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This Week in Global Trade, Transportation & Logistics: May 3, 2019

May 03, 2019

USMCA Faced an Up and Down Week

Senate Finance Chairman Chuck Grassley and other Senate Republicans warned that they will block the USMCA if the administration does not remove the Section 232 steel and aluminum tariffs on Canada and Mexico. The tariffs are of particular concern to US Agriculture due to the retaliatory penalties that the two countries imposed on US goods in response. Commerce Secretary Ross maintains that the administration will not lift the tariffs without another safeguard in place.

The administration received some help from Mexico earlier this week with passage of a landmark labor reform law – something Democrats have been pushing for to gain their approval. However, some Democrats are signaling that they still have concerns over enforceability of labor and environmental standards.

In a letter to the House Ways and Means and Senate Finance Committees, the Tech Industry voiced its support for the USMCA, noting the positive impact of the digital trade rules that the industry believes would provide a global norm addressing access and usage of digital trade.

US-CHINA Deal May be Close

Treasury Secretary Mnuchin and US Trade Representative Lighthizer participated in trade negotiations this week in Beijing. Indications are that a deal may be close, and that US businesses may see the removal of a portion of the 10% tariffs on the $200 billion worth of Chinese imports (the third list) with schedules to remove the rest of the items quickly. However, the 25% tariffs on the remaining $50 billion in imports (lists one and two) likely will remain until after the 2020 election. It is unknown whether the Chinese retaliatory tariffs will follow suit.

Chinese negotiators are scheduled to be in Washington for the final rounds of talks on May 8, and reports are that an announcement of a deal is possible by next Friday

US-JAPAN Trade Talks Continue

The administration is hoping for a quick deal to increase US agriculture exports to Japan with something more comprehensive down the line. Any Ag deal will require major concessions from the US, with President Trump signaling that he could remove the threat of auto tariffs in exchange. The President is hoping for a deal when he travels to Japan in late May.

INDIA Seeks Extension on GSP Determination

India’s participation in the GSP program which allows developing countries to export goods to the US duty-free is set to end May 4. India has requested a 90-day extension to allow for its election period to close on May 19. Some House members are pressuring the administration to reconsider terminating the program.

Miscellaneous Trade Actions:

  • Commerce announced the initiation of new antidumping and countervailing duty investigations into ceramic tile from China.
  • Commerce imposed countervailing duties on yarn from India and China.
  • Commerce is set to issue antidumping and countervailing duty orders on imports of laminated woven slacks from Vietnam.