Automakers, titanium producers and drug industry players shared diverging views inside their respective sectors of how Office of the U.S. Trade Representative negotiators should approach a U.S.-Japan free trade agreement. The department invited the public to share opinions Dec. 10 on what priorities negotiators should pursue, and how the new deal should be similar or diverge from the path forged for the U.S.-Mexico-Canada Agreement and the Trans-Pacific Partnership. Autos are the single biggest import from Japan, making up $51 billion of the $136 billion in goods imports in 2017, according to USTR.
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
Importers paid more than $6 billion total in tariffs in October, the first full month that there were additional tariffs on $200 billion in Chinese goods, according to an analysis from Tariffs Hurt the Heartland. The group said that amount -- which is $3.1 billion more than was paid in October 2017 -- has not slowed imports on the tariffed goods, but has drastically cut exports that are subject to retaliatory tariffs. The group is funded in part by farm interests, who have been particularly hard-hit by retaliation. Their Dec. 7 release said that imports subject to new tariffs declined 0.6 percent in October, while exports targeted for retaliation fell 37 percent. About two-thirds of the increase is for Section 301 tariffs, while steel and aluminum tariffs cost an additional $446 million. The goods on the Section 301 list would have cost $394 million in tariffs before the action; in October, tariffs on those imports were $2.6 billion. CBP recently said it has assessed more than $10 billion under the recent Trump administration Section 201, 232 and 301 trade remedies (see 1811260010).
The World Trade Organization's dispute settlement body agreed to set up two more panels to judge whether the U.S. was justified in levying aluminum and steel tariffs on trading partners under a national security rationale. The decision, made Dec. 4, added Switzerland and India to the list of eight countries and the European Union that will have panels challenge the tariffs (see 1811210029).
Complaints about weak enforceability of the new U.S.-Mexico-Canada Agreement were found among both trade advocates and free-trade skeptics as they reacted to the signing of the pact Nov. 30 in Argentina. Customs and trade facilitation elements were praised by many interest groups, but the failure to get higher de minimis levels from Canadian and Mexican negotiators was a disappointment, several said. And the fact that steel and aluminum tariffs on Canada and Mexico remain troubles many, with the Global Automakers saying "it is unfathomable that this important issue has not been resolved in the context of these negotiations."
Sen Rob Portman, R-Ohio, predicted on Nov. 28 that a plan toward ending the steel and aluminum tariffs on products from Canada and Mexico will come before Nov. 30. "My sense is Mexico might not sign [the new NAFTA] at the end of this week unless there's some sort of resolution," he said to a group of about 35 at the Hudson Institute. The Mexican ambassador has said his country would sign without a resolution on the tariffs, as long as there is a clear path to reach one (see 1811200036). But as far as preventing Section 232 tariffs on autos -- a matter of great concern for the EU and Japan -- Portman suggested he is powerless to even get a hearing on his related bill. "If you have any influence with the Ways and Means Committee and Senate Finance Committee," he told the audience, he would like them to use it. "We need a hearing."
An aluminum manufacturer, aluminum consumers and the head of the dairy processors' lobby told reporters and congressional staff members that they don't want quotas as a resolution to the metals tariffs on Canada and Mexico -- even if those quotas have "head room" above current production, as they said is rumored.
CBP has assessed more than $10.3 billion in duties under the recent major trade remedies started during the Trump administration as of Nov. 20, a CBP spokeswoman said. That marks an increase in assessed duties of more than $3 billion since the previous CBP update with numbers from about a month ago (see 1811210013). Most of that increase stems from the Section 301 tariffs on goods from China, which now account for about $5.8 billion in assessed duties, she said. The first tranche of Section 301 tariffs took effect on July 6 (see 1807050033); the second list took effect on Aug. 23 (see 1808070046); and the third, on Sept. 24 (see 1809240015). CBP also has assessed about $3.1 billion under the Section 232 tariffs on steel and $991 million under tariffs on aluminum, the spokeswoman said. The Section 201 trade remedies on washing machines and solar cells (see 1801230052) account for $489 million in assessed tariffs, she said.
The Commerce Department will hold public testing sessions Dec. 6-7 in Washington as part of its development of an online portal to handle requests for exemptions from Section 232 tariffs on steel and aluminum products, it said in a notice. Once the portal is established, the portal will replace the current process on regulations.gov, “streamlining” the exclusion process by using web-based forms and allowing users to view and track exclusion requests, objections and rebuttals in a single system. Commerce intends to transition to the new portal “sometime in late 2018 to early 2019,” it said. Before it does, the agency will issue amendments to its Section 232 regulations and allow for public comments on the new process. Requests to participate in testing should be submitted by email by Nov. 29. Remote testing will not be available, and participants must pay their own travel costs to Washington. Only citizens and lawful permanent residents of the U.S. will be eligible to test. Participation will be capped at 36 people, with priority given to those that have submitted documents related to Section 232 exclusion requests.
CBP has assessed more than $7.1 billion in duties under the recent major trade remedies started during the Trump administration as of mid-October, a CBP spokeswoman said. That includes $3.4 billion in duties from the Section 301 tariffs on goods from China as of Oct. 17, she said. The first tranche of Section 301 tariffs took effect on July 6 (see 1807050033); the second list took effect on Aug. 23 (see 1808070046); and the third, on Sept. 24 (see 1809240015). CBP also has assessed about $2.6 billion under the Section 232 tariffs on steel and $738 million under tariffs on aluminum as of Oct. 16, the spokeswoman said. The Section 201 trade remedies on washing machines and solar cells (see 1801230052) account for $416 million in assessed tariffs as of Oct. 16, she said.
The World Trade Organization's Dispute Settlement Body is establishing panels to review seven countries' complaints about Section 232 tariffs on steel and aluminum, as well as panels on Chinese, Canadian, Mexican and European retaliatory tariffs in response to those tariffs. The countries that requested a WTO verdict about the U.S. action include China, Canada, Mexico, Norway, Russia, Turkey and the European Union. All said that the tariffs, claimed as necessary to protect national security, are really safeguards, but the U.S. did not follow safeguard rules. The retaliatory tariffs, aimed to mirror the cost of the tariffs, are illegal, the U.S. argues. Countries hit by safeguard tariffs can raise tariffs in response, but only after a WTO panel says they can.