Mara Lee

A House Ways and Means Trade Subcommittee hearing on the effects of tariffs on rural communities has been scheduled for July 18, subcommittee chairman Rep. Dave Reichert, R-Wash., announced. "Farmers, growers, and ranchers in my home state of Washington and around the country are significantly hurt because products that they are forced to import to stay competitive -- such as agriculture equipment, chemicals, steel, and aluminum -- are now prohibitively expensive," he said. "Adding insult to injury, these same farmers, growers, and ranchers are experiencing severe retaliation through prohibitive tariffs and other measures by their major customers including China, Canada, Mexico, and the EU." No witnesses have been announced. Democrats on House Ways and Means have been pressing for months for administration officials to testify on various trade strategies, including NAFTA renegotiations and China (see 1807110024).

A bipartisan bill that would require congressional approval before tariffs are imposed on national security grounds was introduced in the House of Representatives July 11. Like the so-far-unsuccessful efforts of Sen. Bob Corker, R-Tenn., the bill would be retroactive. The Section 232 tariffs and quotas on aluminum and steel would be rolled back after passage, and approval of those actions would be needed before they could resume.

Some leaders on the House Foreign Affairs Committee intend to file legislation to remove China's Most Favored Nation status, according to Rep. Ted Poe, R-Texas, chairman of the Subcommittee on Terrorism, Nonproliferation, and Trade. Poe said in a July 11 interview that Asia Subcommittee Chairman Ted Yoho and the ranking member on both subcommittees are all in agreement on the legislation. China has had MFN status with the U.S. since 1980, but that was made permanent only in 2001. In 1990, in the wake of the Tiananmen Square massacre, Congress included non-binding language suggesting the president rethink MFN for China.

It's only a "baby step" toward sparing Canada, Mexico and the European Union from steel and aluminum tariffs, as Sen. Bob Corker, R-Tenn., said, but 88 senators issued a rebuke of how the president has justified steel and aluminum tariffs under the guise of national security. Eleven senators -- all Republicans -- voted no, including both senators from Idaho, Wyoming and South Carolina. The last state could be badly damaged if President Donald Trump levies tariffs on imported auto parts under the same national security justification. Corker's home state of Tennessee also would be vulnerable if an auto parts tariff is implemented.

Canada's foreign ministry said July 10 that it welcomes the Department of Commerce's decision to revoke countervailing duties on Canadian supercalendered paper, as announced by U.S. Trade Representative Robert Lighthizer on July 6. The World Trade Organization circulated a panel report a day earlier that said the U.S. was not following international trade law in the way it had calculated the duties.

Large-scale agriculture is one of America's competitive advantages, and farm exports are one of the top targets for tariffs in China, the European Union, Mexico and Canada. But Rob Johansson, chief economist at the U.S. Department of Agriculture, said even though tariffs are high enough to disrupt sales, "at least in terms of short-run effects, you could see trade increasing." Johansson explained: "Markets will find a way." As China buys more soybeans from South American countries, such as Argentina and Brazil, U.S. soybeans will go to the markets Brazil and Argentina had been selling to. He said agriculture economists will be watching to see which tariffs are high enough to keep a product out of the market. Johansson was one of the experts discussing the Organisation for Economic Co-operation and Development (OECD)-United Nations Food and Agriculture Organization's 10-year agricultural outlook at a program in Washington on July 10.

The U.S. Trade Representative is proposing an additional 10 percent tariff on 6,031 8-digit tariff lines -- about $200 billion worth of imports. Those who wish to testify for or against the inclusion of an item on the list must file by July 27, and written comments are due by August 17. Hearings will be held August 20-23. Senior government officials said a decision on tariffs will be made sometime after August 30.

U.S. Trade Representative Robert Lighthizer on July 6 blasted a World Trade Organization ruling against U.S. countervailing duties on supercalendered paper from Canada (see 1807060024), saying Canada should have dropped the case because the Commerce Department will revoke the CV duty order. Lighthizer said Commerce terminated the CV duty order supercalendered paper on July 5, the same day as the WTO decision, at the request of the domestic manufacturer that originally requested the duties. No announcement from Commerce has yet been published.

The Philippine government said that the late May meeting between Deputy U.S. Trade Representative Jeffrey Gerrish and senior Philippine economic ministers and senators was laying the groundwork for the "scope, timing and process" that could lead to a free trade agreement between the two countries. A statement from the Philippine government released July 9 said the May talks "centered on America’s interest in initiating 'informal preparatory meetings'" that could be the beginning of FTA negotiations.

Nearly two weeks after the last batch of Section 232 tariff exclusion determinations were posted, the Bureau of Industry and Security posted eight more denials, all for Borusan Mannesmann Pipe in Texas, a Turkish-owned oil country tubular goods production facility.