Mara Lee

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.

A former Office of the U.S. Trade Representative deputy predicted that the president of China and President Donald Trump would meet in the middle at the G-20 in Argentina, neither resolving the problems between the two countries nor declaring an impasse. He did not sound as confident that some kind of progress would be enough to halt the escalation in tariffs. "I think the signals from both countries are [that] they know this is an opportunity," Robert Holleyman said, as he opened a Nov. 28 Tariff Town Hall sponsored by tuna canneries. "I hope this gets us out of the current morass."

Karen Dunn Kelley's nomination to be deputy secretary of Commerce was approved by the Senate Nov. 28 by a 62-38 vote. She is being promoted from under secretary of Commerce for economic affairs, and had been acting deputy secretary.

President Donald Trump, still upset about General Motors' plans to shutter assembly plants in Michigan and Ohio, and transmission plants in Michigan and Maryland, tweeted that if the tariff on cars matched the one on light trucks, "many more cars would be built here," and GM would not be closing the plants. "Get smart Congress," he tweeted on Nov. 28. "The President has great power on this issue - Because of the G.M. event, it is being studied now!"

Sen Rob Portman, R-Ohio, predicted on Nov. 28 that a plan toward ending the steel and aluminum tariffs on products from Canada and Mexico will come before Nov. 30. "My sense is Mexico might not sign [the new NAFTA] at the end of this week unless there's some sort of resolution," he said to a group of about 35 at the Hudson Institute. The Mexican ambassador has said his country would sign without a resolution on the tariffs, as long as there is a clear path to reach one (see 1811200036). But as far as preventing Section 232 tariffs on autos -- a matter of great concern for the EU and Japan -- Portman suggested he is powerless to even get a hearing on his related bill. "If you have any influence with the Ways and Means Committee and Senate Finance Committee," he told the audience, he would like them to use it. "We need a hearing."

An aluminum manufacturer, aluminum consumers and the head of the dairy processors' lobby told reporters and congressional staff members that they don't want quotas as a resolution to the metals tariffs on Canada and Mexico -- even if those quotas have "head room" above current production, as they said is rumored.

Miller Baker, co-chair of McDermott, Will & Emery's appellate practice, will have his nomination for the Court of International Trade considered by the Senate Judiciary Committee during a Nov. 28 hearing. Baker once served as counsel to Judiciary Committee Chairman Orrin Hatch, R-Utah. Also during the hearing will be consideration of the nomination of Timothy M. Reif, a senior adviser in the Office of the U.S. Trade Representative, for elevation to the CIT. He previously was general counsel at USTR, and chief international trade counsel to the House Ways and Means Committee.

China will be hurt more than the U.S. by their trade war, but growth will be dampened in both countries, according to a recent report from the Organization for Economic Cooperation and Development. The OECD forecasts that the Chinese GDP will drop by .5 percentage point if the current U.S. tariffs that are set to rise from 10 percent to 25 percent do so on Jan. 1; it will drop by 1 percentage point if tariffs are levied by the U.S. on all Chinese exports. And, business uncertainty could cause a drop of 1.3 percentage points, the Nov. 21 report suggested.

The World Trade Organization's Dispute Settlement Body is establishing panels to review seven countries' complaints about Section 232 tariffs on steel and aluminum, as well as panels on Chinese, Canadian, Mexican and European retaliatory tariffs in response to those tariffs. The countries that requested a WTO verdict about the U.S. action include China, Canada, Mexico, Norway, Russia, Turkey and the European Union. All said that the tariffs, claimed as necessary to protect national security, are really safeguards, but the U.S. did not follow safeguard rules. The retaliatory tariffs, aimed to mirror the cost of the tariffs, are illegal, the U.S. argues. Countries hit by safeguard tariffs can raise tariffs in response, but only after a WTO panel says they can.

The Office of the U.S. Trade Representative released a 53-page update to the Section 301 investigation that says there has been no fundamental change in China's "acts, policies, and practices related to technology transfer, intellectual property, and innovation, and indeed [it] appears to have taken further unreasonable actions in recent months." This Nov. 20 report, which comes 10 days before USTR Robert Lighthizer, President Donald Trump and other administration officials meet with China's president and negotiators, seems to counterbalance Trump's sunnier tone of late (see 1811190032).