The combination of World Trade Organization rules for Most Favored Nation treatment and bound tariff rates leave the U.S. at a disadvantage within trade negotiations, Commerce Secretary Wilbur Ross said during a May 14 speech at the National Press Club. "We are now constrained by two sides of a WTO pincer," he said. The MFN, which requires level tariff rates for countries the U.S. doesn't have free trade agreements with, and Bound Tariff Rates, the ceiling on allowed tariff levels, "prevent us from having reciprocal tariffs because, in most cases, our bound rate ceiling is at or near our very low MFN applied rate, while other nations have higher levels of both." President Donald Trump has mentioned the possibility of implementing a "reciprocal tax" (see 1802120034).
Two pro-trade Democrats, a Freedom Caucus member and a retiring moderate Republican have banded together to introduce a bill meant to curtail executive power on trade proceedings. The bill would create a process similar to the Congressional Review Act, which allows Congress to nullify recently completed rulemakings, for trade measures. "It’s time that Congress steps up to the plate, and uses the powers granted by our Constitution to collaboratively shape U.S. trade policy,” lead sponsor Rep. Ron Kind, D-Wis., said in a statement announcing the bill's introduction May 10.
The Trump administration looks set to continue its focus on deregulation, judging by its recently released Spring 2018 unified regulatory agenda. Regulatory agencies with a hand in trade laid out their plans to harmonize and streamline regulatory requirements, including on Lacey Act implementation, a modernized seafood inspection program and an update to Toxic Substances Control Act chemical data reporting requirements. On the other hand, regulatory plans also include enforcement measures, including procedures for Commerce scope rulings during CBP investigations of antidumping and countervailing duty evasion and increased oversight over organic imports.
The process for importers to get product exclusions from Section 232 tariffs on steel and aluminum items is too slow, and too burdensome, according to 39 members of the House of Representatives, from both parties, who have suggestions for how to change it. Their letter, sent May 7 to the Department of Commerce, says that retroactive relief from tariffs should date back to the date of submission, not the date of posting, unless the submission was not initially complete. In that case, the lawmakers say, the refund should be from the date the submission was complete, rather than the date it was publicly posted.
The Court of International Trade on May 3 dismissed a steel importer’s challenge of Section 232 tariffs on iron and steel products. Severstal Export Miami, its affiliate Severstal Export GmbH, and the U.S. government had agreed to the dismissal, after CIT in April denied Severstal’s motion for a preliminary injunction to stop imposition of the 25 percent tariff on Severstal’s imports. Severstal agreed to dismissal with prejudice, so it won’t be able to bring its claims again at CIT. The court had told Severstal that the case would be unlikely to succeed, noting that Section 232 gives the president the discretion to impose Section 232 tariffs even for economic threats to national security (see 1804060028).
International Trade Today is providing readers with some of the top stories for April 30 - May 4 in case they were missed.
The chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee told Commerce Secretary Wilbur Ross that his replies on how the department weighed the issues before recommending Section 232 tariffs were incomplete -- and said that if his next letter isn't an improvement, the committee may have to consider compelling his testimony. The letter, sent May 3, gave Ross two weeks to reply. "Clearly, these tariffs will have a much more far-reaching effect on downstream industries and consumer prices than explained in your response," Senators Ron Johnson, R-Wis., and Claire McCaskill, D-Mo., wrote. They said Ross failed to provide detailed cost-benefit analyses on the tariffs' effects, or analyses of prior tariffs' effects on downstream industries or prices. They also said he declined to say how the agency is going to measure success of the tariffs.
President Donald Trump's proclamations on the latest extensions to country exemptions on the Section 232 tariffs (see 1804300064) will be published in the Federal Register on May 7. The proclamations on steel and on aluminum say that while Canada, Mexico and the European Union face a June 1 deadline to agree to "satisfactory alternative means" to ameliorate the national security threat their imports cause, Australia, Brazil and Argentina do not have an expiration date on their exemptions. The president said since those countries have reached agreements in principle, he didn't think a deadline was necessary. But if those agreements are not finalized promptly, he reserves the right to impose tariffs.
RANCHO MIRAGE, Calif. -- The elimination of drawback availability on entries subject to Section 232 tariffs in most the recent presidential proclamations (see 1804300064) applies retroactively to the March 23 effective date of the tariffs, said John Leonard, executive director-trade policy and programs at CBP, during a May 2 interview at the National Customs Brokers & Forwarders Association of America's annual conference. The new language about drawback raised some questions about how it was applied (see 1805010027). The drawback issue had "been an open question" and something "we needed direction on," he said. Between the first proclamation and the most recent proclamation, "CBP pointedly made sure we tried to get as many technical questions as possible answered," Leonard said. "We expect our quota module to be ready pretty soon to be able to handle absolute quotas, which we haven't for many years."
CBP issued the following releases on commercial trade and related matters: