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This Week in Global Trade, Transportation & Logistics: June 21

June 21, 2019

U.S.-CHINA Takes Center Stage

Representatives from hundreds of U.S. companies and trade groups testified this week urging the Administration not to impose 25% tariffs on the remaining $300 billion USD in Chinese goods. Represented sectors include semiconductors, energy, plumbing, software, home appliances, sports equipment, boat manufacturing, chemical firms, pet supplies, bicycles and fireworks. Central themes were that the tariffs are ineffective, increase prices, and decrease U.S. workforce.

A reduction in tensions could be forthcoming, as Presidents Donald Trump and Xi Jinping spoke for the first time in almost six months. They are scheduled to meet at the G-20 summit in Japan on June 28–29. However, Administration officials are already tempering expectations of any major breakthrough.

USMCA Push Continues

On Wednesday Mexico became the first party to ratify the USMCA with a 114-4 vote in favor of the agreement. Meanwhile in the United States, USTR Rob Lighthizer was before the Senate Finance and House Ways and Means Committees this week assuring Congress that he is committed to working with them to address their concerns.

Of these concerns, House Dems are keeping up pressure on the Administration to increase the enforcement mechanisms in the agreement. They also want to remove the intellectual property protections for biologics from the USMCA that would provide 10 years of protection for test data used to develop a new class of drugs called biologics. There are concerns that the provision would limit efforts to lower prescription drug prices. The Administration is also hearing from the AFL-CIO, which wants proof that Mexico is indeed implementing its recent labor reforms. A vote on the agreement in the United States is still possible this summer but that window is closing fast with only 17 legislative days left on the calendar before the long August recess.

Canadian Prime Minister Justin Trudeau was in Washington this week also advocating for the USMCA.

INDIA Tariffs

India this week announced that it would be implementing its own tariffs against U.S. imports. The tariffs will mostly target U.S. exports of apples, almonds and chemicals to the country. This comes in response to India being kicked out of the U.S.’s GSP program, which allows developing countries to export goods to the U.S. duty-free. India is also subject to the Section 232 steel and aluminium tariffs, and has long threated to impose retaliatory tariffs. All of this comes as the Administration is taking aim at India’s trade practices – particularly market access. The Administration is already threatening further action.

Miscellaneous Trade Actions:

  • The Commerce Department has denied a Freedom of Information Act request to release its Section 232 report on automobiles.
  • In a surprise move, the Trump administration moved to suspend its World Trade Organization case against China's patent and technology transfer rules until the end of the year.
  • S. nuclear power companies are pushing the Administration not to impose quota restrictions on uranium imports in response to Section 232 probe.