A House Ways and Means Trade Subcommittee hearing on the effects of tariffs on rural communities has been scheduled for July 18, subcommittee chairman Rep. Dave Reichert, R-Wash., announced. "Farmers, growers, and ranchers in my home state of Washington and around the country are significantly hurt because products that they are forced to import to stay competitive -- such as agriculture equipment, chemicals, steel, and aluminum -- are now prohibitively expensive," he said. "Adding insult to injury, these same farmers, growers, and ranchers are experiencing severe retaliation through prohibitive tariffs and other measures by their major customers including China, Canada, Mexico, and the EU." No witnesses have been announced. Democrats on House Ways and Means have been pressing for months for administration officials to testify on various trade strategies, including NAFTA renegotiations and China (see 1807110024).
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
The three Republican lawmakers from South Dakota told President Donald Trump his trade policy could put many agriculture producers on the brink of collapse. While agriculture contributes only about 1 percent of GDP nationally, it's 10 percent of South Dakota's gross state product, according to South Dakota State University. "Recent market uncertainty has already cost South Dakota producers hundreds of millions of dollars, and the delegation hopes this letter serves as a reminder to the president that this industry cannot afford to be further entangled in global trade disputes," a press release on Sen. John Thune's website said. Thune is in the Republican Senate leadership. The three's letter to Trump, dated July 11, also said, "Although you have stated that the agriculture sector will be taken care of through some form of USDA assistance, please keep in mind that U.S. export market share is diminishing daily at an alarming rate, and history has proven that once lost, export markets can take years, even decades to recapture."
A bipartisan bill that would require congressional approval before tariffs are imposed on national security grounds was introduced in the House of Representatives July 11. Like the so-far-unsuccessful efforts of Sen. Bob Corker, R-Tenn., the bill would be retroactive. The Section 232 tariffs and quotas on aluminum and steel would be rolled back after passage, and approval of those actions would be needed before they could resume.
Some leaders on the House Foreign Affairs Committee intend to file legislation to remove China's Most Favored Nation status, according to Rep. Ted Poe, R-Texas, chairman of the Subcommittee on Terrorism, Nonproliferation, and Trade. Poe said in a July 11 interview that Asia Subcommittee Chairman Ted Yoho and the ranking member on both subcommittees are all in agreement on the legislation. China has had MFN status with the U.S. since 1980, but that was made permanent only in 2001. In 1990, in the wake of the Tiananmen Square massacre, Congress included non-binding language suggesting the president rethink MFN for China.
Mexico's President Elect Andres Manuel Lopez Obrador would prefer getting a new NAFTA concluded before he takes office December 1, observers said, but he has most of the same deal-breakers as the current Mexican negotiators. How Lopez Obrador's election will affect NAFTA was one of the focuses of an Atlantic Council panel that met July 12 in Washington. Paula Stern, a former chairwoman of the International Trade Commission, said while the ministers from Mexico and Canada are slated to meet with US Trade Representative Robert Lighthizer in late July, "I do not think there's going to be a lot of movement."
It's only a "baby step" toward sparing Canada, Mexico and the European Union from steel and aluminum tariffs, as Sen. Bob Corker, R-Tenn., said, but 88 senators issued a rebuke of how the president has justified steel and aluminum tariffs under the guise of national security. Eleven senators -- all Republicans -- voted no, including both senators from Idaho, Wyoming and South Carolina. The last state could be badly damaged if President Donald Trump levies tariffs on imported auto parts under the same national security justification. Corker's home state of Tennessee also would be vulnerable if an auto parts tariff is implemented.
Canada's foreign ministry said July 10 that it welcomes the Department of Commerce's decision to revoke countervailing duties on Canadian supercalendered paper, as announced by U.S. Trade Representative Robert Lighthizer on July 6. The World Trade Organization circulated a panel report a day earlier that said the U.S. was not following international trade law in the way it had calculated the duties.
The U.S. Trade Representative is proposing an additional 10 percent tariff on 6,031 8-digit tariff lines -- about $200 billion worth of imports. Those who wish to testify for or against the inclusion of an item on the list must file by July 27, and written comments are due by August 17. Hearings will be held August 20-23. Senior government officials said a decision on tariffs will be made sometime after August 30.
Large-scale agriculture is one of America's competitive advantages, and farm exports are one of the top targets for tariffs in China, the European Union, Mexico and Canada. But Rob Johansson, chief economist at the U.S. Department of Agriculture, said even though tariffs are high enough to disrupt sales, "at least in terms of short-run effects, you could see trade increasing." Johansson explained: "Markets will find a way." As China buys more soybeans from South American countries, such as Argentina and Brazil, U.S. soybeans will go to the markets Brazil and Argentina had been selling to. He said agriculture economists will be watching to see which tariffs are high enough to keep a product out of the market. Johansson was one of the experts discussing the Organisation for Economic Co-operation and Development (OECD)-United Nations Food and Agriculture Organization's 10-year agricultural outlook at a program in Washington on July 10.
The Philippine government said that the late May meeting between Deputy U.S. Trade Representative Jeffrey Gerrish and senior Philippine economic ministers and senators was laying the groundwork for the "scope, timing and process" that could lead to a free trade agreement between the two countries. A statement from the Philippine government released July 9 said the May talks "centered on America’s interest in initiating 'informal preparatory meetings'" that could be the beginning of FTA negotiations.