Biden, in first trade move, reimposes a Trump tariff

 

In one of his first trade actions, President Joe Biden on Monday night reinstated a 10 percent duty on aluminum imports from the United Arab Emirates that President Donald Trump removed just one day before leaving office.

"I consider it is necessary and appropriate in light of our national security interests to maintain, at this time, the tariff treatment applied to aluminum article imports from the United Arab Emirates," Biden said in a new proclamation.

What it could mean: The move may indicate that Biden, a Democrat, is eager to demonstrate his toughness on trade to deny Republicans any opening to outflank him on the issue as Trump managed to do against Hillary Clinton in the 2016 election.

The bigger picture: The move casts a pall over the hopes in the business sector in the U.S. and in Europe that Biden would roll back the tariffs that Trump put on steel and aluminum imports using Section 232 of the 1962 Trade Expansion Act. That provision allows the president to restrict imports to protect national security.

READ ENTIRE POST

 

92 Percent of Trump’s China Tariff Proceeds Has Gone to Bail Out Angry Farmers

Ben Steil and Benjamin Della 

“China” is “paying billions and billions of dollars” on U.S. tariffs, President Trump said in his debate with Joe Biden on October 22. “And you know who got the money? Our farmers. Our great farmers.” He is half right.Since 2018, the president has repeatedly insisted that China pays the tariffs he has imposed on Chinese imports. This claim is false—the tariffs are paid entirely by U.S. importers. His advisers, such as Peter Navarro, knowing the claim is false, have tried to defend him, and the tariffs, by arguing that China pays the tariffs indirectly, through currency depreciation and lowering export prices. These arguments are also false, as well as illogical—since the advisers also claim that such Chinese behavior benefits China and hurts the United States. The president’s statements do, however, check out on his other point. American farmers have indeed laid claim to nearly all his China tariff revenue, which now totals $66 billion. In 2018 and ’19, Trump authorized payments to U.S. farmers of $28 billion to offset their losses from Chinese trade retaliation. This year, with farmers struggling under the twin crises of the trade war and the pandemic, bailouts have soared way higher. Trump promised angry farmers another $19 billion in April and $14 billion in September—bringing his bailouts to a grand total of $61 billion. He has pledged to continue these bailouts until the trade war ends. That trade war has cost U.S. companies many billions in new import taxes (while undermining their competitiveness and increasing consumer prices), yet it has earned the government far less. As the chart above shows, payouts to farmers battered by Chinese retaliation have eaten up over 92 percent of the trade-war tax proceeds. The president is therefore right when he says farmers “got” his tariff money. That money came not from China, however, but from taxes he imposed on Americans...MORE 

WTO Finds that U.S. Tariffs on China Breach Global Trade Rules

The World Trade Organization ruled on Tuesday that tariffs imposed by the United States on more than $200 billion of Chinese products in 2018 were inconsistent with global trading rules. A three-person panel ruled that Washington had not shown why the tariffs, imposed after an investigation into forced transfer of technology and intellectual property, were a justifiable exception to Washington's obligations. The panel found that the duties were inconsistent with trading rules because they applied only to China and were above the maximum rates to which the United States had committed. It also found that the United States had not adequately explained the choice of products hit by the tariffs, or why the measures were necessary based on what Washington saw as Chinese companies' misappropriation and unfair competition. "...The Panel recommends that the United States bring its measures into conformity with its obligations...," the report said. The panel added that it had only looked into the U.S. measures and not China's retaliation, which Washington has not challenged at the WTO. Noting "unprecedented global trade tensions", the three-person panel encouraged the two sides to work to resolve the overall dispute. “This panel report confirms what the Trump Administration has been saying for four years: The WTO is completely inadequate to stop China’s harmful technology practices,” U.S. Trade Representative Robert Lighthizer responded in a release. “Although the panel did not dispute the extensive evidence submitted by the United States of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct. The United States must be allowed to defend itself against unfair trade practices, and the Trump Administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers. It is important to note that this report has no effect on the historic Phase One Agreement between the United States and China, which includes new, enforceable commitments by China to prevent the theft of American technology.”...MORE

