Mara Lee

Despite repeated lobbying trips from Commerce Secretary Wilbur Ross, the Senate passed a version of the defense authorization bill June 18 that includes an amendment designed to retain the seven-year export ban on Chinese telecommunications equipment manufacturer ZTE. However, the way the amendment is written, the Commerce Department would retain the discretion to allow ZTE to continue importing semiconductors from U.S. sources.

Nearly 60 trade groups asked Congress to hold hearings on the president's use of tariffs and quotas on allies, and to consider "whether amendments to existing delegations of authority are necessary to clarify Congress’ important role in the execution of the nation’s trade policy." The letter, sent June 18, also praised Senate Finance Committee Chairman Orrin Hatch, R-Utah, for scheduling such a hearing for June 20.

Most of the computer, aviation and automotive, electrical and machinery products that will be hit by tariffs under Section 301 are produced by foreign companies operating in China, according to an updated study from the Peterson Institute for International Economics. The think tank says it aims to do "truth telling about the benefits of globalization" as well as study labor market adjustment due to globalization and how to find a sustainable growth model for mature economies.

China will implement retaliatory 25 percent tariffs on 545 tariff lines, largely agricultural and auto targets, but also "aquatic products," on July 6, it said in a statement. Like the U.S., it is saving an additional $16 billion in targets in reserve. For China, those will be chemicals, energy imports and medical equipment. For the U.S., semiconductors, plastics, railcars, tractors, cranes and new industrial machinery lines could be in the second phase. China's tariffs are in response to the Section 301 tariffs on imports into the U.S. set to begin July 6 (see 1806150003)

The U.S. will begin collecting an additional 25 percent in tariffs on 818 lines of the original 1,333 tariff lines proposed in April, the Office of the U.S. Trade Representative announced June 15. The tariffs will take effect July 6. Televisions, one of the most significant consumer products on the original list, are no longer facing tariffs.

The entire congressional delegation from Washington state sent a letter to the U.S. trade representative, asking him to negotiate a solution with countries facing Section 232 steel and aluminum tariffs, because retaliatory tariffs on apples, cherries, pears and potatoes will cost the state's farmers tens of millions of dollars. The letter talks about cherry sales in China, apple sales in India, China and Mexico, and notes, "With cherry harvest beginning in the Pacific Northwest, time is of the essence for our growers."

An amendment that would stop the deal to lift an export ban on Chinese telecom equipment maker ZTE is expected to pass the Senate June 18 as part of the defense authorization bill. Since the House of Representatives did not include such an amendment in its version, passed in May, conference committee members would have to agree to include it in the final version. House Speaker Paul Ryan, who will not serve on the committee, said he doesn't know what position the House negotiators will take. "I'm going to leave it to our conferees," he said at a press conference at the Capitol June 14.

The House of Representatives on June 13 passed the Stop Illicit Drug Importation Act, which adds to the Food and Drug Administration's authority to detain, refuse and destroy imported drugs. The legislation says the provisions would not apply if "an electronic import entry for such article is submitted using an authorized electronic data interchange system" and if "such article is designated in such system as a drug, device, dietary supplement, or other product" in the Federal Food, Drug, and Cosmetic Act.

Citing the inflationary effect of antidumping and countervailing duties on softwood lumber, Reps. Kenny Marchant, R-Texas, and Brian Higgins, D-N.Y., led a letter asking that the administration reopen discussions with Canada, with the goal of reaching a negotiated agreement on softwood lumber imports. The two countries operated under the most recent agreement from 2006 to 2015. Canadians have said they're willing to agree to a new agreement with an export cap, but, if demand is high, a mechanism to lift the cap (see 1708240031). The June 12 letter to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer said the antidumping and countervailing duties strain the relationship with one of the country's closest allies and cause "unnecessary cost increases" for home builders. In a press release announcing the letter, Marchant cites a National Association of Home Builders estimate that the duties add $7,000 to the cost of building a new house.

An amendment aimed at requiring a vote from Congress before Section 232 tariffs can be imposed was blocked in the Senate on June 12. Sen. Bob Corker , R-Tenn., said he understood that all the powers in the Senate were arrayed against his effort receiving a vote. His proposal would have not only required that Congress approve any tariffs against auto parts and autos based on national security grounds, but also would have been retroactive, so that Congress could have rolled back the 232 tariffs on steel and aluminum (see 1806060018). The amendment was blocked on a procedural technicality -- that bills that affect revenue must start in the House of Representatives -- but Corker said on the floor of the Senate it was clear that wasn't the true reason. He said that Republican senators were fearful of upsetting the president. He said what he's been told since he proposed attaching his amendment to the defense authorization bill was: "Don't poke the bear!"