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The countries moved closer to removing the Section 232 steel and aluminium tariffs against Canada and Mexico, a major sticking point, which could pave the way for possible ratification of the agreement this year. This move also could push Democrats to work out any remaining differences they have with agreement in its current form. This would be welcome news for US agriculture which has endured retaliatory tariffs from Canada and Mexico in response to the 232 tariffs.

US-CHINA Escalation

This week President Trump announced its intent to impose 25% tariffs on the remaining roughly $300B in Chinese imports. This comes after China announced Monday that retaliatory tariffs on $60B of U.S. goods will kick in on June 1 in response to last week’s actions by the U.S. Similar to prior Section 301 actions, there will be a Comment period followed by final list. But recent reports suggest that the two world powers are far from a consensus.

Further ramping up pressure, President Trump issued an executive order Wednesday laying the groundwork to ban imports of Chinese information communication technology exports. And the Commerce Department this week blacklisted Huawei, which could make it nearly impossible for it to do business with US suppliers.

Auto Tariffs

The administration today could delay plans to impose auto tariffs for up to 6 months. This comes as welcome news for upcoming trade negotiations with Japan and the EU that have been dulled under the threat of auto tariffs. But not one to give away anything for free, the postponement could be tied to an agreement to limit their auto exports to the US.

The Aircraft Wars

Boeing and Airbus took center stage in Washington this week as industries petitioned the USTR not to impose $11B of Section 301 tariffs on imports from the EU. The tariffs came in response to a finding at the World Trade Organization that the EU was subsidizing Airbus. Alabama officials, including the Mayor of Mobile, testified on behalf of their State and Airbus, which has one of its largest production facilities in Mobile. Representatives made the point that the tariffs, which affect imports of Airbus aircraft parts and other products, would create a negative economic impact on the state.

The EU has its own case against the US for alleged subsidies to Boeing. If there is a similar finding in favor of the EU, it too could win approval to impose billions of dollars of its own tariffs on US goods. But that decision could be 6 to 12 months away.

Miscellaneous Trade Actions:

  • India delayed imposing tariffs on US goods in retaliation for steel and aluminum duties to June 16.
  • The administration formally kicked Turkey out of the Generalized System of Preferences program.
  • Commerce announced Thursday that imports of quartz surface products are being unfairly subsidized and dumped in the United States, imposing anti-dumping duties ranging from 266 to 337 percent.
  • US and Mexico continue to negotiate over anti-dumping duties on tomato imports to the US.