Republicans who are in the China package negotiations say that Senate Minority Leader Mitch McConnell's tweet that said that moving even a smaller Build Back Better bill would halt negotiations was not an empty threat. He had said that while Congress was away from Washington, at the beginning of the month (see 2207010039).
The solar safeguard agreement that Canada and the U.S. agreed to will only exempt Canadian-originating cells or panels, and it may start collecting safeguard deposits again if there is a surge in imports of panels or cells that the International Trade Commission agrees is undermining the effectiveness of the solar safeguard measure.
Mexico's Undersecretary for Foreign Trade Luz Maria de la Mora said that Mexico is working to complete the goals of the trade facilitation chapter in USMCA, so that with transparency and information sharing, even small businesses can access expedited release. De la Mora, who spoke in Spanish during a press conference in Vancouver, Canada, also attended by U.S. Trade Representative Katherine Tai and Canada's trade minister. She said that all three countries have the goal of secure borders, but also borders that allow businesses to be competitive.
An advocacy group for the Generalized System of Preferences benefits program showed that purchases of 25 products that were once covered by GSP have shifted back to China since the program's expiration.
Canada, which had exported more than $133 million worth of solar panels in 2017 before its exports were hit with the global safeguard, will no longer be subject to the 14.75% tariff on panels. The change was announced July 7, while U.S. Trade Representative Katherine Tai was visiting Canada for the USMCA Free Trade Commission; the memorandum of understanding marking the change will be signed July 8. Tai said the agreement "contains a mechanism to ensure that solar product imports from Canada do not undermine the existing U.S. safeguard measure on imports of solar products," and also commits Canada to prohibiting the import of solar module components made in whole or in part with forced or compulsory labor.
Five Republican senators, only one of whom voted for the U.S. Innovation and Competition Act (USICA), are asking that Senate conferees drop the directive to reopen a Section 301 exclusion process, and add a number of trade provisions only found in the House China package. Some House proposals that Sen. Mike Braun, R-Ind., Sen. Dan Sullivan, R-Ala., Sen. Kevin Cramer, R-N.D., and Florida's two senators, Rick Scott and Marco Rubio, both Republicans, want to include:
The North American auto industry is waiting with baited breath for the panel decision on the interpretation of the auto rules of origin, and for the additional guidance from CBP to the auto industry, according to Dan Ujczo, a USMCA maven with clients in the auto industry. Ujczo, a senior counsel at Thompson Hine, said in a July 6 phone interview that one of the areas where importers need clarity is in how steel in vehicles can be certified as North American before the melted and poured standard arrives in 2027.
Emissions-intensive, trade-exposed goods such as cement, paper, glass, steel and chemicals are likely to be those facing carbon border adjustment taxes, according to a recent Congressional Research Service report about both the possibility of the taxes going into effect in Canada and the EU and what Congress would need to consider if it wanted to pass its own version.
A report to Congress designed to reveal whether a stricter auto rules of origin in USMCA is effective says no conclusions can be drawn because of the effects of the pandemic and ensuing semiconductor shortage that has reduced production of automobiles worldwide. The auto industry told the Office of the U.S. Trade Representative that the semiconductor shortage meant 1,520,000 fewer vehicles were built in 2021, and that this year, they expected one million fewer vehicles to be built, because the shortages have not yet been resolved.
Treasury Secretary Janet Yellen, one of the most public voices for rolling back some of the Section 301 tariffs on Chinese goods to ease inflation, spoke with Chinese Vice Premier Liu He, the main trade contact, about "unfair, non-market [Chinese] economic practices," according to a readout of the July 4 call.