Mara Lee

President Donald Trump told reporters April 24 that he wishes he could make a trade deal just with France, because trade with the European Union "has been unfair for a long time," but that his Cabinet is negotiating with the EU around the Section 232 tariffs on steel and aluminum. On NAFTA, Trump said, "NAFTA as you know is moving along. We're doing very nicely with NAFTA. We could make a deal very quickly, but I'm not sure that's in the best interest of the United States. We'll see what happens."

Treasury Secretary Steve Mnuchin will lead a delegation to China in a few days to discuss trade issues, including potential Section 301 tariffs, President Donald Trump said during a press conference April 24. Mnuchin, joined by U.S. Trade Representative Robert Lighthizer, will discuss unfair intellectual property rights issues that led the U.S. to propose the 25 percent tariffs under Section 301. Tariffs will be levied "unless we make a trade deal. I think we've got a very good chance of making a deal," Trump said in a meeting earlier in the day.

The Aluminum Association, the largest trade group for the aluminum industry, asked President Donald Trump to grant permanent exemptions to the European Union, Canada, Mexico, Brazil, Australia and Argentina -- and said those agreements should not be used to create quotas for aluminum exports. The trade group sent a letter on April 24 noting that 97 percent of aluminum industry jobs are in mid- and downstream production, and most rely on at least some imported aluminum. "Quotas would paradoxically cause imports of semi-fabricated products from China to be more competitive in the U.S. market, as manufacturers scramble to find metal," the letter said.

Legislation in Mexico that critics said would undermine Mexico's new labor protections (see 1804190032) failed to pass, and unions are celebrating. AFL-CIO President Richard Trumka said working people stopped "legislation aimed at maintaining a rigged system that benefits corporations and the mega-rich," and said that there's a possibility a renegotiated NAFTA can bolster union organizing rights.

The U.S. -- supported by the European Union, Japan, Mexico and Canada -- asked the World Trade Organization's Committee on Subsidies and Countervailing Measures to examine below-market financing and debt forgiveness as a market distorting practice. The countries, speaking at a meeting in Geneva on April 24, said that counter-cyclical financing during recessions and later debt-to-equity conversions create "distortions in the domestic market that spill over into the international economy and distort international trade patterns." They suggested the WTO rules be amended to consider the subsidy as creating serious prejudice, which would allow other countries to use export displacement as an argument for countervailing duties, according to a paper they presented at the meeting.

The U.S. asked China to end its import restrictions on scrap and asked it to consider less trade-restrictive measures at the World Trade Organization. The European Union began the discussion about China's actions on recycled materials, and received support from five other countries critical of the practice. Countries that send scrap to China have been complaining at the WTO for months (see 1708220009), and although it did not end up banning waste imports, the restrictions it did impose are having "a huge impact on the global recycling chain," South Korean representatives said at the WTO on April 20. These restrictions are separate from the 25 percent tariff China is levying on U.S. aluminum scrap in retaliation for the Section 232 tariffs. The Institute of Scrap Recycling Industries says that the U.S. exported $2.34 billion in aluminum scrap in 2017, and about half of those exports went to China.

Business interests who depend on NAFTA are trying to piece together a strategy for how to handle changes under a new deal, but there are differing opinions on what will happen to car rules of origin. Trade lawyer Daniel Ujczo, who chairs the Canadian-U.S. trade practice at Dickinson Wright, said in an interview that the U.S. trade representative is looking for a 75 percent North American content on high value parts, such as the engine and transmission, but may allow lower percentages for other tiers of parts. But Ujczo said his understanding is that the lower hurdle for parts doesn't eliminate the top-line requirement that 85 percent of cars' value must come from NAFTA partner countries in order to qualify for duty-free status.

The American Association of Port Authorities urged the U.S. trade representative to consider the economic impact of tariffs before implementing them. "While AAPA does not comment on specific trade sanctions, prior to implementing any trade remedies or sanctions, we urge you to carefully consider the negative impacts these actions would have on port and other trade-related American jobs nationwide, including the effects of likely retaliatory responses from our trading partners," the trade group wrote to Robert Lighthizer on April 19.

The Commerce Department has not been able to keep up with the flood of product exclusion submissions -- the steel exclusion requests numbered 3,979 as of April 19, but just 120 have been posted for comments. For aluminum, there have been 396 exclusion requests, and 26 posted. No new filing has been posted since April 13 for aluminum, but the agency posted 44 steel product exclusion requests just on April 20th.

The way that companies can apply for product exclusions is procedurally unfair, and there are no mechanisms to prevent the product exclusion process from enabling anti-competitive advantages, Sens. Orrin Hatch and Ron Wyden wrote on April 19. Hatch, chairman of the Senate Finance Committee, and Wyden, ranking member, said that the application forms require "a minute level of detail," including the chemical compositions, dimensions, strength, toughness, ductility, magnetic permeability, surface finish and coatings of the products. Domestic manufacturers objecting to a request have to respond in similar detail.