Panelists from the U.S. and Mexico said that cars assembled in Mexico by Chinese-owned firms can't enter the U.S. with USMCA benefits because of the stringent rules of origin, but spent less time talking about how cars manufactured outside China, including in the U.S., could enter under 2.5% most favored nation tariffs.
U.S. Trade Representative (USTR)
The U.S. cabinet level position that oversees trade negotiations with other countries. USTR is part of the Executive Office of the President. It also administers Section 301 tariffs.
Ten senators have introduced a bill to require that the administration reinstate 25% tariffs on Mexican steel imports for at least one year, because they say that Mexico is not honoring the 2019 agreement that lifted Section 232 tariffs on Mexico and Canada. A companion bill was also introduced in the House.
U.S. Trade Representative Katherine Tai said she will be bringing up China's overproduction of electric vehicles as part of the 2026 USMCA review process, implying that she expects Mexico to reject Chinese investment in its auto manufacturing sector.
U.S. Trade Representative Katherine Tai said that talking about tariffs more than other aspects of trade policy is, to a large degree, "a red herring," and said reducing U.S. trade policy "down to a conversation about tariffs is really unfair."
Automakers and their suppliers are telling the Biden administration in comments submitted ahead of an upcoming report that not having a form for certificate of origin has paradoxically made compliance more difficult. They also said that companies are having a difficult time certifying how much workers in the supply chain earn, and that the absence of final USMCA regulations are all problems for trade compliance in the more than three years since USMCA took effect.
Japan, which suffered economic coercion from China earlier than any other country, is largely on the same page as the U.S. when it comes to supply chain resilience and restrictions on exports, but the two diverge in their attitudes about China's role in the global economy.
A USMCA dispute settlement panel ruled in Canada’s favor in a much-awaited second decision on Canada’s dairy tariff rate quotas, according to a report released by the panel on Nov. 24.
The Senate Finance Committee's top Republican, along with seven of his colleagues, accused Office of the U.S. Trade Representative officials of misleading congressional staff on what they would be negotiating on digital trade at the World Trade Organization. "As recently as this weekend, USTR officials told congressional staff that they had not abandoned support for negotiating the free data flow commitments at issue," Sen. Mike Crapo, R-Idaho, and his colleagues wrote Oct. 26.
An analysis of the Rapid Response Mechanism, aimed at bolstering the rights of Mexican workers in USMCA, says it's early yet to see if it raises wages and employment in export-intensive sectors, and if the U.S. is successful in replicating the approach in other trade agreements.
The Senate Finance Committee's chairman and its top Republican jointly told U.S. Trade Representative Katherine Tai that she must make clear that the Office of the U.S. Trade Representative will immediately respond to Canada enacting any sort of digital services tax, "using available trade tools." Sen. Ron Wyden, D-Ore., and Sen. Mike Crapo, R-Idaho, wrote that in italics, for emphasis. "When you take these steps, you will do so with our full support," the two wrote Oct. 10.