Usually tariff issues are taken up in the Senate Finance Committee, but the Senate Labor Committee examined recent trade policies during a Sept. 5 hearing. Labor ranking member Patty Murray, D-Wash., noted the committee has an interest because of the effect on workers. "[President Donald] Trump is playing a dangerous game right now, and workers are paying the price," she said.
The International Trade Commission recently issued Revision 11 to the Harmonized Tariff Schedule. Changes include those required to implement new exemptions from absolute quotas on steel from Argentina, Brazil and South Korea, and aluminum from Argentina, imposed as part of those countries’ deals to escape Section 232 tariffs (see 1808300004). Those changes take effect Aug. 30. The updated HTS also includes amendments effective Sept. 1 to rules of origin under the U.S.-Bahrain Free Trade Agreement. Finally, the recently revised subheading 9705.00.0085, which since July 1 has covered “zoological, botanical, mineralogical, anatomical, historical and paleontological pieces,” now refers more broadly to “other” collections or collectors’ pieces (i..e, other than numismatic, archaeological or ethnographic pieces). That change takes effect retroactively to July 1.
The "agreed outcomes" to the U.S.-Korea Free Trade Agreement were published by the U.S. Trade Representative on Labor Day, and they lay out the language changes put in place to protect the U.S. light truck market from Korean imports for another 20 years. In the original KORUS, agreed to in 2011, the 25 percent tariff on light trucks would last until 2021. In the renegotiated KORUS, they last through 2041. "The publication of the text of the agreed outcomes follows the completion in mid-August of U.S. domestic consultation procedures," said the USTR in a news release. "Korea will now initiate the next step in its own domestic procedures, which is to open for public comment the provisional Korean translations of the outcomes to amend the KORUS Agreement."
CBP plans to send out information about the change in effective dates for Section 232 tariff exclusions (see 1808300004), a CBP spokesman said. "We will send out an update in the near future indicating the change in effective date for approved exclusion requests back to when the request was accepted by the Department of Commerce," he said. Approved exclusions now apply as of the date the exclusion request was filed, not when the request was posted for public comments (see 1808310008).
International Trade Today is providing readers with some of the top stories for Aug. 27-31 in case they were missed.
The Commerce Department confirmed that the Aug. 29 proclamations on exclusions from Section 232 tariffs are retroactive to the date the exclusion request was accepted (see 1808300004), rather than the date of posting for public comments. "For properly submitted exclusion requests, it is the filing date," a Commerce Department spokesman said.
Sen. Elizabeth Warren, D-Mass., called on the Commerce Department Inspector General to investigate the process for receiving company-specific requests for exclusions from Section 232 tariffs on steel and aluminum. “Commerce officials claimed that the exemption process would be 'fair and transparent,'" her office said in an Aug. 29 press release. “But an investigation by Senator Warren and additional public reporting have revealed the process is replete with mistakes and appears arbitrary, opaque and subject to political favoritism,” she said, citing an exclusion granted to a sanctioned Russian aluminum company. Among other things, Warren asked in her letter that the IG examine the "processes and procedures in place for Commerce officials to make" decisions on tariff exemptions.
The White House on Aug. 29 issued proclamations expanding company-specific exclusions from Section 232 tariffs and quotas on steel and aluminum. The proclamations make exclusions from Section 232 tariffs retroactive to the date the exclusion request was "accepted," rather than the date of posting, by the Commerce Department. They also authorize Commerce to grant exclusions for products from countries constrained by Section 232 quotas on steel and aluminum (currently Argentina for steel and aluminum, and South Korea and Brazil just for steel).
Remaining risks that could derail the momentum toward replacing NAFTA include legislative uncertainty and Canadian inflexibility, said Carlos Capistran, Canada and Mexico economist at Merrill Lynch, in an Aug. 28 research report. There's a possibility that an insistence on a trilateral deal in the U.S. Congress or that a Democratic takeover in the House could prevent approval, Capistran said. "There is also a risk that the Mexican Congress does not approve the deal, for instance on the grounds that the energy sector is too open, but we see this as a low risk given the participation" of the incoming Mexican president's team in the negotiations.
Several trade lawyers see Chapter 19, dairy and steel and aluminum tariffs as the thorniest issues to resolve as Canada is invited to negotiate NAFTA this week. Dan Ujczo, chairman of the U.S.-Canada practice at Dickinson Wright, said that Mexico is considering agreeing to voluntary quotas in steel and aluminum, but that an agreement is "highly unlikely" this week, before the bilateral deal is forwarded to Congress on Aug. 31. "Canada may be able to raise the issue in its discussions; however, progress will be unlikely, given the long list of issues," he wrote in a note to clients. He predicted that the end of aluminum and steel tariffs on NAFTA partners -- and the dropping of their retaliatory tariffs -- will happen during the 90-day review in Congress.