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This Week in Global Trade, Transportation & Logistics: May 31

May 31, 2019

US-MEXICO Tariffs

President Trump announced on Thursday that the US will impose 5 percent tariffs on all goods from Mexico beginning on June 10 and gradually increase them until the “illegal immigration” problem is fixed. Last year, US companies imported $346.5 billion in goods to the US, from vehicles to fruits and vegetables. The tariffs facing these importers would increase to 10 percent on July 1 and then an additional 5 percent on the first day of each month for three months. The tariffs would stay at 25 percent “until Mexico substantially stops the illegal inflow of aliens coming through its territory,” according to a statement from the President. Mexican representatives threatened that the country would respond “strongly” to these “disastrous” tariffs.

USMCA Progress

Both Canada and the US took steps this week towards passage of the USMCA. Canada’s government on Monday introduced a procedural motion to start consideration of the USMCA in its House of Commons. VP Pence then traveled to Ottawa where he met with Prime Minister Trudeau to discuss the next steps in advancing the trade agreement.

In the US on Thursday, the USTR sent lawmakers a draft statement of administrative action on the USMCA, starting the 30-day clock allowing for the submission of final implementing legislation to Capitol Hill. Speaker Pelosi pushed back on this move as Democrats are waiting to see how Mexico implements its recently passed labor reform law before Congress considers the USMCA.

US-CHINA

China announced this week that it is considering using rare earths as leverage in its ongoing trade war with the US. China is the leading exporter of rare earth minerals to the US, such as cerium oxide, bastnasite, neodymium oxide and lanthanum carbonate.

US-JAPAN FTA?

President Trump on Monday wrapped up a four-day trip to Japan where trade was a central topic of discussion. Japanese Prime Minister Shinzo Abe indicated that the US and Japan will speed up trade talks as Tokyo faces increased pressure to reach a deal in the next six months to avoid auto tariffs. The US is looking to increase agricultural exports to Japan, particularly beef. Trump says a deal could be announced in August, but neither side confirmed an official timeline.

Miscellaneous Trade Actions:

  • The Commerce Department initiated new anti-dumping and countervailing duty investigations of quartz surface products from India and Turkey.
  • Steel kegs from China, Mexico, and Germany were hit with antidumping duties.