China will implement retaliatory 25 percent tariffs on 545 tariff lines, largely agricultural and auto targets, but also "aquatic products," on July 6, it said in a statement. Like the U.S., it is saving an additional $16 billion in targets in reserve. For China, those will be chemicals, energy imports and medical equipment. For the U.S., semiconductors, plastics, railcars, tractors, cranes and new industrial machinery lines could be in the second phase. China's tariffs are in response to the Section 301 tariffs on imports into the U.S. set to begin July 6 (see 1806150003)
The Senate Finance Committee will question Commerce Secretary Wilbur Ross on June 20 about the effects of Section 232 aluminum and steel tariffs and the investigation into auto and auto part imports, which President Donald Trump says are a threat to national security. In announcing the hearing, Chairman Orrin Hatch, R-Utah, said, “While we share a common goal of pursuing a pro-growth, pro-America agenda, I have made no secret my concerns with the administration’s use of 232 tariffs." He said the cost to manufacturers undermines the positive effects of tax reform. "I remain committed to working with this administration to push trade policies that open up markets for American goods and increase U.S. competitiveness,” he said.
The entire congressional delegation from Washington state sent a letter to the U.S. trade representative, asking him to negotiate a solution with countries facing Section 232 steel and aluminum tariffs, because retaliatory tariffs on apples, cherries, pears and potatoes will cost the state's farmers tens of millions of dollars. The letter talks about cherry sales in China, apple sales in India, China and Mexico, and notes, "With cherry harvest beginning in the Pacific Northwest, time is of the essence for our growers."
An amendment that would stop the deal to lift an export ban on Chinese telecom equipment maker ZTE is expected to pass the Senate June 18 as part of the defense authorization bill. Since the House of Representatives did not include such an amendment in its version, passed in May, conference committee members would have to agree to include it in the final version. House Speaker Paul Ryan, who will not serve on the committee, said he doesn't know what position the House negotiators will take. "I'm going to leave it to our conferees," he said at a press conference at the Capitol June 14.
The Coalition of American Metal Manufacturers and Users posted a "comprehensive list of retaliatory tariffs" as of June 11. The list covers retaliatory tariffs, either currently in effect or proposed, from Canada, China, the European Union, India and Mexico. "Other countries including Japan, Russia and Turkey have warned of potential retaliation but have not announced formal tariffs," the group said. The tariffs are in response to Section 232 tariffs on U.S. imports of steel and aluminum. The Mexican tariffs took effect on June 5 (see 1806050041), while Canada's take effect July 1 and the EU's on June 20 (see 1806010022). China's tariffs took effect April 2, and India's take effect on June 21.
An amendment aimed at requiring a vote from Congress before Section 232 tariffs can be imposed was blocked in the Senate on June 12. Sen. Bob Corker , R-Tenn., said he understood that all the powers in the Senate were arrayed against his effort receiving a vote. His proposal would have not only required that Congress approve any tariffs against auto parts and autos based on national security grounds, but also would have been retroactive, so that Congress could have rolled back the 232 tariffs on steel and aluminum (see 1806060018). The amendment was blocked on a procedural technicality -- that bills that affect revenue must start in the House of Representatives -- but Corker said on the floor of the Senate it was clear that wasn't the true reason. He said that Republican senators were fearful of upsetting the president. He said what he's been told since he proposed attaching his amendment to the defense authorization bill was: "Don't poke the bear!"
International Trade Today is providing readers with some of the top stories for June 4-8 in case they were missed.
President Donald Trump has repeatedly vowed to raise tariffs on longtime allies because, in his view, they have ripped off America. But at a post-G-7 press conference, he laid out the consequence if they don't drop their tariffs to the same level as the U.S. "It's going to change. They have no choice. If it's not going to change, we're not going to trade with them," he said. He listed Canada, the European Union -- which he called "brutal" -- and India as offenders that could be barred from exporting to the U.S.
BALTIMORE -- Trade policy under President Donald Trump is upending years of largely consistent approaches to U.S. trading partners, panelists said during the American Association of Exporters and Importers annual conference on June 8. While the panelists mostly agreed that the consequences of the tariff-centric approach is too harsh, some expressed sympathy with the administration's general reaction to globalization.
It's not clear that the president's authorities under Section 232 allow for the elimination of drawback, law firm Neville Peterson said in a blog post. President Donald Trump said in April that drawback would not be allowed for entries subject to the Section 232 tariffs (see 1804300064). "While this is a close question, the President’s power under Section 232 is limited to 'adjust[ing] imports,'” the law firm said. "It seems unlikely that the President can take action respecting exports, the activity which generally triggers claims for duty drawback."