New European Commission President Ursula von der Leyen told a German wire service that she and President Donald Trump want an agreement that resolves issues “in a few weeks.” But she didn't say how comprehensive such an agreement would be.
Even though steel and aluminum tariffs have been in place since March 2018, the number of exclusion requests continues to grow, according to an updated analysis from the free market-oriented Mercatus Center at George Mason University. The new portal opened June 13, and from that time to Aug. 27, companies filed an average of 4,427 requests a month. Between Aug. 28 and Dec. 6, the monthly average was 7,190. Members of Congress have repeatedly criticized what they see as arbitrary decisions, the fact that each exclusion is limited to the requestor, and the influence of domestic steel and aluminum producers on Commerce decisions (see 1910170066 and 1910300058).
The volume of imports from China fell about 20 percent across the fourth quarter, Flexport executives noted during a webinar Jan. 21 -- which represents both shifting to other categories of goods and re-orienting supply chains. Ryan Petersen, CEO of the freight forwarder, said 64 percent of its clients are paying additional tariffs because of the Trump administration policies.
The ideal of free trade has been imperiled by politicians' inaction in the face of harm by foreign competition, said panelists at a Davos forum on free trade. Roberto Azevedo, director-general of the World Trade Organization, said that free trade is associated with economic growth -- but prosperity also increases the gap between rich and poor. When disparities grow, he said, the answer is not to grow, but to avoid inequality. “The problem is governments are often MIA. They are missing in action. They are seeing inequalities grow, and they do nothing about it,” he said, until there is political upheaval. He said politicians don't consider the economic realities as much as the desire of voters. “An easy answer in the age of disruption is to blame the foreign,” he said. “Imports is an easy target, so why not?”
An effort by U.S. Trade Representative Robert Lighthizer to appease the Florida and Georgia delegations over seasonality not making it into the new NAFTA has angered the Arizona delegation. Arizona's two senators, Martha McSally, a Republican, and Kyrsten Sinema, a Democrat, each sent a letter to U.S. Trade Representative Robert Lighthizer last week, after they heard about his early January letters on a plan (see 2001130035) to see if there are ways to remedy harms from unfair imports of fruits or vegetables. “I am extremely disappointed that you have promised my Colleagues in the Southeast a plan that masquerades as fairness for U.S. farmers but instead raises the specter of future trade conflicts that will harm businesses in my state,” McSally wrote.
President Donald Trump, speaking at a press conference in Davos, Switzerland, Jan. 22, said he'll be talking with World Trade Organization Director-General Roberto Azevedo in Washington on “a whole new structure” for the WTO. “Roberto and I ... are going to do something that I think will be very dramatic,“ he said. Trump said Azevedo and others in his delegation will come to Washington “sometime next week or the week after, and we'll start working on it.”
Congress passed a law in December that gave the Commerce Department a deadline of Jan. 19 to release its report on the national security threat of imported autos and auto parts. On Jan. 21, Commerce told Congress it would not do so. Sen. Pat Toomey, the Pennsylvania Republican who sponsored the provision in the annual spending bill, responded that “the Department of Commerce is willfully violating federal law. This is unacceptable, and my staff and I are evaluating the potential for corrective action to compel the rightful release of this report.”
Tariffs on French champagne, cheeses, handbags and other products (see 2001060040) will not be coming, several news outlets are reporting, since France has agreed not to impose a Digital Services Tax in 2020 as negotiations continue at the Organization for Economic Co-Operation and Development on a fair way to impose income taxes on companies such as Google and Amazon.
An expert panel evaluating the changes associated with the labor chapter under the U.S.-Mexico-Canada Agreement say that there are a lot of unknown details on the rapid response mechanism to enforce complaints about collective bargaining in Mexico. The panel spoke at the Washington International Trade Association on Jan. 16.
The tariffs on billions of dollars worth of European goods because the World Trade Organization found the EU illegally subsidized Airbus puts Europe in a position where it will need to take similar action, assuming the WTO rules that state tax credits for Boeing also distorted trade. “This is where I don't want to be,” European Union Commissioner Phil Hogan said during a press roundtable with reporters late Jan. 16.