Commerce Secretary Says 'Reasonable Chance' EU Will Avoid Section 232 Tariffs
Commerce Secretary Wilbur Ross, referring to press reports that the European Union may accept quotas on steel exports, told Senate appropriators on May 10, "I think there's a reasonable chance we'll work something out," while testifying about his department's budget. Ross also suggested Canada and Mexico should not be subject to quotas. Ross is handling the EU tariff exemption, but U.S. Trade Representative Robert Lighthizer is handling Mexico and Canada as part of the NAFTA renegotiation. Canada and Mexico import nearly as much steel from the U.S. as they sell here, Ross said. "We literally don't have enough aluminum production in our country without the support of Canada," Ross said. "They have not been dumping." He said that Canada's low cost of aluminum production is because of inexpensive energy inputs.
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Most of the questions on trade policy were unrelated to the budget, but the one place the issues intersect is at the Bureau of Industry and Security. BIS is responsible for steel and aluminum product exclusion determinations, and Ross said that of approximately 8,700 requests, about 2,200 have not been posted yet. Commerce needs Congress to approve an internal transfer of funds at Commerce of $3.3.million to hire 15 subcontractors to deal with the surge of requests, he said. The administration also asked for an additional $4.1 million for BIS in the coming fiscal year, to hire 13 staffers and subcontractors as well. The House Appropriations Committee did not give BIS extra funding in the fiscal year 2019 bill it passed out of committee on May 9.
Sen.James Lankford, R-Okla., asked Ross whether any product exclusions have been approved. Ross replied that "you'll be starting to see approvals and denials come out." He also noted that one company submitted 1,167 product exclusion requests. "We'll see how warranted they are," he said.
Lankford questioned the decision to start tariff refunds at the date of posting, rather than at the start of the tariff collection, or the date of submission. Ross said the department felt there would be no incentive to fill out the paperwork completely and correctly the first time if refunds were pegged to date of submission. He said, "We felt this was the best balance of needs of respondents and needs" of CBP.
Ross repeated his take on the China negotiations he'd shared with international diplomats earlier in the week -- that the two sides are far apart, but they are engaging deeply (see 1805090013). He said the U.S. asked China to buy certain products in certain quantities. The administration wants to reduce the trade deficit with China by $200 million in two years. "The Chinese responded in kind," he said. He also said, "I am hopeful that we will make some further progress with them" when China's vice premier comes to Washington. He is expected to arrive next week.
Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies Chairman Sen. Jerry Moran, R-Kan., said he has "serious significant concerns" that Kansas farmers, aircraft manufacturers and auto parts makers will be punished by China because of U.S. trade enforcement actions. Ross replied: "We are all well aware that it's ... unfair for one industry to bear the brunt of retaliation in our efforts to help other parts of the economy." He said the agriculture secretary is tasked with mitigating the damage.