A bill that would delay the imposition of Section 232 tariffs on imported autos and auto parts until the International Trade Commission evaluates the industry was reintroduced in the Senate Jan. 15 by its co-sponsors Sen. Lamar Alexander, R-Tenn., and Sen. Doug Jones, D-Ala. Jones and Alexander introduced their first bill in July last year (see 1807250048). The ITC is closed during the partial federal government shutdown, and any such comprehensive study would likely have to wait until after the ITC evaluation of the economic benefits of the new NAFTA. The Commerce Department is supposed to make its recommendation to President Donald Trump in mid-February.
The Court of International Trade could be a venue for at least two more big cases involving constitutional implications this year, Crowell & Moring lawyer Daniel Cannistra said in the firm's litigation forecast for 2019. The next challenge may involve the Section 301 tariffs and whether a president "can unilaterally rewrite the tariff schedule for the purpose of negotiating trade agreements," Cannistra said. "The other constitutional issues that appear to be on the CIT’s horizon include the new United States-Mexico-Canada Agreement, which is sure to contain questions concerning executive authority over trade." The CIT is currently considering the constitutionality of the Section 232 tariffs on steel and aluminum (see 1812190044), and that case is "likely to be resolved in 2019," Cannistra said. According to Cannistra, "the consequences of these decisions will be profound. For example, if the CIT upholds one of these administration trade policies, what will it mean to a company’s global supply chain? Will production need to be relocated from one country to another? These shifts are not made overnight; the court’s decisions will affect companies for years."
U.S. Chamber of Commerce CEO Thomas Donohue said the same things on trade he's been saying for months -- the tariffs on Chinese goods are paid by businesses, not China; the steel and aluminum tariffs in the NAFTA region have to go; the new NAFTA should be approved -- during his annual State of American Business address. "Now that we’ve struck a deal with Canada and Mexico, the administration must make good on its repeated promise to remove the steel and aluminum tariffs that were imposed in the heat of negotiations," Donohue said in his speech Jan. 10. "This would be an encouraging sign for all of our partners, including those we’re pursuing new market-opening agreements with -- Japan, the EU, and the UK."
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, reiterated that he will evaluate the president's authority to impose tariffs under Section 232, saying, "I do not believe that we should alienate our allies with tariffs disguised as national security protections." Grassley released a statement Jan. 9 on his priorities for the new Congress. He also said, "I’m not fond of the Section 301 tariffs on products from China, but I agree with the reasons they’ve been applied. I’ll continue to engage with the Administration on the ongoing trade dispute with China in hopes that negotiations will result in a change in China’s discriminatory policies and practices and an easing of tariffs and tensions. The World Trade Organization is also on his to-do list. "I have great interest in reforming and strengthening the WTO, which is a clearinghouse for our rules-based international trading system. I plan to work closely with the administration and our allies to strengthen the ability of the WTO to more effectively meet the demands of our global economy."
Continued economic "prosperity" is no "foregone conclusion” amid the broadly held concern about the impact to the U.S. economy of the Section 301 tariffs on Chinese imports, Section 232 tariffs on steel and aluminum imports, and “corresponding retaliation against U.S. exports, said Americans for Free Trade in a Jan. 9 “welcome” letter to newly elected and returning members of Congress. “We agree that China must be held to account for its violations of our trade laws and the international trade obligations all nations share,” said the coalition, whose 150 members include multiple associations of customs brokers. “Imposition of a tariff of up to 25 percent on $250 billion worth of China products -- and the threat to impose a similar duty on $267 billion more of such products -- will not remedy the situation. We continue to see stories on a daily basis about companies, both large and small, who are being harmed by these tariffs.” The coalition urges Congress to “exercise its oversight role on trade policy matters to prevent further harm to U.S. workers, consumers, and families that will result from both the existing and proposed tariffs,” it said.
Sen. Chuck Grassley, R-Iowa, the new Senate Finance Committee chairman, said that while there's room for Democrats to get some of their priorities in the new NAFTA, he thinks President Donald Trump should play hardball if Democrats insist on reopening negotiations. "I want to sit down and talk to those Democrats and see what they have in mind, because surely they can't have in mind renegotiating. But there's things we can do, like side letters on what our feeling is about it," he said. "If they're reaching the point where you gotta go back to the negotiating table, I would encourage the president to pull out of NAFTA, and hope that they're smart enough not to let that happen."
International Trade Today is providing readers with some of the top stories for 2018 in case they were missed.
All the quota openings for Jan. 2, including the Section 232 quotas on steel and aluminum, "appear to be operating normally," according to a National Customs Brokers & Forwarders Association of America description of CBP's recent call with industry about trade processing during the federal government shutdown. "CBP stated that they are sorting through the funding lapse on legal and administrative processes, but that the trade should go ahead and meet any deadlines due to CBP," according to the NCBFAA. During the shutdown, "the ACE Help Desk and the ACE Accounts Service Desk are manned by contractors who are already funded," the NCBFAA said. "The Trade Remedy and Entry Summary mailboxes will also still be monitored." Rulings will not be issued during the shutdown, but CBP import specialists at the Centers of Excellence and Expertise are still at work and will be issuing and reviewing responses to CBP Forms 28 and 29. CBP Fines, Penalties and Forfeiture officers are also still on the job. Asked about other agencies, CBP said it is not its "intention to hold cargo, and they intend to conditionally release."
The U.S Trade Representative issued its first list of product exclusions from Section 301 tariffs on products from China, granting full or partial exemptions for 22 10-digit tariff subheadings, according to a pre-publication copy of a notice posted to the agency’s website Dec. 21. The product exclusions apply retroactively as of July 6, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
The incoming Senate Finance Committee chairman suggested during a speech that the committee could rein in Trump's use of Section 232 tariffs. Sen. Chuck Grassley, R-Iowa, said he doesn't mind being creative in negotiations, but he will be reviewing the president's use of those tariffs. "I strongly disagree with the notion that imports of steel and aluminum, automobiles, and auto parts somehow could pose a national security threat," Grassley said, according to his prepared remarks. "Senator Portman and others have already introduced legislation to narrow the scope of how an administration can use the power that Congress authorized in 1962 under the influence of the Cold War (see 1808010048). "I believe that these efforts serve as a prudent starting point for the discussion we need to have on Section 232 authority in the next Congress."