Mara Lee

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The U.S. under previous administrations passively stuck with "outdated and underperforming trade deals and allowed international bureaucracies to undermine U.S. interests," the Office of the U.S. Trade Representative said.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.

After a visit at the White House, House Ways and Means Chairman Kevin Brady, R-Texas, told reporters at the Capitol that he told the president that the next step after tax reform is expanding export opportunities. "NAFTA was a good part of our discussions," he said Feb. 26. "I think there's potential major wins for President [Donald] Trump in NAFTA." Brady pointed to improvements in customs, digital trade, intellectual property and agriculture.

The Japanese Business Federation (Keidanren) and the United States Council for International Business wrote to U.S. governors suggesting that foreign-owned U.S. auto and auto parts factories could be endangered if the U.S. trade representative insists on "economically unsustainable" rules of origin for automobiles. "As of 2015, Japanese companies had invested a cumulative $421 billion in the U.S., supporting more than 856,000 jobs in communities throughout the U.S. with average salaries of more than $80,000," the Feb. 21 letter said. The two groups say it's time to update NAFTA to deal with digital trade and intellectual property rights, but that they wish "to emphasize the need to 'do no harm'" in the rewrite.

The Department of Defense agrees with a Section 232 investigation that concludes that systematic unfair trade practices that erode the industrial base pose a risk to national security. However, Defense Secretary James Mattis' position is that any tariffs or quotas aimed at shoring up the domestic steel and aluminum industries may have "negative impact on our key allies." Mattis, in an undated memo released by the Commerce Department on Feb. 22, wrote that there is no immediate problem with sourcing steel and aluminum for military uses, since military consumption is just 3 percent of U.S. production. The Commerce Department's report, which became public last week (see 1802160020), noted that as well.

Courier and delivery services could greatly benefit from a modernized NAFTA, the Coalition of Services Industries said in a report released Feb. 21. The lobbying group said negotiations are in a critical stage, and if the U.S. withdraws from the agreement -- as President Donald Trump has repeatedly threatened -- services industries are among the groups that will be hurt most. The services coalition said NAFTA could change rules on cross-border trucking and Mexico's requirements to use Mexican brokers.