President Donald Trump tweeted Dec. 12 that U.S. and China negotiators are “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” However, Trump has said before that the two sides were very close -- including two months ago -- and nothing came of it. Numerous media outlets reported Dec. 12 that administration officials said an agreement in principle has been reached between China and the U.S., but no announcement had been made by press time. Several media outlets reported that the U.S. was willing to cancel tariffs set to take effect Dec. 15 and cut existing Section 301 tariffs by half, and an adviser to the president said Trump would cut tariffs, but did not say by how much. An announcement is expected on Dec. 13.
House Democrats and the Office of the U.S. Trade Representative say that the new NAFTA can serve as a template for future trade deals, but experts question how that might come to pass, and a key Republican wants at least one Republican priority restored in future deals.
Agriculture Secretary Sonny Perdue said he doesn't expect the Dec. 15 round of tariffs on consumer goods from China to go into effect then, according to Bloomberg News.“I do not believe those will be implemented and I think we may see some backing away,” Purdue said at a conference in Indianapolis on Dec. 9.
A last-minute push to tighten up the steel and aluminum segment of the auto rules of origin has angered Mexico, media reports said Dec. 6. Rep. Henry Cuellar, D-Texas, had referred to this last-minute ask as not coming from House Democrats the day before (see 1912050054). The reports say that steel unions asked for a “poured and melted” standard, rather than allowing Mexican processors to take imported slab and make it into sheet metal for cars.
Texas voters send 36 members to the House of Representatives, and 18 attended a press conference Dec. 5 to say they want a U.S.-Mexico-Canada Agreement vote as soon as possible. But only one of the 13 Democrats in the Texas delegation attended -- Rep. Henry Cuellar, who represents Laredo and McAllen. Cuellar, the biggest booster of the new NAFTA in the Democratic caucus, said he'd been updated about the state of play between Mexicans and the U.S. trade representative at 9:30 a.m. that day, and “we're very, very, very close,” he said, but he said Mexicans tire of what they feel is a “one-more-thing”-style of negotiating from the Americans.
Democrats in the House insisted that their ideas about how to verify compliance with Mexico's labor laws is a balanced one that respects their sovereignty. Chief Mexican negotiator on USMCA, Jesus Seade, wrote a column published Dec. 4 that said, in Spanish, that there will be no “transnational inspectors,” even though the U.S. has pushed so much for that approach. "If the U.S. stops insisting on the pair of unacceptable ideas that the [Mexican trade group CCE] statement yesterday speaks of, we can soon have a treaty, and a very good treaty," he wrote (see 1912030033). He said that the state-to-state dispute settlement system, broken in NAFTA, "will now be 100% repaired, for all topics and sectors under the treaty."
Japan’s Diet approved the country’s trade deal with the U.S., Japan’s Ministry of Foreign Affairs said in a Dec. 3 notice, according to an unofficial translation. The deal passed in Japan’s upper house after being approved by Japan’s lower house on Nov. 19 (see 1911190045), and sets up a Jan. 1, 2020, effective date. The deal, signed by the two countries in October, will eliminate nearly 250 tariff lines of Japanese imports into the U.S. and will lower Japanese tariffs on hundreds of U.S. exports, including food and agricultural goods (see 1910070074)
Exactly how the U.S. Trade Representative has agreed to change the 10-year biologics exclusivity period in the U.S.-Mexico-Canada Agreement is unclear, but insiders are saying it will be less favorable to the pharmaceutical industry.
Two prominent Republicans questioned the suitability of switching tariffs for quotas because of currency manipulation in Brazil and Argentina, as President Donald Trump said Dec. 2 he is doing. Sen. Pat Toomey, R-Pa., the leading critic of Trump's trade policy, issued a statement that night that said, “He is justifying these tariffs by citing Section 232 of the Trade Expansion Act. This provision is exclusively meant for national security threats. Yet, the President has acknowledged that the real purpose of this action is to combat currency manipulation -- which does not pose a national security threat. Furthermore, even if this action were legitimate, the statutory window for imposing these tariffs has closed. These actions further underscore that Congress should take up my legislation that would reassert congressional authority regarding imposition of national security tariffs.”
President Donald Trump has “no deadline” for striking a trade deal with China, he told reporters Dec. 3 during a meeting in London. “I like the idea of waiting until after the election for the China deal,” he said. The Chinese “want to make a deal now, and we’ll see whether or not the deal’s going to be right,” he said. “It’s got to be right.” A trade agreement is “dependent on one thing -- do I want to make it?” Trump said. “We’re doing very well with China right now. We can do even better with the flick of a pen.” China didn’t immediately comment. Extending the U.S.-China trade war for another year past the 2020 election would be a “bad deal” for “every segment of the economy,” said David French, senior vice president-government relations at the National Retail Federation. “We want and need to see a deal as soon as possible,” said French. Four rounds of Section 301 tariffs on Chinese goods at 15 percent and higher “continue to hurt U.S. businesses, workers and consumers and are a substantial drag on the U.S. economy,” he said.