Mara Lee

Senate Majority Leader Mitch McConnell broke his silence on steel and aluminum tariffs, which have sparked strong reactions from Republicans in both chambers since the surprise announcement last week (see 1803010029). "There is a lot of concern among Republican senators that this could metastasize into a larger trade war, and many of our members are discussing with the administration just how broad, how sweeping this might be," he said at a news conference March 6. He noted that President Donald Trump has suggested an exemption for Canada and Mexico might be tied to concessions in NAFTA renegotiations. "From a Kentucky point of view, NAFTA's been a big one, we've benefited from it in every way," the senator from Kentucky added. McConnell said that if the tariffs create disruption, "it could send our economy in the wrong direction."

CBP needs more authority to combat counterfeiters, an agency executive told the Senate Finance Committee March 6. But Brenda Smith, executive assistant commissioner in the Office of Trade, said it would take a few months of consultation with the private sector to say exactly what's needed. Ranking member Ron Wyden, D-Ore., pressed Smith for a deadline, and when she demurred, asked her to report back within 60 days. "I will do my best," she responded.

President Donald Trump tweeted March 5 that he won't exempt Mexico and Canada from steel and aluminum tariffs unless the U.S. gets its way at the NAFTA negotiating table. The tweets came on the last day of round 7 of the NAFTA talks. "NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must treat our farmers much better. Highly restrictive. Mexico must do much more on stopping drugs from pouring into the U.S. They have not done what needs to be done. Millions of people addicted and dying," Trump wrote.

Canada's Foreign Minister Chrystia Freeland and Mexico's Economy Secretary Ildefonso Guajardo expressed optimism that their countries and the U.S. will be able to reach an agreement that can be sold to the public in all three countries, while U.S. Trade Representative Robert Lighthizer sounded a more cautionary note at a joint press conference at the end of the seventh round of negotiations in Mexico City. "I fear the longer we proceed the more political headwinds we will feel," Lighthizer said March 5.

Following President Trump's signaling of across the board tariffs on imported steel and aluminum (see 1803010029), exactly how Canadian steel fits in is among the major unanswered questions. Canada said in a March 1 statement that "as the number one customer of American steel, Canada would view any trade restrictions on Canadian steel and aluminum as absolutely unacceptable." The Defense Department has also said Canadian steel should not face Section 232 tariffs (see 1802230018).

The U.S. under previous administrations passively stuck with "outdated and underperforming trade deals and allowed international bureaucracies to undermine U.S. interests," the Office of the U.S. Trade Representative said. But now, "countries that refuse to give us reciprocal treatment or who engage in other unfair trading practices will find that we know how to defend our interests," USTR said. In a 359-page report to Congress on the trade agreements program released late on Feb. 28, USTR laid out its priorities for the coming year, and defended the ongoing NAFTA negotiations. By law, Congress must renew fast-track trade authority by June 1, or NAFTA 2.0 will not be able to proceed.

The U.S. will impose a 25 percent duty on all foreign steel and a 10 percent duty on imported aluminum, President Donald Trump announced March 1. "It'll be for a long period of time. We’ll be signing it next week. And you’ll have protection for a long time in a while. What's been allowed to go on for decades is disgraceful."

Withdrawing from the Trans-Pacific Partnership was bad enough, but what could come this year could be far worse, trade scholars said during a Brookings Institution panel reviewing "Trump's Trade Policy in Asia" on Feb. 28. Because President Donald Trump exited the TPP on the third day of his administration, the United States will not be able to lower barriers to beef or pork exports to Japan, and other countries that stayed in the agreement, such as Canada, will move into the gap, said Jeff Schott, a senior fellow on international trade policy at the Peterson Institute for International Economics.

All of the remedies proposed to protect the U.S. aluminum and steel industries are overly broad, and will destroy more jobs than they create, warns a letter sent to the Trump administration Feb. 27, signed by 25 trade groups. "We understand your goal of supporting these two important sectors of our domestic manufacturing base," said farmers, auto and engine manufacturers, metal parts makers, food processors, and oil and chemical industries.

The House Ways and Means Committee will consider whether all enforcement tools under the Trade Facilitation and Trade Enforcement Act are being used, the committee said in a letter outlining the year's priorities. It will also be addressing fiscal year 2019 budgets for the Office of the U.S. Trade Representative, CBP and the International Trade Commission in the coming months. In its "views and estimates" letter on the budget, the committee noted that it will be working closely with the Trump administration to modernize NAFTA and on U.S.-Korea Free Trade Agreement negotiations. Also, the committee will work with the administration "to determine appropriate partners for additional trade negotiations as well as negotiating priorities," the letter said. To be reviewed as well is the Synthetics Trafficking & Overdose Prevention (STOP) Act, which aims to end the importation of fentanyl and carfentanil through international mail.