China Halts Some U.S. Farm Imports, Threatening Trade Deal

Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates the ongoing escalation of tensions with the U.S. over Hong Kong, according to people familiar with the situation. State-owned traders Cofco and Sinograin were ordered to suspend purchases, according to one of the people, who asked not to be identified discussing a private matter. Chinese buyers have also canceled an unspecified number of U.S. pork orders, one of the people said. Private companies haven’t been told to halt imports, according to one of the people. The halt is the latest sign that the hard won phase-one trade deal between the world’s two biggest economies is in jeopardy. While Chinese Premier Li Keqiang last month reiterated a pledge to implement the agreement that was inked in January, tensions have continued to escalate since then amid a standoff over Beijing’s move to tighten its grip on Hong Kong. The measures to halt imports come after President Donald Trump on Friday lobbed a barrage of criticism at Beijing after it moved to impose controversial new national security legislation on Hong Kong. Critics say it will crack down on dissent and undermine the “one country, two systems” principle that has kept Hong Kong autonomous of the mainland since the 1997 handover from the British. Cofco and Sinograin are China’s key importers of farm goods. They had been making pricing inquiries for 20 to 30 cargoes of U.S. soybeans on Friday but held off on going through with purchases after Trump indicated he would punish Chinese officials, one of the people said. Beijing is waiting to see what steps Trump takes before deciding its next move, one of the people said...MORE

Coronavirus: US-China blame game prompts Beijing hawks to ramp up criticism of phase one trade deal

Hours after top negotiators finished up their first teleconference since the US-China phase one trade deal was signed in January, a blog thought to have ties to officials in Beijing published an aggressive attack on Washington’s perceived muddying of the agreement with the row over coronavirus. A few days later, the Global Times – a tabloid newspaper published by the People's Daily, the Communist Party's mouthpiece – published an English language-only article saying “sources close to the Chinese government” and “a former Chinese trade official” were “calling for new negotiations and a tit-for-tat approach on spiralling trade issues”. Neither outlet said the trade deal, barely a few months old, was doomed. Indeed, both trumpeted the importance of the accord. But the articles show the division that the phase one deal has sewn in Beijing. As in Washington, the deal was not without its detractors in China, even during the negotiating period, as indicated by the dramatic collapse in talks last May, when perceived hardliners in Beijing reacted after seeing the proposed text of the deal for the first time. Worsening US-China ties over the spread of coronavirus this year have not helped change the minds of the naysayers, even if few believe the Chinese government is serious about renegotiating. Instead, the coronavirus dispute has given a platform for hawks on both sides of the agreement...The business end of the trade deal is also not progressing according to plan. China is well behind on its purchasing targets outlined in phase one, which commits it to buying US$200 billion more US products over two years than it did in 2017. Data wire Agcensus reported that Cofco and Sinograin, China’s state-owned soybean crusher and stockpiler, have started to buy soybeans in bulk in recent weeks, including 400,000 metric tonnes this week alone and 2.3 million metric tonnes since April 20. But other products have not fared so well, with purchases of corn and wheat slowing after a small spike in March and ethanol purchases behind 2017’s baseline levels. Purchases have “tailed off as the US rhetoric around who is responsible for the Covid-19 outbreak has ramped up,” Agcensus said. “China’s purchases of US products so far this year are running below levels in either 2017 or 2019. The gap is large for soybeans, transport equipment, and energy. China is still buying sophisticated manufactured products, such as electrical and specialised machinery, at rates higher than we have seen in the past. This might be because China has fewer alternatives to US products for specialised equipment,” read a report from S&P Global on Wednesday...MORE

