The chemicals industry deserves to be spared from a $16 billion tranche of Section 301 tariffs, Ed Brzytwa, the director of international trade for the American Chemistry Council, said during a July 25 hearing on the tariffs. After testimony from more than a half-dozen businesses that import, manufacture or use imported chemical inputs, he explained that the U.S. chemicals industry has a cost advantage over China now because of cheap natural gas. Because China imports more than $5 billion a year in chemical compounds and plastics from the U.S., the industry's a natural target for retaliation. That -- paired with the fact that many chemical and plastic manufacturers need Chinese inputs -- means that putting chemicals on the list is doubly painful.
President Donald Trump announced that the U.S. will "resolve the steel and aluminum issues" with the European Union after the EU agreed to buy more soybeans and liquefied natural gas, and to enter negotiations to drop non-auto industrial tariffs to zero. The EU's retaliatory tariffs will also be "resolved," said Trump.
The U.S. and the European Union will work together to eliminate bureaucratic barriers and to move all non-auto industrial tariffs to zero, President Donald Trump announced at a Rose Garden press conference July 25. Trump said the EU is going to work to buy more soybeans, services, chemicals, pharmaceuticals and LNG. "They're going to be a massive buyer," he said, referring to the liquefied natural gas.
The Section 232 steel and aluminum product exclusion process is flat-out broken, according to House Ways and Means Chairman Kevin Brady, R-Texas, and he said at least four aspects of the Commerce Department approach need to change. Brady, who was speaking to reporters at the Capitol on July 23, said the length of the exclusion -- now a year from the time it's granted -- should be longer. He said there should be a way to appeal a denial. If a product is excluded for one company, it should be excluded for all importers of the same product. And, he said, "we think you ought to grandfather major existing projects," such as pipelines under construction.
More than 20 businesses and trade groups -- the first set of more than 80 scheduled to testify -- told the Section 301 investigation panel on July 24 that including their imports on the tariff list of $16 billion in Chinese products will lead to higher consumer prices, lower profits, abandoned expansion plans or worse. For Jane Hardy, CEO of Brinly-Hardy Company in Kentucky, having Harmonized Tariff Schedule heading 8432.4200, fertilizer spreaders, added to the list is an existential threat. With the tariff on steel, her family-owned company, founded in 1839, began paying 25 percent to 37 percent more for the metal, even though she'd always bought domestic steel. Then, with the first tranche of Section 301, Chinese wheels and hardware that her Indiana factory uses as it builds equipment were taxed at 25 percent.
The hosts of the G-20 meeting of finance ministers in Buenos Aires declined to criticize U.S. protectionism when pressed by reporters, or give specifics about what others said to Treasury Secretary Steven Mnuchin, who was in attendance. Argentina's Finance Minister Luis Caputo said that while there are trade tensions, and that was the hottest topic at the meeting, "we had a very constructive dialogue. We have reasserted that trade and investments are an engine for growth, productivity, innovation, job creation... ."
At the same time that U.S. trade policy is disrupting sales to our biggest trading partners -- Canada, China, the European Union, Japan and Mexico -- the Office of the U.S. Trade Representative is highlighting talks with tiny New Zealand. USTR announced on July 23 that the two countries concluded two days of talks on July 20 under the Trade Investment and Framework Agreement. The U.S. pressed New Zealand for improvements in honoring intellectual property. The two countries "agreed to a program of expanded cooperation on issues of shared interest, including working together to address trade barriers in third-country markets and exchanging information about unfair trade practices," the release said. It marked the second time New Zealand officials and top USTR officials have met this summer (see 1706160026)
It's worth it to make an effort to conclude NAFTA negotiations, Mexico's President-elect Andres Manuel Lopez Obrador told President Donald Trump in a letter he sent July 12. The letter was read aloud to Mexican reporters on July 22. "I think that prolonging the uncertainty could curb investment in the medium and long term, which would obviously create problems for Mexico's economic growth," he wrote in Spanish. He said Canada should be at the table, too.
Canada asked for a Chapter 20 review under NAFTA of safeguard tariffs on solar panel imports.The tariffs on solar panels apply after a country has exported 2.5 gigawatts worth of product (see 1801230052), it said in a news release. Canada noted the U.S. International Trade Commission recommendation that Canada be excluded from any safeguard measures after finding that imports from Canada are not a source of injury to U.S. industry. Despite that, Canada is still subject to the tariffs. "The tariffs violate NAFTA rules and were imposed despite the fact that the United States International Trade Commission found that imports of solar panels from Canada were not harming U.S. industry," Chrystia Freeland, Canada's foreign minister, said July 23.
Mexico's chief NAFTA negotiator will meet with U.S. Trade Representative Robert Lighthizer on July 26, but Canada's foreign minister will not attend. Economy Minister Ildefonso Guajardo told reporters in Mexico about the trip to Washington. The administration has been telling lawmakers that its ambition is to close a deal with Mexico first, and then bring Canada to the table. White House Press Secretary Sarah Huckabee Sanders told reporters July 18: " We see a lot of progress on the conversations with Mexico and if we could make a bilateral deal with them, we're certainly very happy to do that." But Mexico continues to insist it wants a trilateral, not a bilateral, trade agreement.