Mara Lee

When Trump administration officials are in Beijing this week, there is going to be "a lot of stuff that's getting thrown at the wall," according to Evan Feigenbaum, vice chairman of the Paulson Institute at the University of Chicago. Feigenbaum, speaking on a panel about China's policies, said the Trump administration is complaining about bilateral deficits, intellectual property theft, Made in China 2025, non-tariff trade barriers and Chinese state-run firms buying U.S. tech companies. While most of the issues underlined in the Section 301 investigation are in the non-tariff trade barriers and IP theft areas, experts at the Washington International Trade Association event disagreed on whether President Donald Trump would declare victory after only a pledge to reduce the bilateral trade deficit.

Because the U.S. has stepped away from a leadership role in free trade, Japan has had to step in, Japanese politicians told an audience at the Brookings Institution. That's why it worked to save the Trans-Pacific Partnership after the Trump administration pulled out. Politicians and experts speaking on the panel on the future of U.S.-Japan trade said the TPP would have been more effective for dealing with China's intellectual property rights violations than the course the U.S. is on now.

Mexico's auto industry is against the U.S. proposal to require higher-wage work as part of the NAFTA rules of origin that make it possible for Canadian and Mexican assembly plants to sell cars into the U.S. duty free. The Wall Street Journal recently quoted the head of the Mexican auto parts manufacturers' trade group, Eduardo Solis: "'The U.S. proposal isn’t acceptable. The percentage, the transitions, the restrictions. You have to understand the U.S. proposal is like putting padlocks on padlocks,' Mr. Solis said of the two-layered rule of origin. 'Imagine a car that does comply with the percentage, but doesn’t comply with all the core parts. Or you comply with core parts but don’t meet the steel and aluminum requirements. Or you comply with the first three but you don’t meet the wage requirements.'"

Argentina and Brazil recently agreed to deals resulting in permanent exemptions from Section 232 tariffs on iron and steel products and aluminum products. Argentina will be exempt from tariffs on both aluminum and steel after agreeing to new quotas on each. Brazil, on the other hand, remains subject to 10% aluminum tariffs after rejecting quantitative restrictions, though it will get an exemption from the 25% tariff on steel.

The U.S. appealed the World Trade Organization's compliance panel decision that said the U.S. had to change its countervailing duties on oil country tubular goods, solar panels, pressure pipe and line pipe. The CVD cases were brought between 2007 and 2012. The core issue in the case is whether the Commerce Department properly described the government's intervention in Chinese firms that made those products when it targeted them for trade remedies. The appeal was published at the WTO on April 30.

U.S. Trade Representative Robert Lighthizer said it will be very difficult to get China to change the policies that are the reasons the U.S. opened the Section 301 investigation. "I am always hoping, but not always hopeful," he said to a U.S. Chamber of Commerce audience two days before he leaves for negotiations in Beijing.

Extended exemptions from Section 232 tariffs on aluminum and steel left some countries and importers relieved, but others uncertain as to what is around the corner on June 1. Announced the evening of April 30 just hours before the deadline, the proclamations on steel and aluminum announce full, if undefined, exemptions for Argentina, Brazil and Australia, the final details of a steel exemption for South Korea, and a delay until the beginning of June 1 for Canada, Mexico and the European Union.

Only one of the allies that have so far avoided tariffs on their steel and aluminum exports to the U.S. has agreed to reducing the volume of those exports -- and Commerce Secretary Wilbur Ross says all will have to if they don't want to face tariffs. "If people don't have the tariffs, and they don't have the quota, that would defeat the whole purpose of the [Section] 232s," he said, which is to boost aluminum and steel production domestically. Since the temporary tariff exemptions for the European Union, Canada, Mexico, Brazil, Argentina and Australia end May 1, it remains to be seen if countries in talks with the U.S. will get another extension.

Canadian Ambassador to the U.S. David MacNaughton pointed to one of President Donald Trump's tweets about e-commerce to explain why Canada sees the need for conservative de minimis levels, but said changing it has been under discussion in NAFTA negotiations. "Is there a number between 20 [dollars] and 800 [dollars] that works? Probably," he said. He said he presumes that before the deal is finished, Canada will raise its de minimis level, but said it will probably be to a lot less than $800. He also said he doesn't expect the U.S. de minimis level to necessarily move down to the same amount Canada agrees to.

Canada is publishing regulatory changes expanding the scope of steel and aluminum products that have to be marked with their country of origin, harmonizing the list with U.S. requirements, according to a press release from the prime minister's office. The move comes amid other measures related to steel and aluminum, including more than $30 million in additional funding to the Canada Border Services Agency and Global Affairs Canada to bolster the country's efforts "to prevent transshipment and diversion of unfairly priced foreign steel and aluminum into the North American market," it said. The new funding, which will be set at $6.8 million annually for five years, will pay for more than 40 new officers to investigate trade complaints. This April 26 announcement follows one in March (see 1803270026) also designed to address America's concerns about illegally subsidized steel and aluminum imports, the subject of the Section 232 action.