New North American trade pact to take effect July 1

U.S. Trade Representative Robert Lighthizer on Friday said he has notified Congress that the new U.S.-Mexico-Canada trade agreement will take effect on July 1, a month later than initially proposed. In a statement, Lighthizer said both Mexico and Canada had taken measures necessary to comply with their commitments under the U.S.-Mexico-Canada Agreement (USMCA), which replaces the 26-year-old North American Free Trade Agreement (NAFTA). Some industries, including automakers, had been arguing for a delayed implementation because of the difficulties they are facing from the coronavirus pandemic. Mexico had asked the United States and Canada for a longer transition period for the auto industry to certify that it was meeting new, more stringent North American content rules. Lighthizer said his office would work to ensure a smooth implementation of the new trade rules...MORE

Canada approves North American trade deal

Canada on Friday formally approved the United States-Mexico-Canada Agreement (USMCA), taking the last legislative step to implementation of the deal to replace the 25-year-old North American Free Trade Agreement (NAFTA). The trade deal, ratified by the Mexican legislature last June and by Congress in January, was formally ratified by the Canadian Senate Friday, and shortly thereafter received royal assent, the Canadian governor general's approval. With royal assent, the USMCA has cleared its last continental legislative hurdle to become the law of the land in all three signatory countries. Canadian approval kicks off a three-month period for all three signatory countries to agree on implementation regulations, including naming each country's representatives for the conflict resolution mechanism...MORE

China Lifts Import Restrictions on U.S. Farm Goods

U.S. officials said Tuesday that Chinese leaders have taken the first steps toward implementing the first phase of a trade deal between the world's two largest economies, an announcement that comes amid concerns that the coronavirus could delay the pace of China's promise to purchase more U.S. crops and other goods. In a statement, U.S. officials noted that Chinese leaders have lifted import restrictions on U.S. poultry and poultry products and pet food, along with other actions, since the deal took effect on Feb. 14. Those provisions were part of a 90-page written agreement signed last month. The deal calls for China to increase its purchases of U.S. agricultural products by $32 billion over a two-year period. Tuesday's statement didn't say how much China has agreed to purchase of its roughly $200 billion goal so far. Meanwhile, China has begun announcing tariff exclusions for U.S. imports that were hit with retaliatory tariffs. Before the deal, both countries put tariffs on imported goods. U.S. officials later agreed to lift a portion of those tariffs, but the deal left in place U.S. tariffs on about $370 billion in Chinese goods, or about three-quarters of Chinese imports to the U.S. Since the deal was announced, trade experts have questioned whether China will follow through with its purchase pledges and say the deal's potential failure has the power to sway rural voters in an election year. They have also questioned whether the spreading coronavirus could derail the deal, which calls for China to purchase more goods over the two-year period. Earlier this month, White House National Economic Council Director Larry Kudlow said he expected the fallout from the deadly coronavirus to delay -- but not derail -- the economic boost the U.S. anticipated from the deal. Any purchase delays by China, however, could be made up with a surge of buying later...MORE

The Biggest Fan of Trump’s Steel Tariffs Is Suing Over Them

John Hritz, president and chief executive officer of JSW Steel USA Inc., put on a big smile and a Texas flag pin for his television spot on Fox Business in March 2018. “It’s a special day,” he told his host, then told her again: “It’s a special day.” JSW Steel’s India-based parent company, JSW Group, had announced it would invest $500 million and create 500 jobs at its steel mill in Baytown, Texas. “We’re going to make history,” Hritz said. Hritz was counting on help from President Trump, who three weeks earlier had announced his intention to impose tariffs of 25% on steel and 10% on aluminum imported to the U.S. The Fox anchor wondered if the import levies might interfere with JSW’s Baytown plan, given that much of the raw steel processed at the mill was imported from India and Mexico. “Absolutely not,” Hritz said. On the tariffs, JSW was “in lockstep with the president and with the administration.” Not so much anymore. A big piece of the Baytown project has been postponed indefinitely, in part because of Trump’s tariffs. Both Baytown and a sister plant in Ohio, where JSW once planned to invest another $500 million, have been operating at unprofitably low production levels, also owing in part to the tariffs. JSW has sued the administration for refusing to exempt it from paying the levies on the massive slabs of steel the company imports and turns into pipe and other products for industrial use. “It’s the hypocritical nature of these tariffs that’s completely dumbfounding us,” says Parth Jindal, director of JSW Steel USA and managing director of JSW Cement Ltd. in India. “It just doesn’t add up.” As Hritz sees it, JSW set out two years ago to do precisely what Trump and his trade hawks said the tariffs would help accomplish: reestablish the U.S. as a premier producer of steel. Hritz told the online trade publication Fastmarkets AMM after the tariffs were put in place, “We are following right down the road where the administration wants things to go … to completely overhaul the steel industry in this country.” But the revolution has been delayed by a bureaucratic morass at the U.S. Department of Commerce and, possibly, political weight thrown around by two of steel’s heaviest heavies: United States Steel Corp. and Nucor Corp...MORE

