Bold action from the administration to address the economic fallout of the COVID-19 response crisis is needed, the Business Roundtable said in a letter sent March 18 to the Trump administration. It asked for “immediate tariff relief through the duration of the global pandemic," among other things. "Tariff relief can support the public health response as well as economic recovery. As an immediate step, the U.S. government should suspend tariffs on all medical and health products and other supplies necessary for the public health response to the COVID-19 outbreak.” It suggested that the administration work to ensure expedited customs clearance authorities, unspecified regulatory flexibility and, possibly, more money for transportation and port infrastructure. It criticized buy local provisions for goods needed for the epidemic, as well as export controls on those goods, saying they exacerbate scarcity problems.
The language of the U.S.-Mexico-Canada Agreement says that in order for the treaty to take effect on June 1 -- as U.S. officials have told Congress they want -- the countries would have to agree that they're ready 12 days from now. Kenneth Smith Ramos, a former top negotiator of the NAFTA rewrite, said the three countries cannot say they've completed their internal procedures by then. “#NotHappening,” he wrote in English at the end of a tweet in Spanish.
Claims that NAFTA was ripped up or that it was just a rebranding are wrong and paying attention to the changes could mean big savings for businesses, said Dickinson Wright Cross-Border Practice Chair Dan Ujczo during a March 17 Global Chamber webinar. Ujczo said that one polymer and chemicals company he talked to saw that changes from NAFTA to the U.S.-Mexico-Canada Agreement “are going to save us $17 million.” He urged businesses that use NAFTA to convene their purchasing, accounting and either in-house customs teams or customs brokers to investigate their supply chains, because he predicted that CBP will pay closer attention to rules of origin, and he said many companies are relying on slapdash rules of origin certificates from suppliers (see 2002190028).
Rep. Rashida Tlaib, D-Mich., along with the Trade Subcommittee and Intelligence Committee chairmen, and others, plan to ask the director of national intelligence to publicly release what information it has on forced labor, whether in camps or in factories where Uighurs are threatened they will be returned to detention if they do not work -- “especially information related to the textile and cotton industries, and the names of organizations and institutions benefiting from forced labor,” she wrote.
President Donald Trump, asked about a letter from businesses and trade groups sent earlier on March 18 that said he should lift sections 232 and 301 tariffs, said he couldn't imagine why Americans would want that. “China is paying us billions and billions of dollars in tariffs and there’s no reason to do that,” reporters quoted him as saying at a press conference. "It could be that China will ask for a suspension or something. We’ll see what happens. China is having a very rough time.”
Treasury Secretary Steven Mnuchin hasn't talked specifically to cargo airlines' executives, though he said with regard to passenger airlines “I've had conversations around the clock with all the airline CEOs.” Mnuchin spoke to reporters after leaving the Senate Republicans luncheon. “Essential travel, we want to have airlines that operate, maybe on a reduced basis. Airlines have a short-term liquidity issue, and absolutely, that's something we talked about today” with Senate Republicans. “I've also spoken to the [House] Speaker about that,” he said.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said the export restrictions on masks, respirators, medicines and other goods needed for responding to the COVID-19 pandemic is “a bad cycle,” and he urged the president and world leaders “to work together on a coordinated response on the epidemic.” Grassley, who was speaking with reporters on a conference call March 16, said restrictions reduce global supply and lead to higher prices. “I was encouraged to see the G7 leaders' statement today,” he said, which mentioned support for global trade.
Supply chain disruptions due to China's lockdown to contain the coronavirus pandemic may end up not being as relevant as the worldwide economy shudders and stalls. Kurt Tong, former consul general to Hong Kong and a business consultant with the Asia Group, told reporters March 16: “You can have supply chain shocks that are being masked by the fact that there’s no demand for the goods.” He said the abrupt reversal of economic activity means “shipments are going to come down.” Tong and others were speaking on a webinar about trade and the coronavirus.
China accounted for 26% of imports of medical devices, protective gear and other supplies needed to fight the coronavirus epidemic before the trade war began, according to a recent paper by Peterson Institute for International Economics economist Chad Bown -- and after tariffs were put on the goods, those imports fell by 16%.
A proposal by the administration to change the standard of liability for companies that have a role in importing, but are not the importer of record, has been met with some support and some wariness by Congress members who focus on trade. The idea, which was in the Department of Homeland Security report on combating the sale of counterfeits through e-commerce platforms (see 2001240043) and the executive order that swiftly followed (see 2002100042), would require a change in law. According to a recent analysis from Crowell Moring, “the initiative seeks to extend liability beyond the importer of record for gross negligent actions by a service provider that 'facilitated' the import of such goods, an effort that likely would require additional statutory authority.”