Three dozen witnesses are scheduled to testify Jan. 7 on the appropriateness of levying tariffs on French handbags, makeup, champagne, enamel cookware, cheese, butter and yogurt in retaliation for a proposed digital services tax -- and some of the organizations that represent the companies that would be most affected by the tax are not asking for tariffs. In fact, only the National Milk Producers Federation, the Computer & Communications Industry Association and Baker McKenzie say that the Office of the U.S. Trade Representative should use tariffs to pressure France to abandon a DST.
President Donald Trump tweeted that he will sign “our very large and comprehensive Phase One Trade Deal with China on January 15” at the White House. "High level representatives of China will be present" and Trump is planning to go to Beijing "at a later date" to begin talks around Phase Two, he said. An administration official previously said the signing would be done between the U.S. trade representative and China's vice premier, and would happen in the first week of January (see 1912130035).
Japanese beef exporters will be able to send more beef to the U.S. at a lower tariff rate in 2020, as Japan's tariff-rate quota will be part of the total TRQ allocation, according to a White House proclamation released Dec. 27. However, Japan is a trivial source of imported beef in America; the top six exporters -- Canada, Australia, Mexico, New Zealand, Nicaragua and Brazil -- account for 95 percent of imports.
Even though the U.S.-Mexico-Canada Agreement has not finished its ratification path through Canada and the U.S. Senate, industry is already looking to how CBP will make the changes a reality, perhaps as early as May 2020. “This is going to move out of the Beltway political sphere and really get into the practical, everyday pain in the neck, painstaking trade world,” said Dan Ujczo, a partner at Dickinson Wright and a customs and trade lawyer who specializes in North American trade. A CBP official said last month that agency discussions for how to implement some USMCA provisions are underway (see 1911070015).
The U.S. delegation to the World Trade Organization rejected a proposal from countries on how to reform the appellate body (see 1912090031), saying that without understanding how the appellate body's overreach problem developed, there's no reason to believe that restating the constraints on the appellate body's authority will work. In December, when the appellate body ceased to exist because of U.S. refusal to allow new appointees, the National Foreign Trade Council hired Tailwinds Global Strategy's Bruce Hirsh to put forward ideas of how to resolve the impasse
President Donald Trump signed the bills funding the federal government through Sept. 30, along with a tax extenders package, before leaving Washington for Florida the evening of Dec. 20. The tax extenders included a provision that will continue the alcohol excise tax break in the Craft Beverage Modernization Act through the end of 2020 (see 1912170067). The Beer Institute hailed the extension with a press release that quoted Dan Kopman, CEO of Heavy Seas Beer in Baltimore, Maryland. “Excise tax relief has given brewers and beer importers of all sizes across the nation the ability to expand and grow, and I urge members of Congress to work together in the new year to make the excise tax rates in the Craft Beverage Modernization and Tax Reform Act permanent.”
Brazil's President Jair Bolsonaro said, after a phone call with President Donald Trump Dec. 20, that Brazil will not face tariffs instead of quotas on its steel exports to the United States. Trump had tweeted in early December that the change would come “immediately,” but no Federal Register notice ever put the tweet into action (see 1912020036). He had said at the time that currency devaluation in Brazil and Argentina was “very unfair” to farmers and manufacturers. Argentina and Brazil have taken commodity market share from the U.S. in China, after China imposed tariffs on U.S. products.
The Office of the U.S. Trade Representative will ask for comments on whether the second set of tariff exclusions on Chinese imports on Section 301 List 1, set to expire March 25, should last another year, it said in a pre-publication notice on its website. The agency will start accepting comments on the extensions in docket number USTR-2019-0024 on Jan. 15. The comments are due by Feb. 15, it said. The USTR recently granted extensions to six exclusions, while letting 25 expire, from the first group of exclusions (see 1912190060).
A bipartisan group of 161 House members are asking U.S. Trade Representative Robert Lighthizer to open negotiations for a free trade deal with Taiwan. The letter, sent Dec. 19, was led by Rep. Steve Chabot, R-Ohio, Rep. Albio Sires, D-N.J., Rep. Mario Diaz-Balart, R-Fla., and Rep. Gerry Connolly, D-Va. “Taiwan is a longstanding ally and a like-minded partner in the Indo-Pacific region that upholds and shares our values. Taiwan is our 11th largest trading partner worldwide, the 8th largest export market for U.S. agricultural products, a major purchaser of U.S. LNG exports, and the supplier of a significant amount of the semiconductors used by our manufacturers in their finished goods,” they said. “As the trade and investment relationship with Taiwan already supports an estimated 373,000 U.S. jobs, working toward the negotiation of a high-standard and comprehensive U.S.-Taiwan bilateral trade agreement would further enhance our shared goal of enhancing the global competitiveness of U.S. industries while spurring American job creation.”
Sen. Pat Toomey, R-Pa., the strongest free trade advocate in the Senate, said he doesn't know if Republicans will return to their traditional position as pro-free trade. In response to a question from the audience at the American Enterprise Institute Dec. 19, he said it depends on whether President Donald Trump is re-elected in 2020.