China slashes tariffs on $75 billion worth of US goods including soybeans and cars

China on Thursday announced it would reduce tariffs on thousands of American products, signaling intentions to implement an interim trade agreement with the US as a costly virus epidemic escalated. Retaliatory tariffs will be reduced on $75 billion worth of US products, including soybeans, oil, and automobiles, beginning February 14, China's finance ministry said. Some of those imports will face tariffs of 2.5% to 5%, as opposed to the 5% to 10% rates imposed in September and December. "The next steps depend on the development of the Chinese-US economic and trade situation," the finance ministry said in a statement. "We hope to work with the United States toward the final elimination of all tariff increases." Under the phase-one trade agreement, China agreed to tighten its intellectual-property rules and purchase $200 billion worth of US products over two years, ambitious stipulations that experts had questioned. Tariffs remain on thousands of other products from the US and China, which plan to continue negotiating a broader economic agreement in the coming months...MORE

And from China’s tariff cuts include fruits, nuts

China is cutting in half tariffs on U.S. fruit and other goods imposed in September and December last year, but leaving in place heftier tariffs imposed in 2018. The Feb. 6 move by China is a small first step in providing tariff relief for U.S. fruit and nut exporters, industry leaders said. The cuts are effective Feb. 14. Mark Powers, president of the Northwest Horticultural Council, said in an e-mail that no specific tariff reductions have been confirmed by the U.S. government. However, Powers said initial reports point to a 5% reduction in tariffs on U.S. fruits and nuts. “That small reduction – from 60%- will not be of much help to fruit exporters,” Powers said in an e-mail. China’s announcement of a reduction in tariffs on $75 billion of U.S. goods appears to structured to cut in half tariffs that China imposed in September and December (from 10% to 5% and from 5% to 2.5%), said Richard Owen, vice president of global membership and engagement for the Produce Marketing Association. Fruit and nuts from the U.S. were included in those September and December rounds, he said, so the cuts could help U.S. suppliers be more competitive again in the China market.On Sept. 1 last year, U.S. apples, pears, citrus, cherries and other fruit were subject to an additional 10% tariffs, adding to the 40% retaliatory tariff imposed by China in July 2018. U.S. exports have suffered under the weight of the tariffs. U.S. Department of Agriculture trade statistics show U.S. cherry exports to China in 2019 were $75 million, down 17% from 2018 and off 39% from 2017. U.S. citrus exports to China in 2019 were $23 million, off 56% from 2018 and down 54% from 2017...

