Mara Lee

Supply chain professionals and trade group executives praised the progress U.S. government agencies have made in trade facilitation, and pointed to areas where they could still make progress, during the Global Supply Chain Summit hosted by the U.S. Chamber of Commerce on May 22. The Unified Cargo Processing pilot, which is soon expanding from seven ports of entry to nine (see 1803300020), has reduced crossing time by up to 75 percent, according to Lance Jungmeyer, president of the Fresh Produce Association of the Americas. He also talked about how private industry can help CBP be more business friendly, such as with private dollars helping to fund a 3.5-mile shortcut from the Mariposa port of entry in Nogales, Arizona, to the highway. He said they're lobbying CBP to set up a donations acceptance program to build a cold storage inspection facility at a port of entry, too. He said his group would also like to see Canada try unified cargo processing with CBP.

The Trump administration's decision to stop the implementation of Section 301 tariffs while the U.S. and China formalize a deal has left many wondering which country is coming out ahead. China economics expert Derek Scissors, an American Enterprise Institute scholar who briefly advised the Trump administration on the Section 301 investigation, thinks it's too early to say. "I didn’t think he would agree to a deal where we have nothing on the table. I’m shocked at that. I assume more is coming," he said. "Right now this is an IOU for a deal."

Now that it is seemingly too late for Congress to ratify a new NAFTA in December (see 1805110025), predictions about what happens next vary widely. Treasury Secretary Stephen Mnuchin said on CNBC that the administration could pursue a "skinny NAFTA," and a Republican senator suggested that would be the best course of action, though a full rewrite is still preferred, Mnuchin said.

China announced it will no longer collect 178.6 percent cash deposits on U.S. sorghum, because the antidumping case is not in the public interest. The Chinese Ministry of Commerce said on May 18 that continuing the duties would drive inflation for consumers. Sorghum is mostly fed to livestock in China, as corn prices rise. The deposits are being returned, Bloomberg reported. China imported about $957 million of U.S. sorghum in 2017 and purchases were down 15 percent in the first quarter compared to a year earlier, Bloomberg reported, citing Customs data. Farmers had used the grain in animal feed in place of domestic corn, which climbed 20 percent last year.

On May 17, the supposed deadline for having a NAFTA deal ready so that Congress could vote on it in 2018, the U.S. Trade Representative said ratifying a deal this year is unlikely. Earlier that day Canada's Prime Minister Justin Trudeau, speaking in New York, said, "We're down to a point where there is a good deal on the table. Mexico has put proposals on the table that actually will go a long way towards reducing the trade deficit the U.S. has with Mexico, and indeed, bringing back some auto jobs from Mexico to the United States. It's right down to sort of the last conversations."

The European Union submitted to the World Trade Organization on May 18 the list of products it will impose 25 percent tariffs on if the U.S. does not spare it from steel and aluminum tariffs next month. The initial list, which runs to 181 items, is designed to counteract the tariffs on almost $7.2 billion worth of steel and aluminum that will be subject to duties from the United States under Section 232. Only 1.2 billion of that is aluminum. The EU could begin collecting tariffs on these items as soon as June 20. The list includes peanut butter, orange juice, cigarettes, steel, pipes, motorcycles and yachts.

Chinese drugmakers and device makers, U.S. device makers that import Chinese components, and the distributors who sell supplies to hospitals and government agencies all asked the Section 301 panel to spare the healthcare sector from 25 percent tariffs on Chinese imports. The testimony came on the last of three days of hearings by the Office of the U.S. Trade Representative as the panel works to refine a list of 1,300 tariffs on $50 billion worth of Chinese goods. Witnesses said these Chinese items do not necessarily follow China's industrial policy of forced tech transfer or its efforts to leapfrog into more advanced manufacturing. Linda Rouse O'Neill, vice president of government affairs for the Health Industry Distributors Association, said tariffs aren't just going to be an economic drag on the healthcare system. "It's really going to exacerbate product shortages," she said. "We already don't have enough personal protective equipment."

The Section 301 tariffs list should not be used to "pick winners and losers in the free market," the American Apparel and Footwear Association announced just after the National Council of Textile Organizations testified to a review panel that it wants clothing added to the tariff list. In 2017, the U.S. imported nearly $100 billion more in apparel and textiles than it exported, the NCTO said in its submission to the panel, and Chinese exports in these categories account for about 12 percent of the overall bilateral trade deficit. China's exports are responsible for the loss of hundreds of thousands of mill and garment factory jobs, they said, and "the remaining vestiges" of the apparel industry won't ask for antidumping investigations because they are held hostage by their customers, who import the bulk of what they sell, the submission said.

A bill that would require the postal service to get advance electronic information about international mail packages and share that with CBP passed out of the House Ways and Means Committee on May 16. Rep. Mike Bishop, R-Mich., and Trade Subcommittee ranking member Rep. Bill Pascrell, D-N.J., introduced the Securing the International Mail Against Opioids Act of 2018, H.R. 5788, on May 15. The committee considered the bill, which combines several pieces of legislation meant to fight opioid abuse, during a May 16 markup.

More than 1,000 of the 1,300 tariff lines on the list of products that could be affected by Section 301 tariffs would impact General Electric's operations, but the company is asking for just 34 items to be removed from the list. On May 16, during the second day of the International Trade Commission's public hearing to help it refine the list of products subject to 25 percent tariffs, Karan Bhatia, who leads GE's government affairs and policy office, suggested the committee exclude intra-company inputs from owned and controlled Chinese factories because those don't involve forced technology transfer, something the Section 301 tariffs are meant to address. He suggested items that have high U.S. content by value that come from China also should be excluded.