not expected. "Reasons include delays in the release of the report, the extent of lobbying pressure against the tariffs, and the Trump administration’s hesitance to slap tariffs on consumer products, of which autos are among the most visible," the economists said.
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.
International Trade Today is providing readers with some of the top stories for Feb. 11-15 in case they were missed.
The U.S. Section 232 tariffs on steel and aluminum should be lifted as soon as possible, Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said on Feb. 15. "Mexico is not a national security threat to the United States," De la Mora said while speaking at a think tank. Mexico can cooperate with the U.S. in monitoring customs, avoiding transshipment and policing tariff evasion, "all the things that are concerns to the industry and are legitimate concerns," she said.