The Phase One U.S.-China Trade Deal Is A Serious Win For The United States

Helen Raleigh

Last week, both the White House and the U.S. Trade Representative’s Office posted the full text of the agreement, immediately after Chinese representative Liu He and President Donald Trump signed it. Upon reviewing the 96-page document, I have to admit, I was wrong. This Phase One deal, although still leaving many strategic goals unfulfilled, is a much better deal to the United States than I initially thought.
 The mainstream media has been focusing on the additional amount of U.S. goods and services China has committed to purchase as the highlight of the agreement. However, they have missed the point. This agreement doesn’t start with China’s additional purchasing commitment, but with two top concerns in American businesses: intellectual property rights theft and forced technology transfer. The way this agreement is structured illustrates that, despite Trump’s rhetoric on trade imbalance, he values the ability to protect U.S. intellectual property rights and technology more than America’s additional exports.
Strong Intellectual Property Protection and Enforcement
The first chapter of the agreement is on intellectual property, and at 20 pages long, it is by far the longest chapter. It is incredibly detailed and covers a wide spectrum of topics, including trade secrets, confidential business information, pharmaceutical data, patents, piracy and counterfeiting on e-commerce platforms, manufacture and export of pirated and counterfeit goods, etc...
...This is a huge improvement from the status quo, in which Chinese government officials often demand that American businesses hand over key technological know-how when they apply for licenses to operate in China or conduct other investment activities. Chinese government officials are also known to demand that American businesses disclose information about key equipment during routine visits to business sites in China.
Huge Increase of U.S. Exports
Before the contents of the trade deal became public, the media reported only that China would increase its imports of U.S. agriculture produce to about $40-$50 billion over two years. This led many to question whether President Trump started his trade war with China and put the global economy through more than 18 months of uncertainty only for soybeans.
Now we have learned China pledges to purchase way more than soybeans. In fact, China has committed to increase imports of U.S. goods and services by no less than $200 billion over the course of two years, between Jan. 1, 2020, and Dec. 31, 2021. According to the trade agreement, the purchase increase will come from four industries: $77.7 billion worth of manufactured goods, $52.4 billion worth of energy, $32 billion in agriculture, and $37.2 billion in services. Moreover, the agreement expects such increases to “continue in calendar years 2022 through 2025.”
Keep in mind that before the U.S.-China trade war started, U.S. exports to China were only about $130 billion in 2017. Expansion of U.S. exports to China, as the trade deal mandates, is unprecedented and will be a huge boost to the U.S. economy for several years to come...

READ ENTIRE COLUMN

Here’s what’s in the phase one China trade deal Trump is signing this week

U.S. and China trade representatives will end years of intense bilateral negotiations with a “phase one” deal on Wednesday that promises billions of dollars’ worth of agricultural purchases and the beginning of reforms to China’s longstanding practice of forced technology transfer. For all the pomp and circumstance expected at the signing ceremony — and repeated assurances from American negotiators — many are still unsure of exactly what the two nations are agreeing to. On paper, the deal includes a “dramatic expansion of U.S. food, agriculture and seafood product exports” as well as an agreement by China to end its long-standing practice of forcing or pressuring foreign companies to transfer their technologies to Chinese companies, according to a U.S. Trade Representative document. The USTR has also said the deal reiterates U.S. opposition to currency manipulation and a commitment by China to buy at least $200 billion in U.S. exports over two years including manufactured goods, food, agricultural, energy products and services. Estimates of the value of goods by industry the White House believes Beijing will buy include about $80 billion in manufactured goods, $53 billion in energy, $32 billion in agriculture and $35 billion in services. For Don Roose, president of Des Moines, Iowa-based brokerage U.S. Commodities, China’s commitments to farm purchases are key. “We’re anticipating $35 billion [of farm purchases] the first year and $40 billion in the second,” he said. “It doesn’t look like we’re creating any new world demand.” But unresolved, Roose said, is whether the Chinese will — after years of haggling — actually end up buying more U.S. farm goods than before President Donald Trump opened the trade spat nearly two years ago. Still, Roose said he was slightly more optimistic with a phase one deal nearly signed...MORE

Trump’s trade deal with China won’t give many U.S. companies relief, as most tariffs will remain

