Mara Lee

Twenty Republicans on the committee that handles trade in the House of Representatives wrote to President Donald Trump July 25, asking him to start negotiating directly with Chinese President Xi Jingping. Ways and Means Committee Chairman Kevin Brady, R-Texas, asked Trump to meet with Xi weeks ago (see 1807110024), and the letter uses the same kind of flattery for Trump's deal-making prowess that Brady has often repeated (see 1807170004). "We are confident that if you personally engage with President Xi, you would reinvigorate the negotiations and develop meaningful solutions that will establish free, fair, and lasting trade between the United States and China and improve the competitiveness of U.S. companies," the letter says. "To your credit, you have developed a strong personal relationship with President Xi."

U.S. Trade Representative Robert Lighthizer said the effort to get China to change its industrial policy and intellectual property practices will take years, but added that "that's not to say what we're doing now will be in place for years." Lighthizer was testifying July 26 to a Senate Appropriations subcommittee on the administration's trade policy, and was pressed again and again on how long tariffs will continue to increase costs on American businesses, and how long retaliatory tariffs will damage their ability to export.

Commerce Secretary Wilbur Ross pointed to the European Union's interest in working on a trade deal (see 1807250031) that addresses non-tariff barriers and some industrial tariffs as "a real vindication that the president’s trade policy is starting to work." Ross, who was speaking to reporters traveling with the president to Iowa July 26, said Donald Trump's approach is to make it painful for other countries to continue their trade stances.

President Donald Trump announced that the U.S. will "resolve the steel and aluminum issues" with the European Union after the EU agreed to buy more soybeans and liquefied natural gas, and to enter negotiations to drop non-auto industrial tariffs to zero. The EU's retaliatory tariffs will also be "resolved," said Trump.

The chemicals industry deserves to be spared from a $16 billion tranche of Section 301 tariffs, Ed Brzytwa, the director of international trade for the American Chemistry Council, said during a July 25 hearing on the tariffs. After testimony from more than a half-dozen businesses that import, manufacture or use imported chemical inputs, he explained that the U.S. chemicals industry has a cost advantage over China now because of cheap natural gas. Because China imports more than $5 billion a year in chemical compounds and plastics from the U.S., the industry's a natural target for retaliation. That -- paired with the fact that many chemical and plastic manufacturers need Chinese inputs -- means that putting chemicals on the list is doubly painful.

After four months, only 266 product exclusion requests have been granted, 421 were denied, and more than 26,000 are yet to be decided, House Ways and Means Trade Subcommittee Chairman Dave Reichert, R-Wash., said at a hearing on the Section 232 exclusion process. He called for numerous changes to the process in his opening statement.

The U.S. and the European Union will work together to eliminate bureaucratic barriers and to move all non-auto industrial tariffs to zero, President Donald Trump announced at a Rose Garden press conference July 25. Trump said the EU is going to work to buy more soybeans, services, chemicals, pharmaceuticals and LNG. "They're going to be a massive buyer," he said, referring to the liquefied natural gas.

Two Southern states senators introduced their bill on Section 232 tariffs while the president was talking to the European Union about threatened auto tariffs. The Automotive Jobs Act of 2018 requires the International Trade Commission "to conduct a comprehensive study of the well-being, health, and vitality of the United States automotive industry before tariffs could be applied." The bill is co-sponsored by Tennessee Republican Sen. Lamar Alexander and Sen. Doug Jones, D-Ala. Both have significant auto plants in their states.

The top Democrat on the House Ways and Means Committee's Subcommittee on Trade is trying to force the administration to disclose information about its decision-making process on tariffs. Rep. Bill Pascrell, D-N.J., would have to get the House Speaker to bring the resolution up for a vote, in addition to securing a majority vote. The resolution asks for documents, spreadsheets and slide presentations that explain why the president chose a global 25 percent tariff on steel after the Commerce Department gave a global 24 percent tariff as one option, and why he made the aluminum tariff 10 percent, rather than 7.7 percent, as laid out by Commerce. It also asks for information on how the administration intends to help exporters hurt in the trade war, and its strategy on resolving the problems laid out in the Section 301 report, either through multilateral action or through negotiations with China.

More than 20 businesses and trade groups -- the first set of more than 80 scheduled to testify -- told the Section 301 investigation panel on July 24 that including their imports on the tariff list of $16 billion in Chinese products will lead to higher consumer prices, lower profits, abandoned expansion plans or worse. For Jane Hardy, CEO of Brinly-Hardy Company in Kentucky, having Harmonized Tariff Schedule heading 8432.4200, fertilizer spreaders, added to the list is an existential threat. With the tariff on steel, her family-owned company, founded in 1839, began paying 25 percent to 37 percent more for the metal, even though she'd always bought domestic steel. Then, with the first tranche of Section 301, Chinese wheels and hardware that her Indiana factory uses as it builds equipment were taxed at 25 percent.