China asked the U.S. to clarify how it defines “foreign adversaries” named in the May executive order that bans the use of some bulk power equipment and parts from foreign adversaries (see 2005040040). It suggested, during a June 10 World Trade Organization meeting, that the U.S. could be abusing the national security exception to the WTO rules. The U.S. replied that because the restriction pertains to national security, it should not be open to discussion at all, according to a Geneva trade official.
The second round of comment collections on retaliatory tariffs in the Airbus agreement should be free-form, as the first set was, the National Association of Beverage Importers said in June 9 comments to the Office of the U.S. Trade Representative. The trade group said the fact that almost 26,000 comments were submitted in the last round shows strong public interest, and the pull-down menus in the online form that the USTR has offered is confusing. “The form portal approach does not minimize the burden on the public; rather, it reduces the review burden on USTR. The latter is not the goal of the Paperwork Reduction Act,” NABI President Robert Tobiassen said. The association “respectfully requests that the existing process is maintained as it is, and that this emergency information collection request be approved only as a non-mandatory option for those who are willing and able to provide the information in the format USTR is seeking to receive,” it said. The USTR requested comments about the coming portal changes last month (see 2005260026).
Rep. Suzan DelBene, a House Ways and Means Committee member who also leads on trade in the New Democrats, said she's worried that the participation of “so many countries” at the World Trade Organization in e-commerce talks -- including China -- will mean that the result will not be a high-standard agreement.
Germany is benefiting from both its use of partial unemployment and its handling of the COVID-19 pandemic, and manufacturers in electronics, machinery and equipment and the auto sector are back to pre-crisis levels, according to Ludovic Subran, chief economist of Allianz. Subran, who was speaking on a June 9 webinar on globalization hosted by the American Institute for Contemporary German Studies at Johns Hopkins University, said German firms will have an edge over those in other countries that didn't keep workers employed during the shutdown measures taken to control the spread of the novel coronavirus that causes COVID-19.
The Aluminum Extruders Council pointed to the closure of Alcoa's Intalco Works in Ferndale, Washington, as proof that Section 232 is not helping the aluminum industry, and said that since there is no longer a source of domestic billets west of the Mississippi River, they have to import. But both domestic and foreign supply of aluminum billets is more expensive than it would be in other countries, so domestic extruders are at a price disadvantage. Exporters circumvent Section 232 -- which covers aluminum extrusions -- by doing further fabricating of the extrusions and classifying them under a subheading not covered in Section 232, the group said. “The truth is, no one is going to build primary aluminum production in the U.S. with or without the 232,” the group said in a June 9 press release. “It is time for the Administration to re-examine its policy in this area. We applaud their goal. We really do. However, the path they have taken has been proven to be ineffective, and ultimately counterproductive.”
The International Trade Commission is recommending that 2,632 petitions be included in a Miscellaneous Tariff Bill, and 805 petitions be rejected. Another 42 petitions were ineligible for a decision, either because they were incomplete, or because of the company that submitted them. The vast majority of products that will receive tariff reductions, if Congress passes the MTB, are chemicals, though more than 700 categories of machinery or tools are also covered; some consumer goods, such as shoes, coats, hats and belts, are also covered. Those goods, along with textiles for a U.S.-based mill, accounted for more than 500 petitions. The ITC has sent the preliminary report to Congress, it announced June 9. It's soliciting comments on the 805 rejections, starting June 12 at 8:45 a.m. and ending June 22 at 5:15 p.m., through an online portal.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said recent actions Mexico took to block the import of biotechnology and pesticides (see 2006040031) make him think the U.S. will have to start a state-to-state dispute as soon as the U.S.-Mexico-Canada Agreement takes effect. “USMCA follows the principle that that is the very foundation of our international agreements on trade, that everything should be science-based,” he said, in response to a question from International Trade Today. “And science shows that Mexico’s decision is a political decision and not a scientific decision.”
While the U.S.-Hong Kong Policy Act of 1992 gives the president clear authority to terminate Hong Kong's special status if China violates the island's autonomy, the fact that Hong Kong has its own membership in the World Trade Organization could complicate the matter, the Congressional Research Service says. In a June 5 “legal sidebar,” CRS said that not only is it not clear when the administration would end Hong Kong's special trade status, it's also not clear whether the U.S. would say it no longer acknowledges Hong Kong's membership in the WTO.
Disruptions to supply chains in the last year started with tariffs and moved to a public health pandemic, and the solutions to those problems are largely different, a panel convened by the Council on Foreign Relations said. For a pandemic, you might want a combination of stockpiling medical supplies, carrying more intermediate goods inventory for other sectors, and using multiple sources for components. For tariffs, you want to add other sources outside China, possibly leave China, and concentrate more on North American supply chains.
An interim final rule explaining how the Department of Labor will certify how much of a vehicle's production came from workers making at least $16 an hour has been sent to the Office and Management and Budget for review, the final step before issuance. The Office of Information and Regulatory Affairs at OMB received the rule on June 1.