From the Rust Belt to the Pacific Northwest and from the Gulf Coast to Niagara Falls, the outlook could not have been brighter for American chemical companies. Then President Trump nearly two years ago launched his trade war with China. On Wednesday, Trump and Chinese Vice Premier Liu He are scheduled to sign a partial trade deal, calling a truce in a conflict that has shaken the global economy. Yet as the chemical industry’s experience shows, many of the trade war’s casualties have been left on the battlefield. Even as the White House celebrates the president’s negotiating accomplishment, the “phase one” deal offers little relief for countless American businesses — including chemical makers, apparel retailers and auto parts manufacturers — that will still face the same punishing tariffs they have confronted for some time. “There was an assumption that this was a short-term situation,” said Ed Brzytwa, director for international trade at the American Chemistry Council, an industry group. “We’re now at the point where we’re telling our members they should expect these tariffs are going to stay in place for a long time. This has become the new status quo for us.” In March 2018, when the president began imposing tariffs on Chinese goods — in a bid to force Beijing to abandon its discriminatory trade policies — chemical companies were building dozens of new plants and creating tens of thousands of good-paying jobs around the country. Thanks to inexpensive shale gas, American chemical makers finally were poised to shed their high-cost reputation and become the world’s preferred supplier. But among the targets of the president’s tariffs were the Chinese raw materials that American plants use to produce industrial chemicals and plastics. China retaliated with its own import taxes, closing off the industry’s fastest-growing export market...MORE

Champagne, cheese to get more expensive in New Year if Trump imposes tariffs

That glass of champagne being raised to welcome in the New Year is about to get a lot more expensive. Absent a major breakthrough in trade negotiations with France, the Trump administration is preparing to raise tariffs on a host of French products – including cheeses, wines and champagne – by mid-January. That move might result in a 100% tax increase on France’s key exports in response to a pending digital tax imposed by Paris. The U.S. move would severely impact the French wine industry and hit its sparkling wine varieties, which amount to over $775 million in exports to the United States each year, particularly hard. American wholesalers, restaurateurs and business owners are warning the White House that its next round of tariffs could have a ripple effect well beyond the wine belt. “These tariffs on EU wines and spirits are going to impact consumers across all price points, from entry-level spirits to luxury level,” Michael Bilello, a senior vice president at Wine & Spirits Wholesalers of America, told McClatchy, warning it could cost significant American jobs. “We’re talking about a trade with 88,000 American jobs, over 370 family-owned American businesses in over 3,000 locations nationwide – across every state and in every congressional district.” The liquor industry has been fiercely opposed to Trump’s tariff plan, warning it could impact consumer behavior in a thriving market. The Distilled Spirits Council of the United States, the Kentucky Distillers’ Association, and the American Craft Spirits Association have all come out against the tax increase.  In October of this year, the Office of the U.S. Trade Representative imposed a 25% tariff on select wines from France, Spain, Germany and the United Kingdom. That round excluded sparkling varieties and wines with over 14% alcohol. But the next round threatens to increase tariffs on all varieties, as well as goods such as cosmetics, handbags and cheese – a total of over $2.4 billion in annual French imports. It is a response to France’s intention to proceed with a plan that would compel major digital companies, including American giants such as Google, Facebook and Amazon, to pay more in taxes for their operations in France. French officials believe the large tech companies have circumvented tariffs for years by developing headquarters in low-tax European capitals, and several other European governments – including the United Kingdom and Italy – are also debating imposing digital taxes. But French diplomats fear that Paris has now been disproportionately targeted by the Trump administration because it would be the first in Europe to proceed with a policy to close the loophole...MORE

What kind of deal is this? I'm going to have to pay higher taxes so Google, Facebook & Amazon won't have to pay higher taxes?

