The Chapter 11 bankruptcy filing by Toys 'R' Us could reduce new orders of toys in the near future, said Steve Pasierb, president of The Toy Association, in a letter. "In addition to the direct negative impact on some companies, the flood of liquidation product from [Toys 'R' Us] can likely weaken sales at both mass and specialty retailers," he said. "Likewise, there will be a short-term negative influence on orders coming into our manufacturing members, at least until the ramp-up happens to stock for the 2018 holiday season." The toy industry is now "at an inflection point," he said.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, speaking at a conference hosted by free-trade interest groups, said Congress will assert itself when it's time to renew fast-track trade negotiating authority in July -- and that no changes to NAFTA can take effect unless Congress signs off. "Because the Constitution very clearly assigns to Congress the power to lay and collect tariffs and to regulate foreign commerce, Congress must have the final word on the fate of NAFTA," he said March 20, according to prepared remarks. "Congress will use the extension disapproval process under the Trade Promotion Authority law to emphasize that the administration must adhere to the TPA negotiating objectives and to encourage the president to seek new agreements with our trading partners."
Wal-Mart, Macy's, Target and 23 other retailers and apparel brands sent a letter March 19 to the White House asking that broadly applied tariffs not be part of the Section 301 solution to Chinese intellectual property theft and investment restrictions. "Families shopping in our stores pay higher prices because America already levies import taxes as much as 32 and 67 percent on basic clothes and shoes," the companies said in the letter. "Applying any additional broad-based tariff as part of a Section 301 action would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods.... As you continue to investigate harmful technology and intellectual property practices, we ask that any remedy carefully consider the impact on consumer prices."
International Trade Today is providing readers with some of the top stories for March 12-16 in case they were missed.
Tariffs are a tax on consumers, and not the right way to address China's industrial policies and unfair trade practices, the U.S. Chamber of Commerce says. U.S. Chamber CEO Thomas Donohue said March 15 that sweeping tariffs against China "could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation. The livelihood of America’s consumers, businesses, farmers, and ranchers are at risk if the administration proceeds with this plan." Administration officials say the Section 301 technology transfer and intellectual property investigation response will be released in the coming weeks.
Despite the recent attention on Section 232 tariffs, some expect the effects of the Section 301 investigation started last year (see 1708210024) to eclipse the steel and aluminum import restrictions, panelists said at a Washington International Trade Association event March 13. Wendy Cutler, a former acting deputy U.S. trade representative, said once the White House announces what it's doing to respond to China's intellectual property transgressions, "we won't be talking about steel and aluminum."
Senate Majority Leader Mitch McConnell broke his silence on steel and aluminum tariffs, which have sparked strong reactions from Republicans in both chambers since the surprise announcement last week (see 1803010029). "There is a lot of concern among Republican senators that this could metastasize into a larger trade war, and many of our members are discussing with the administration just how broad, how sweeping this might be," he said at a news conference March 6. He noted that President Donald Trump has suggested an exemption for Canada and Mexico might be tied to concessions in NAFTA renegotiations. "From a Kentucky point of view, NAFTA's been a big one, we've benefited from it in every way," the senator from Kentucky added. McConnell said that if the tariffs create disruption, "it could send our economy in the wrong direction."
The Office of the U.S. Trade Representative on Jan. 12 released the results of its Section 301 review of notorious markets, it said in a press release. The report lists “25 online markets and 18 physical markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting,” USTR said. The list “maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the report highlights illicit streaming devices as an emerging piracy model of growing concern,” it said. “The report also calls on several e-commerce platforms to improve takedown procedures, proactive measures, and cooperation with right holders -- particularly small and medium-sized businesses -- to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.”
Speaking alongside Chinese President Xi Jinping, President Donald Trump during at least three different occasions in Beijing on Nov. 9 suggested the U.S. has an unfair trade relationship with China and pledged to make it more reciprocal. “Both the United States and China will have a more prosperous future if we can achieve a level economic playing field. Right now, unfortunately, it is a very one-sided and unfair one. But I don't blame China,” Trump said during a business event with Xi, drawing applause from the crowd, according to a White House transcript of the speech. “After all, who can blame a country for being able to take advantage of another country for the benefit of its citizens? I give China great credit.” Before an expanded bilateral meeting with Xi, Trump said he has “great respect” for China getting ahead of the U.S. on trade, “because you’re representing China,” but added that it’s “too bad” past U.S. administrations “allowed it to get so far out of kilter.”
The World Trade Organization is “not equipped” to mitigate the economic effects spawned by the large, mercantilist Chinese economy, which poses unprecedented challenges for international commerce, U.S. Trade Representative Robert Lighthizer said during an address Sept. 18 at the Center for International and Strategic Studies. “I believe that there is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” Lighthizer said. “The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.”