A change in approach that goes beyond the tariffs that have inspired Chinese tariffs in return is coming, said Jeremie Waterman, president of the China Center at the U.S. Chamber of Commerce. "We're now entering into the next phase on export controls; that will be a major issue for the business community, in terms of being able to bring your IP and create value in China." With regard to rolling back the tariffs, he said there's no process for negotiations now, and CEOs are starting to try to figure out if this is going to last long enough that they need to make changes to where they manufacture, including leaving the U.S. because of Chinese retaliatory tariffs. "The supply chain conversations at the C suite level are very hot and heavy right now," he said.
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
Both Democrats and Republicans said auto tariffs aren't going to help add U.S. manufacturing, and numerous members of the Senate Finance Committee questioned the logic of the Trump administration's national security rationale for threatening them. Sen. Rob Portman, R-Ohio, noted that he has a bill that would not allow the president to act unilaterally to raise tariffs on autos or auto parts under Section 232, and that Honda North America has endorsed it. But little of the two-hour hearing focused on how Congress could take back power on trade to constrain the administration. Even committee ranking member Ron Wyden, D-Ore., who criticizes the president's trade policy as chaotic and ineffective, hedged that "perhaps" it is "time for the Congress to think about reclaiming that authority," in his opening statement.
A Canadian customs broker told a group of her colleagues from the U.S. that the last year "has been probably the most challenging year of my life." Kim Campbell, who is president of MKMarin Trade Services, fears it could get worse. If the Trump administration decides to levy tariffs on Canadian cars, car parts or uranium under Section 232, the amount of goods that now cross the border tariff-free would drop dramatically, she believes, because Canada would have to put in place counter-tariffs.
U.S. Trade Representative Robert Lighthizer defended the increasing pressure on China with tariffs while speaking at the 2018 Concordia Annual Summit in New York on Sept. 25. Asked about the approach and its effect on consumer prices, Lighthizer said that "first you have to start with the proposition that we have a problem." He suggested that a lot of people in the business community don't believe that China's theft of intellectual property and a $342 billion trade deficit with China are a big deal. "They inform that judgment because they’re making money in the short term in that environment, so they’re defensive of that. If you start off with the proposition that this is a major, major threat to the future of the U.S. economy, then you have to do something."
U.S. Trade Representative Robert Lighthizer cast doubt Sept. 25 on a trilateral NAFTA coming together, saying that the parties are "sort of running out of time," because if the deal isn't done before the current administration in Mexico leaves office, the incoming president will want to reopen negotiations. The U.S. and Mexico have come to many agreements bilaterally in recent weeks.
The World Trade Organization is ill-equipped to handle the conduct of non-market economies, U.S. Trade Representative Robert Lighthizer said Sept. 25, but that doesn't mean it's useless. "I personally believe it’s an important body," said Lighthizer, who was once nominated to serve on the WTO appellate body but ultimately wasn't chosen. "If we didn’t have it, we’d have to invent it." Lighthizer was speaking at the 2018 Concordia Annual Summit in New York.
On the first day of tariff collection for the third phase of the U.S.-China trade war, another 5,745 products became subject to 10 percent higher levies, with the threat of an additional 15 percent levy on those products following in a little more than three months.
President Donald Trump and the president of South Korea signed the revised U.S.-Korea Free Trade Agreement (see 1809040039) during a ceremony on the sidelines of the United Nations meeting in New York Sept. 24. The change from tariffs to quotas on steel that was part of the KORUS renegotiation has already taken effect. No other immediate changes to duties on South Korean goods is expected from the FTA signing. The White House also released a fact sheet on the deal and trade with South Korea.
Customs brokers this week will be lobbying congressional leaders to press the Department of the Treasury and CBP to change the proposed rule that excludes excise taxes from drawback, and will be asking members to co-sponsor the Customs Business Fairness Act (see 1712180053). The act, H.R. 4657, would change bankruptcy law so that customs brokers are not subject to clawback on duties advanced to CBP after a client declares bankruptcy.
Several major issues between the U.S. and Canada remain unresolved as NAFTA negotiations proceed, Canadian and Mexican negotiators said on Sept. 20. Canada's Foreign Minister Chrystia Freeland didn't dispute a reporter's characterization that the fact that the word "progress" was missing from her description of NAFTA talks was significant. "I chose my words carefully. Today we discussed some tough issues. The conversation was constructive, we all continue to work very hard, and Canada's objective continues to be ... to achieve a deal and to achieve a deal that is good for Canada."