Farm Bureau: USMCA Is a Victory for Farmers and Ranchers

The following statement may be attributed to American Farm Bureau Federation President Zippy Duvall:
“Farm Bureau commends the House for approving the United States-Mexico-Canada Agreement. It was a bipartisan effort as shown by the overwhelming 385 to 41 vote, and we appreciate the work of members of Congress on both sides of the aisle in getting this deal done.
“This trade agreement could not come at a more critical time for U.S. agriculture. Farmers and ranchers have been hit with a perfect storm of low commodity prices, weather disasters, trade disruptions and a severe downturn in the farm economy. The USMCA will provide continuity in the growth of the North American market and will strengthen our trading relationships with Canada and Mexico, which are our number-one and number-two export markets, respectively.
“We are hopeful that USMCA can be a model for future U.S. trade agreements, as these modernized rules will be a strong guide for addressing continuing issues. We urge the Senate to quickly approve the USMCA.”
USMCA BACKGROUND
Designed to replace the North American Free Trade Agreement, the USMCA builds on important trade relationships in North America.

• The agreement is expected to increase U.S. ag exports by $2 billion and result in a $65 billion increase in gross domestic product.
• The agreement will provide new market access for American dairy and poultry products while preserving the zero-tariff platform on all other ag products.
• In particular, the agreement gives U.S. dairy products access to an additional 3.6% of Canada’s dairy market – even better than what was proposed in the Trans-Pacific Partnership trade agreement.
• U.S. wheat will receive fairer treatment, thanks to Canada’s agreement to grade our wheat no less favorably than its own.
• Mexico and the United States have also agreed that all grading standards for ag products will be non-discriminatory.
• Additional provisions enhance science-based trading standards among the three nations as the basis for sanitary and phytosanitary measures for ag products, as well as progress in the area of geographic indications.
• The agreement also includes measures that address cooperation, information sharing and other trade rules among the three nations related to agricultural biotechnology and gene editing.

Press Release

US and Mexico say trade deal is on track after last-minute objections

Top trade negotiators from both the United States and Mexico reaffirmed Monday that the US-Mexico-Canada Agreement, known as USMCA, is a done deal -- despite complaints from Mexico over the weekend about a labor provision included in the bill unveiled by Democrats. The trade agreement is still headed for debate and a vote in the US House later this week. The Senate is expected to take it up in January after impeachment. Mexico's Undersecretary for North America, Jesus Seade, rushed to Washington to meet with trade officials Monday, after writing to US Trade Representative Robert Lighthizer to say he was "surprised" about the modifications to the USMCA, which has already been ratified in its original form by both Mexico and Canada. But on Monday, Seade said he was "very satisfied" with the new terms. At issue was a labor provision added in negotiations between Lighthizer and House Democrats that designates up to five inspectors from the United States Department of Labor to be stationed in Mexico working on implementing labor reform. Mexican officials said they were not consulted on this addition. But Lighthizer clarified Monday that the five US workers would be providing technical assistance, disbursing capacity building funds, and providing assistance to a new US government interagency labor committee. "These personnel will not be 'labor inspectors' and will abide by all relevant Mexican laws," he wrote in a letter to Seade, which his office made public. At a press conference in Washington on Monday afternoon, Seade said he was pleased with the terms laid out in Lighthizer's letter regarding the five US workers...MORE

Mexico fumes over labor enforcement details in trade bill

Mexico's top trade negotiator plans to return to Washington on Sunday to express his outrage over language in the U.S. bill to implement the new North American trade agreement, potentially complicating the House's plans to pass the USMCA this week. Mexico was blindsided by the inclusion of language in the implementing bill that would allow the Trump administration to deploy full-time diplomats to Mexico to make sure the country is upholding labor standards, Jesús Seade, Mexico’s undersecretary for North America, said Saturday. Seade said he will return to Washington on Sunday to meet with U.S. Trade Representative Robert Lighthizer. Those provisions in the U.S. bill for the new North American trade pact are “unnecessary and redundant,” Seade said at a press conference in Mexico City. Story Continued Below Seade’s office confirmed to POLITICO that he is scheduled to meet Lighthizer on Monday. He will also meet with Democratic lawmakers to discuss the issue. “For obvious reasons, Mexico was not consulted on this. We are not in agreement,” Seade said at the press conference. “This is not the fruit of our bilateral negotiation.” "This has effects within our country and we should have been consulted," Seade said, adding that it's standard for a foreign country to be made aware about plans to deploy diplomats to its country. In a letter to Lighthizer ahead of the trip, Seade threatened that Mexico would evaluate its options to establish "reciprocal mechanisms in defense of our country's interests." Mexico quickly ratified the proposed changes to the deal on Thursday night before the Trump administration delivered the 239-page implementing bill to Capitol Hill on Friday afternoon. Senior House Democrats expect a vote on the deal could come Thursday, the day after the chamber is expected to vote on impeachment and the day before members leave on their holiday recess...MORE

