The U.S. will tighten quotas on Brazilian steel exports because the steel market has contracted in 2020, President Donald Trump said in a proclamation, issued at 10:30 p.m. on Aug. 28. Domestic producers have shipped 15% less across the first half of 2020 than in the previous year, which is more than the decline in demand, Trump said. Imports from most countries have declined this year in a manner commensurate with this contraction, whereas imports from Brazil have decreased only slightly, the proclamation said.
After the first high-level review of the phase one trade deal, the principals talked about progress and ensuring the success of the U.S.-China trade agreement, but some believe the happy talk can't obscure that China and the U.S. are disentangling their mutual dependency in tech goods and services. “There is a re-alignment that is happening in real time,” Rideau Potomac Strategy Group President Eric Miller said in an Aug. 25 phone interview, the day after the call. U.S. and Chinese trade officials reemphasized their commitment to the phase one agreement during the Aug. 24 call, the Office of the U.S. Trade Representative said.
EU to Eliminate Tariffs on Lobster, US to Reduce Tariffs by 50% on Crystal, Cigarette Lighters, Etc.
The U.S. is reducing by 50% tariffs on certain prepared meals, certain crystal glassware, cigarette lighters and lighter parts, surface preparations and propellant powders, in exchange for the European Union ending tariffs on live and frozen lobster imports. Canada had been taking market share from Maine lobster exports since Canada and the EU signed a trade deal, and Canadian lobsters could enter duty free. The products from the EU have an “average annual trade value of $160 million,” while lobster exports to the EU topped $111 million in 2017, the Office of the U.S. Trade Representative said in a news release Aug. 21. All the tariff reductions are effective as of Aug. 1, 2020.
During the second of two hearings aimed at satisfying primarily Florida and Georgia farmers frustrated with lost market share to Mexican competitors, officials from the Commerce Department, the U.S. Department of Agriculture and the Office of the U.S. Trade Representative on Aug. 20 heard vastly different views of how Mexican vegetable and fruit producers deserve to be treated (see 2008180034). Blueberry, zucchini, cucumber and bell pepper farmers from Georgia testified again and again that Mexicans can sell these items cheaper than they can, because of much lower labor prices, because of stricter environmental regulations in the U.S., and because Mexican producers have gotten government help to build shade houses, greenhouses and hoop houses.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were not able to hold a videoconference with China Vice Premier Liu He on the progress of the U.S.-China trade deal over its first six months, Reuters reported. The six-month anniversary of the deal, Saturday, Aug. 15, was the intended date for the review. The USTR did not respond to a question on when a meeting would be rescheduled to talk about compliance. Reuters reported that a source said the U.S. wanted more time for China to increase its U.S. purchases agreed to in the deal, which entered into force Feb. 15, just before the COVID-19 pandemic began to disrupt commerce globally.
Former U.S. trade representative Bob Zoellick laughed when a webinar moderator asked him how a pro-free-trade consensus can be re-established. Zoellick was on a Carnegie Endowment for International Peace webinar about the future of the global trading system with European Trade Commissioner Phil Hogan June 30. He said those who support free trade have always had a fight, because politics often align with protecting domestic producers from import competition.
Experts disagreed on the utility of the Trump administration approach to World Trade Organization reform, during a Senate Finance Committee hearing on the topic, and senators on the left and right suggested that the negotiated trade rules disadvantage Americans.
As the Office of the U.S. Trade Representative weighs whether to remove any items from the Airbus retaliatory tariff list and replace them with other goods, or to hike tariffs on any goods now being taxed at an additional 25%, most trade groups are asking him to limit tariffs to aerospace, and spare what they import. The decision is due by Aug. 12.
Thousands of people who either work in the wine industry or who enjoy drinking imported wines wrote to the Office of the U.S. Trade Representative between June 26 and July 26. In all, USTR received close to 30,000 comments on what to do about tariffs on European goods. USTR is considering changing the mix of products, either by putting products on the list that were spared last time, or by adding new products not considered last year. It's also considering increasing the 15% and 25% tariffs on EU goods (see 2006240017).
The Office of the U.S. Trade Representative received close to 400 comments on the possibility of punishing Austria, Brazil, the Czech Republic, India, Indonesia, Italy, Spain, Turkey and the United Kingdom if they start collecting digital service taxes, as the countries have proposed. The USTR is also considering punishing the European Union, which is considering a unionwide DST.