USMCA

The government subsidies to industry in China only end up supporting jobs, not cornering the market to jack up prices, nor advancing technology, a Carnegie Mellon economy professor argued at an event at George Washington University on China's economy and U.S.-China relations.

Electronic goods with Chinese components such as notebooks, laptops and modems reimported to the U.S after undergoing repairs in Mexico are still subject to Section 301 tariffs on the repairs, even though the repairs are duty free under USMCA, CBP said in a February ruling.

In more than four hours of questioning during a hearing March 24 before the House Ways and Means Committee, no member of Congress advocated for lessening tariffs on Chinese goods under Section 301, or for reopening exclusions applications.

Almost five years after the first round of 25% tariffs were put on Chinese imports, it was trade irritants with Mexico and India, as well as concerns about tariff preference programs and the lack of a market-opening strategy, that senators dwelled on during the U.S. Trade Representative's appearance in front of the Finance Committee.

The Independent Mexico Labor Expert Board said it is not prepared to say that Mexico is not in compliance with the labor obligations under USMCA, given the steps the government is taking to reform the labor laws. But, with barely more than a year before the deadline to give all workers the chance to vote for independent unions, "we are increasingly concerned that the transition period for full implementation of Mexico’s labor reform will end next May with large segments of the old protection contract system still intact, including in critical manufacturing sectors and their suppliers."

Although former Mexican officials are pleased with the conciseness and clarity of the USMCA panel ruling against the U.S. interpretation of the auto rules of origin, they have no confidence it will be followed this year.

CBP posted the following documents ahead of the March 29 Commercial Customs Operations Advisory Committee (COAC) meeting:

Ten trade groups, including the U.S. Chamber of Commerce, the National Foreign Trade Council, the Express Association of America, the American Chemistry Council and the Coalition of Services Industries, are asking President Joe Biden to bring up businesses' concerns about changes to customs procedures, chemical regulations and digital services taxes.

The office of the Mexican Economy Secretary said it agrees with the U.S. that there is reason to investigate Unique Fabricating, a Michigan-headquartered manufacturer that makes foam, rubber and plastic components such as seals, door water shields, gaskets and glove box liners. Transformation Sindical told the Office of the U.S. Trade Representative that managers at the plant in Queretaro, Mexico, denied them the ability to visit with workers at the site and give them the option of joining their union (see 2303090038). Mexico's government said March 17 that it will begin an investigation to see if workers at the plant were denied their rights to join an independent union. The USMCA Rapid Response Mechanism allows 45 days for that investigation.

Mexico is beginning consultations on how to remediate violations at Manufacturas VU, a Michigan-headquartered supplier of interior automotive trims, after its investigation found serious irregularities, and found that the company placed obstacles for its workers to choose their own union and to collectively bargain. The office of the Economy Secretary made the announcement March 16. It is the second time VU's plant in Piedras Negras has been the subject of a Rapid Response Mechanism complaint from the Office of the U.S. Trade Representative. Mexico and the U.S. have 10 days to put forward a remediation plan. So far, no fines or curtailed tariff benefits have been imposed on Mexican exporters targeted in the Rapid Response Labor Mechanism under USMCA. This is the only plant with repeated complaints (see 2301300030).