Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said he doesn't think the Trump administration will ever levy an additional 25% tax on imported autos, even as President Donald Trump continues to mention that threat in an effort to get European negotiators to open up to American agriculture exports. Grassley, who was responding to a reporter's question on how to get the European Union to bend during a conference call Feb. 18, said he doesn't think the EU will negotiate much on ag.
China will accept exemption applications for retaliatory tariffs on nearly 700 U.S. products -- including a range of agricultural goods, metals and oils -- beginning March 2, China’s Finance Ministry said in a Feb. 17 notice, according to an unofficial translation. The 696 exempted items include beef, pork, seafood, soybeans, crude oil, certain types of alcohol and more. In their applications, Chinese importers can apply for exemptions for additional goods that are not included on the exempted list, the notice said. China said it will respond to applicants in a “timely manner.”
The European Union-Vietnam trade agreement will take effect this year, according to a Feb. 12 press release from the European Commission. The agreement was approved by the European Parliament Feb. 12 and now awaits ratification by Vietnam, the commission said. The deal, which the commission called the “most comprehensive” trade agreement between the EU and a developing country, will eliminate “virtually all” tariffs on goods between the two countries. The commission expects the deal to take effect in “early summer.” The two sides expected to ratify the deal last year (see 1905030012).
The U.S.-Japan mini-trade deal covers just 5 percent of trade between the partners, according to Bruce Hirsh, a principal at Tailwind, but he said the likelihood of further progress is small. Hirsh spoke while at the National Association of Foreign-Trade Zones legislative summit on Feb. 11. “Japan wasn’t interested in doing a bilateral deal at all, but they recognized there was only so long they could keep the U.S. at bay,” he said. He said that what Japan gave to the U.S. “fell a little bit short of TPP,” or the Trans-Pacific Partnership. He said beef and pork got TPP parity, but rice got nothing and “dairy got a lot, but not everything.”
Treasury Secretary Steven Mnuchin, testifying on the president's budget at a hearing Feb. 12, was asked repeatedly about what the Organization for Economic Cooperation and Development might do on taxing digital companies, precluding France's digital services tax.
In a chat with Agriculture Secretary Sonny Perdue, U.S. Trade Representative Robert Lighthizer agreed that it should not be the case that the European Union sells $10 billion to $12 billion more in food products to U.S. consumers than the U.S. sells in food and commodities to the region. “We have to get some more concessions from Europe,” he said. “Their prices are higher, they're less efficient, they don't use the science like we do, and we have a deficit with them? It's crazy.”
In his State of the Union address, President Donald Trump touted a “groundbreaking new agreement with China” without alluding to the work yet to get done in phase two, and said replacing NAFTA was a promise he kept. “Unfair trade is perhaps the single biggest reason that I decided to run for President,” he said, according to a White House transcript. “Six days ago, I replaced NAFTA and signed the brand-new U.S.-Mexico-Canada Agreement into law.” Trump “also promised our citizens that I would impose tariffs to confront China's massive theft of America’s jobs,” he said. “Our strategy has worked. Days ago, we signed the groundbreaking new agreement with China that will defend our workers, protect our intellectual property, bring billions and billions of dollars into our treasury, and open vast new markets for products made and grown right here in the USA.”
Experts disagreed on whether the spread of the coronavirus will make it impossible for China to reach its purchase commitments, or make it more likely that China will wish to please the U.S., as its economy suffers. But one thing most agreed on -- the disease's impact is another reminder, after the tariff war, that companies should diversify instead of being wholly reliant on Chinese factories. The experts were on a panel at the Washington International Trade Association conference Feb. 4 on the future of U.S.-China trade.
A letter from the Mexican government obtained by Reuters reassures local stakeholders that seasonal antidumping cases against Mexican produce will bring retaliation against U.S. agricultural exports. The letter was sent Jan. 27 to a trade group for Mexican agricultural exporters. The president of that trade group told Reuters that if America targets Mexican mangoes, tomatoes or berries, “U.S. exports like yellow corn, wheat and pork could be retaliated against.”
Singapore recently finished negotiations with Chile and New Zealand on a digital trade agreement, according to a Jan. 24 report from the Hong Kong Trade Development Council. The agreement will “boost trade,” improve the use of “electronic documentation for cross border-trade” and establish protocols for “e-invoicing, personal information protection, cybersecurity, online consumer protection, digital identities, fintech, artificial intelligence, data flows and data innovation,” the report said. The framework will also allow the customs agencies of the three countries to share electronic trade documents by connecting their respective national single windows, the report said. The countries have “committed” to ratify the agreement by April, but a formal date has not yet been announced.