Mara Lee

President Donald Trump called tariffs "the best way to max out our economic power" but also suggested negotiations with China could be extended beyond the "90 days from the date of our wonderful and very warm dinner with President Xi in Argentina," in a series of tweets Dec. 4. "President Xi and I want this deal to happen, and it probably will. But if not remember, ...... ....I am a Tariff Man," he said. "We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN."

Rep. Steny Hoyer, D-Md., who will be majority leader in the new Congress, told reporters that President Donald Trump would be making a mistake if he gives notice to Congress that he's withdrawing the U.S. from NAFTA, a move he's said he intends to make shortly (see 1812030040). Hoyer, who voted for NAFTA back in 1993, said that the rewrite was only just signed Friday, Nov. 30, and Congress cannot act until certain timetables in the fast-track law are satisfied. For example, the International Trade Commission is working on an economic analysis of the pact, and it won't be ready until March.

The Trump administration is promising not to hike tariffs on China until the end of March 2019, so ports, retailers, the apparel industry and other business interests are breathing a sigh of relief. The administration described it as a 90-day pause in the conflict so that the two sides could have time to negotiate structural changes in China's economic approach, but it's actually 120 days, because the 90-day clock starts on Jan. 1, 2019, according to Larry Kudlow, the president's top economic adviser. That is the day the 10 percent tariff on $200 billion in Chinese imports was scheduled to increase to 25 percent.

Leaders in Congress's trade committees on both sides of the aisle didn't seem appreciative of President Donald Trump's latest threat to withdraw the U.S. from NAFTA before its replacement is voted on. Trump, speaking to reporters on Air Force One on Dec. 2, said: "I will be formally terminating NAFTA shortly. And so Congress will have a choice of the USMCA or pre-NAFTA, which worked very well." Larry Kudlow, the president's top economic adviser, told reporters on a conference call Dec. 3 that the president said that because "he's trying to light a fire under Congress."

Sen. Ron Johnson, who leads the Senate committee charged with oversight, is complaining again to Commerce Secretary Wilbur Ross about the inadequacies of the Section 232 steel and aluminum exclusion process. Johnson, a Republican from Wisconsin, sent a letter Nov. 30 that said he appreciates that the department has begun to produce documents and has provided officials for briefings, but he questioned the logic of rejecting exclusions when the steel companies object, saying they could produce the quality and quantity now imported.

Canadian Prime Minister Justin Trudeau said the new NAFTA "lifts the risk of serious economic uncertainty," and President Donald Trump said he doesn't "expect to have very much of a problem" getting the deal through Congress, because it's been "so well reviewed." While most Democrats in the House of Representatives are not rejecting Trump's NAFTA rewrite out of hand, none who publicly responded to the Nov. 30 signing rushed to endorse it, either. It must go through a few more steps before it is approved.

Complaints about weak enforceability of the new U.S.-Mexico-Canada Agreement were found among both trade advocates and free-trade skeptics as they reacted to the signing of the pact Nov. 30 in Argentina. Customs and trade facilitation elements were praised by many interest groups, but the failure to get higher de minimis levels from Canadian and Mexican negotiators was a disappointment, several said. And the fact that steel and aluminum tariffs on Canada and Mexico remain troubles many, with the Global Automakers saying "it is unfathomable that this important issue has not been resolved in the context of these negotiations."

China used to levy a 25 percent tariff on the BMWs, Mercedeses, Lincolns and Teslas its dealers imported from the U.S., but it recently dropped tariffs on other countries' cars by 10 percentage points, and hiked tariffs on American autos to 40 percent. U.S. Trade Representative Robert Lighthizer, in a late-afternoon announcement Nov. 28, said that's not fair. “China’s policies are especially egregious with respect to automobile tariffs," he said. "Currently, China imposes a tariff of 40 percent on U.S. automobiles. This is more than double the rate of 15 percent that China imposes on its other trading partners, and approximately one and a half times higher than the 27.5 percent tariff that the United States currently applies to Chinese-produced automobiles." He said that at the president's direction, "I will examine all available tools to equalize the tariffs applied to automobiles."

A committee meeting at the World Trade Organization on agriculture focused on heavy subsidies to farmers in both the developed and developing world, with particular criticism of India by the U.S. and Australia, according to a summary of the meeting held Nov. 27 in Geneva. The U.S. repeated its complaint about cotton (see 1811130032), and was backed by Brazil, the European Union and Australia. India said the U.S. was not justified in linking domestic support to exports of cotton. New Zealand sided with India, saying that rich countries also distort agriculture economics through subsidies. The U.S. also questioned India on an increased tariff on milk whey powder, from 20 percent to 40 percent. India said the higher tariff is still under its bound tariff rate. The EU complained India repeatedly raises tariffs to restrict trade, and that the gap between the applied tariff and the WTO-bound rate is a problem. The U.S. wanted to question Ghana about import requirements on poultry, but no representative was in the meeting from that country.

The top-ranking Democrat in trade in the House of Representatives, and a man who once chaired the Ways and Means trade subcommittee, wrote to the U.S. trade representative and the U.S. labor secretary, asking them to push Mexican labor authorities to ensure that a labor election Nov. 29 is free and fair. There are 2,741 workers in Mexico at an Indian-held conglomerate who have the opportunity to choose a new union. The last time they voted, in 2012, worker chose to stay with an employer-sponsored union. The firm makes wire harnesses for U.S. automakers, the congressmen said. "This case is emblematic of Mexico's longstanding failure to afford workers the democratic right to choose their representatives," Rep. Bill Pascrell, D-N.J., and Rep. Sandy Levin, D-Mich., wrote Nov. 28. "We ask that you work with the Mexican labor authorities to underscore the importance of this particular election and highlight the critical importance of effectively enforcing workers’ rights to the success of a renegotiated NAFTA."