This is part of the concessions that Trump gave to the Democrats and the Unions.  .

US: China agrees to $40-50 billion in annual ag purchases for two years

China has agreed to purchase $40 billion to $50 billion in U.S. agricultural commodities annually for two years as well as remove significant ag trade barriers, a senior Trump administration official told reporters Friday. The exact text of the “Phase One” deal is not yet ready for publication, but U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He are tentatively scheduled to sign the finalized document in the first week of January, the administration official said. “In the agriculture area, we’re looking at commitments to make purchases in each of the next two years of $40 to $50 billion … Those are going to be significant increases,” the official said. The U.S. exported a record $26 billion worth of ag to China in 2012. “We’re really excited,” American Farm Bureau Federation President Zippy Duvall told Agri-Pulse, but he said he wants to see the text of the deal. “A promise is a lot different than getting it in writing, so we’ll be looking forward to getting the details.”...MORE

Pass USMCA Coalition drops stance on passing USMCA; Pelosi 'we ate their lunch'

A business-backed trade group established to back President Trump’s United States-Mexico-Canada Agreement (USMCA) has backed off from taking a position on the treaty following compromises made by the White House in its negotiations with House Democrats. The group, called the Pass USMCA Coalition, objected to changes in the North American trade treaty related to pharmaceuticals, a major concession point sought by Democrats. “As originally written, USMCA was a win for American workers, businesses, and innovators -- and could have been a model for future agreements,” the group wrote in a statement reacting to the updated deal, which was announced Tuesday. “The unnecessary decision to strip certain intellectual property protections is particularly concerning, as it puts American scientists and creators at a serious disadvantage abroad,” it added...following the release of the compromise deal, which earned the support of the AFL-CIO labor union, the group has backed off the pro-USMCA position in its name. Although the updated treaty is expected to pass with broad bipartisan support, some in the GOP have expressed consternation that the White House had allowed the deal to drift too far to the left. Sen. Pat Toomey (R-Pa.) said the deal was worse than the current trade pact with Canada and Mexico, the North American Free Trade Agreement. Speaker Nancy Pelosi (D-Calif.), on the other hand, told her caucus earlier in the week that “we stayed on this and we ate their lunch.”...MORE

 

Trump Signs Phase One China Trade Deal, Avoiding Brutal December Tariffs

Topline: President Donald Trump has signed off on a phase one trade deal with China, crucially avoiding a looming December 15 tariff deadline, after negotiators from both sides agreed upon terms earlier on Thursday, Bloomberg first reported.

• The U.S. and China agreed upon terms for the so-called phase one deal, with Trump signing off on the deal later in the day, leading Wall Street investors to rejoice.
• After months of drawn out negotiations to hammer out the terms of the phase one deal, first announced in October, the news sent the stock market surging to new records: The S&P 500 and Dow Jones Average were both up by around 0.80% on Thursday.
• The deal reportedly includes promises by China to buy more U.S. farm goods, Bloomberg reported.
• According to a report from the Wall Street Journal, U.S. negotiators have offered to slash existing tariffs, which cover roughly $360 billion of Chinese goods, by 50%.
• The U.S. will also cancel the next round of China tariffs, planned to take effect on another $156 billion of Chinese goods on December 15, the report said.
• Included in the deal is a promise made by China to do more to stop intellectual property theft, and both sides agreed to refrain from purposely manipulating their currencies...MORE