Trump tariffs

The Commerce Department will require cash deposits of estimated countervailing duties on softwood lumber from Canada, it said in a fact sheet issued April 24 (here). Rates calculated in its preliminary determination range from 3.02% to 24.12%, depending on the Canadian producer or exporter. The imposition of duties marks the latest phase in a long-running dispute over Canadian softwood lumber that dates back to 1982. U.S. softwood lumber producers requested antidumping and countervailing duties on softwood lumber in late 2016 (see 1611280035), following expiration of the U.S.-Canada Softwood Lumber Agreement a year earlier (see 1510160010).

The Commerce Department on April 19 launched an investigation that could result in the imposition of tariffs, quotas or other import restraints on steel. Commerce will examine whether steel imports threaten national security and a finding in the affirmative would allow President Donald Trump to take action to “adjust imports.” Trump signed a memorandum (here) the following day, April 20, instructing Commerce to carry out the inquiry “expeditiously." The Section 232 investigation is legally required to be completed within 270 days, though Trump said at the memorandum’s signing ceremony that he expects the agency’s report in the “next 30 to 50 days, I would say, and maybe sooner.”

Clarity on the United Kingdom's relationship with the EU will likely be necessary before the U.S. government and private sector can find a starting point for bilateral FTA negotiations, according to a Congressional Research Service report (here). Goods currently transit the EU tariff-free, and raising UK tariffs to post-Brexit levels akin to most-favored-nation EU tariff rates could have substantial impacts on deeply integrated European markets such as automobiles, according to the report. CRS pointed to a statement from the EU that the “UK cannot have a better trade relationship with the EU outside of the Single Market than within it.” As the UK faces the prospect of losing access to the EU Single Market, U.S. businesses that export from the UK to other parts of the EU face the specter of increased tariffs, the CRS said.

The leaders of four high-powered dairy groups and four Minnesota congressional lawmakers urged President Donald Trump to take action to loosen Canadian price constraints harming U.S. milk exports. National Milk Producers Federation CEO Jim Mulhern, U.S. Dairy Export Council CEO Tom Vilsack, International Dairy Foods Association CEO Michael Dykes and National Association of State Departments of Agriculture CEO Barbara Glenn wrote a letter (here) to Trump urging him to use the “full range of tools” to persuade Canada to open its dairy market to U.S. exports, address the Canadian dairy market situation and its “chronic use of nontariff tools” early in NAFTA renegotiations, and urge Canadian Prime Minister Justin Trudeau to reopen his country's market to ultra-filtered milk imports from the U.S. Copied on the letter were several of Trump's advisers and Cabinet members, as well as several key members of Congress. If the suggested approaches don’t bring freer and fairer bilateral trade, the U.S. should bring Canada’s actions with regard to dairy to the attention of the World Trade Organization, the executives wrote.

A March 31 executive order (here) signed by President Donald Trump tasked the commerce secretary and the U.S. trade representative with leading interagency efforts to submit a report to the White House by June 29 on the causes and impacts of the 2016 U.S. trade deficit in goods. The order instructs those Cabinet officials to consult with the secretaries of State, the Treasury, Defense, Agriculture and Homeland Security in preparing the report. The order also notes a 2016 U.S. trade deficit in goods of more than $700 billion and an overall trade deficit last year of more than $500 billion.

The Trump administration is considering a push for new World Trade Organization trade facilitation commitments as part of NAFTA renegotiations, according to a draft notice from Acting U.S. Trade Representative Stephen Vaughn (here). That would mean new rules requiring NAFTA countries to conduct "customs operations with transparency, efficiency, and predictability, and that customs laws, regulations, decisions, and rulings are not applied in a manner that would create unwarranted procedural obstacles to international trade," it said. Those commitments were included in a list of three main "customs matters" in the draft. Congress earlier this week (see 1703290038) received the draft, which, once finalized, would formally initiate a consultation period ahead of NAFTA discussions.

Regardless of administration, there's a need to rebalance the trade policy roles of the executive and legislative branches, said Sen. Mike Lee, R-Utah, during a March 30 speech at the American Enterprise Institute (here). Earlier this year, Lee introduced S. 177, the Global Trade Accountability Act, which would make all executive branch trade actions, including tariff increases and reductions, subject to congressional approval. That bill seems unlikely to make much progress in the near future (see 1702100043). President Donald Trump is making "trade policy great again" by reinvigorating debates on trade around the country, he said. "I see it as a good thing." The presidential election showed that voters are fed up with a "shallow contest of political slogans that has for far too long masqueraded as a reasoned, conscious discussion about trade policy."

The National Council of Textile Organizations (NCTO) is concerned that the miscellaneous tariff bill (MTB) process is being “abused” through the filing of hundreds of petitions on finished goods, especially apparel, outgoing Chairman Robert Chapman said March 23 at the group's annual meeting (here). “On principle, NCTO opposes MTBs on finished goods because they often compete with like products made with U.S. inputs,” Chapman said. “Duty reductions on finished textile items from any source can also undermine U.S. free trade agreements that grant duty relief through a yarn forward rule of origin.” But Chapman added that NCTO strongly supports duty relief on domestically unavailable manufacturing inputs that don’t compete with other U.S.-made products. The International Trade Commission is in the process of reviewing the petitions and comments (see 1703230052).

International Trade Today is providing readers with some of the top stories for March 6-10 in case they were missed.

Global steel overcapacity, agricultural market access and Canadian softwood lumber imports would be top priorities for Robert Lighthizer if the Senate confirms him to serve as U.S. trade representative, a position he expects will continue to lead the executive branch’s execution of trade policy, he said during his Senate confirmation hearing March 14. “I fully expect to have the full statutory authority that the Congress provides,” Lighthizer told the Senate Finance Committee. President Donald Trump named Lighthizer the nominee for the position in January (see 1701030018).