The Commerce Department will launch a Section 232 investigation that could result in tariffs, quotas or other import restrictions on titanium sponge, it said in a March 4 press release. Requested by Titanium Metals Corporation (TIMET) in a petition filed in September 2018, the investigation will examine “whether the quantity or circumstances of titanium sponge imports into the United States threaten to impair the national security,” Commerce said.
The new NAFTA will reverse outsourcing decisions in the auto industry, the U.S. Trade Representative's annual report on the trade agenda said, and one of the administration's top priorities for 2019 is to get Congress to ratify it. The report, which spends 26 pages on this year's agenda and the rest laying out the status of current free trade agreements, negotiations and enforcement actions during 2018, was released late March 1. Generally, the report defended the administration's actions, arguing they're not protectionist but rather pro-worker, and noting that both imports and exports grew in high single digits during the first 11 months of 2018.
Just over 4,500 Section 301 exclusion requests have been denied by the Office of the U.S. Trade Representative, according to an update published late Feb. 28. There have been 985 exclusion requests granted, covering 21 tariff lines. The largest number of the granted requests were for plastic injection molds, three types of radial bearings, linear-acting hydraulic motors and water coolers. This is much larger than the last update, published Dec. 21, 2018, when fewer than 25 had been granted (see 1812240010).
Agriculture Secretary Sonny Perdue told the House Agriculture Committee that a failure to ratify the NAFTA replacement "would be devastating," and he said he hopes all House members understand how damaging that would be to the agricultural economy. Perdue said there's a lot of energy and momentum among the groups lobbying for passage, but acknowledged that "the trickiness of the [Section] 232s" makes it more difficult to get the deal through. Because of the Section 232 tariffs on steel and aluminum, Mexico and Canada are levying tariffs on U.S. pork, cheese and other agricultural products.
Although the main topic of the hearing was China, U.S. Trade Representative Robert Lighthizer told House Ways and Means Committee members repeatedly Feb. 27 that if they don't ratify the U.S.-Mexico-Canada Agreement, there will be no trade agenda for the next several years. "If we don’t pass USMCA, it says we don’t have a consensus," he said. Lighthizer also said: "It’s clearly better than its predecessor, it’s no question. Millions and millions of people are affected [by NAFTA]. You just have to pass it."
U.S. Trade Representative Robert Lighthizer, who is leading the China trade talks, downplayed the possibility that President Donald Trump and Chinese President Xi Jinping will sign a trade agreement a month from now. Lighthizer, who testified before the House Ways and Means Committee Feb. 27, was asked by Chairman Richard Neal, D-Mass., if he sees a package coming in the next few weeks. "I’m not foolish enough to think there’s going to be one negotiation that’s going to change all the practices in China," Lighthizer replied. "At the end of this negotiation, if we’re successful, there'll be a signing." But that's the beginning of a long process to monitor China's compliance with what it promises to do.
Kentucky Gov. Matt Bevin says there shouldn't be steel and aluminum tariffs on Canadian products, but expressed confidence that the Trump administration will make the situation right eventually. Bevin is a Republican who leads a state that is third-highest in auto industry jobs as a proportion of the workforce. "I wish people would just have patience," he said at a Feb. 21 event sponsored by the Canadian American Business Council. He suggested the reason the tariffs are still in place is "there's a limited amount of bandwidth" at the Office of the U.S. Trade Representative, and they have "a limited amount of ability to fight all these fires at once."
Canada's Ambassador to the U.S. David MacNaughton said he thinks U.S. and Canadian negotiators will resolve Section 232 tariffs on steel and aluminum "in a short while," and then reiterated the prediction, saying it will be resolved soon. MacNaughton, who was speaking Feb. 21 at an event sponsored by the Canadian American Business Council, said getting the tariffs lifted "is No. 1, 2 and 3 on my agenda here."
Mexican Ambassador to the U.S. Martha Barcena said several Democrats in Congress have asked her about the exclusivity period for biologics in the new NAFTA -- a provision that is also not popular in the Mexican Senate. "We accepted this in the negotiation," she said. "We may not have a perfect agreement, but it is a good agreement." She added that since biologics are the future of prescription medicines, from a Mexican perspective, "the less time of protection, the better. In a way, it was one of the big concessions of Mexico." She said that those who are opposed to the biologics provision, because they believe it will make drugs more expensive for consumers, should ask Office of the U.S. Trade Representative officials if they are willing to change it.
U.S. Trade Representative Robert Lighthizer and Japan's Economic and Fiscal Policy Minister Toshimitsu Motegi are planning for meetings in April and May, with an aim of defining the scope of trade talks before President Donald Trump meets with Japanese Prime Minister Shinzo Abe in late May, according to a report in Nikkei Asian Review. "Tokyo believes that by starting trade talks in the spring it can dodge [Section 232 auto] tariffs for the time being. But there are concerns that Trump could play the tariff card nonetheless if Japan's approach fails to satisfy," the article said. A USTR spokeswoman said it has no announcement on the next meeting between Lighthizer and Motegi.