Cause of Action Institute sued the Commerce Department "for failing to turn over public documents related to trade tariffs and tariff exemptions," the government transparency group said in an Oct. 18 news release. The group said in its complaint that Commerce failed to comply with public document requests under the Freedom of Information Act. Agencies are required to respond to FOIA requests within 20 days, but that time has elapsed and Commerce has not issued a final determination or released the records, the group said.
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
Autos and auto parts make up 25 percent of the NAFTA trade, and the head of the trade group that represents Detroit's Big 3 auto firms says they will push aggressively to get the NAFTA rewrite through Congress next year. Matt Blunt, CEO of the American Automotive Policy Council, said, "If party control changes in one of the chambers, that does make it more difficult to gain approval of USMCA, but I still think it's highly doable." Blunt is the former governor of Missouri, and his father Roy Blunt is in the Republican leadership in the U.S. Senate.
International Trade Today is providing readers with some of the top stories for Oct. 9-12 in case they were missed.
The U.S. will not meet with China to talk about trade until he's convinced they're ready to make a deal, President Donald Trump said, speaking with reporters after U.N. Ambassador Nikki Haley announced her resignation on Oct. 9 at the White House. Trump said the U.S. rebuilt China by purchasing so many Chinese goods, and that he wants to put an end to the unbalanced trading relationship. "China wants to make a deal. And I say they’re not ready yet. I just say they’re not ready yet. And we’ve canceled a couple of meetings because I just say they’re not ready to make a deal," he said. "It’s been a one-way street for 25 years. We’ve got to make it a two-way street. We’ve got to benefit also, OK?"
Withdrawing from NAFTA before ratification of the U.S.-Mexico-Canada Agreement would "trigger devastating negative economic consequences," the Koch Brothers' Freedom Partners organization told President Donald Trump in a letter sent Oct. 3. The letter, which commended the administration for reaching an agreement, said USMCA has positive elements on digital trade, e-commerce and finances, but the introduction of wage standards and stricter auto rules of origin "drive up costs for everyone while protecting only a few jobs at the expense of many others." Freedom Partners and Americans for Prosperity asked the administration to immediately drop the steel and aluminum tariffs on Mexico and Canada, and to end the threat of Section 232 tariffs on autos and auto parts.
Witnesses from the United States Council for International Business, the Aluminum Association and the International Intellectual Property Alliance say that China is not living up to its World Trade Organization commitments on many fronts, even as there are some signs of movement away from practices that damage foreign competitors.
Democrats will be crucial to ratifying a new NAFTA if House Republicans lose the majority in November, whether the deal includes Canada or not. U.S. Trade Representative Robert Lighthizer has said repeatedly that he expects significant numbers of Democrats to support the new NAFTA. Changes he won from Mexico should be good for domestic manufacturing, he believes, between bringing labor provisions into the body of the agreement and changing auto rules of origin to encourage manufacturing in the U.S. (and Canada, if it decides to join the deal).
Both Democrats and Republicans said auto tariffs aren't going to help add U.S. manufacturing, and numerous members of the Senate Finance Committee questioned the logic of the Trump administration's national security rationale for threatening them. Sen. Rob Portman, R-Ohio, noted that he has a bill that would not allow the president to act unilaterally to raise tariffs on autos or auto parts under Section 232, and that Honda North America has endorsed it. But little of the two-hour hearing focused on how Congress could take back power on trade to constrain the administration. Even committee ranking member Ron Wyden, D-Ore., who criticizes the president's trade policy as chaotic and ineffective, hedged that "perhaps" it is "time for the Congress to think about reclaiming that authority," in his opening statement.
U.S. Trade Representative Robert Lighthizer cast doubt Sept. 25 on a trilateral NAFTA coming together, saying that the parties are "sort of running out of time," because if the deal isn't done before the current administration in Mexico leaves office, the incoming president will want to reopen negotiations. The U.S. and Mexico have come to many agreements bilaterally in recent weeks.
A Canadian customs broker told a group of her colleagues from the U.S. that the last year "has been probably the most challenging year of my life." Kim Campbell, who is president of MKMarin Trade Services, fears it could get worse. If the Trump administration decides to levy tariffs on Canadian cars, car parts or uranium under Section 232, the amount of goods that now cross the border tariff-free would drop dramatically, she believes, because Canada would have to put in place counter-tariffs.