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This Week In Trade

Trump touts the benefits of tariffs as China 301 decision looms

Posted: September 17, 2018

President Trump kicked off the week by touting what he sees as the benefits of tariffs on imported goods, with reports suggesting the administration will soon announce it is moving forward with new duties on $200 billion in Chinese goods.

“Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country -- and yet cost increases have thus far been almost unnoticeable,” the president tweeted early Monday morning. “If countries will not make fair deals with us, they will be ‘Tariffed!’”

The Washington Post reported on Saturday that Trump had decided to move forward with the tariffs on Chinese goods, saying an announcement would come in the next few days. According to the report, the tariffs will be set at 10 percent -- the initial rate announced by USTR -- rather than the 25 percent rate Trump asked the Office of the U.S. Trade Representative to consider as well. A notice-and-comment period for the 25 percent tariffs concluded earlier this month.

Immediately after endorsing tariffs as an economic remedy, Trump touted the strength of the U.S. steel sector, which has benefited from Section 232 tariffs placed on steel imports earlier this year.

“Our Steel Industry is the talk of the World. It has been given new life, and is thriving. Billions of Dollars is being spent on new plants all around the country!” he said in a follow-up tweet.

According to figures released by the American Iron and Steel Institute last week, year-to-date steel shipments through the end of July were up 4.3 percent from the same period last month. However, July shipments were down 1 percent from June.

Trump’s tweet touches on a sector that will be the central focus of discussions in Paris this week as the Global Steel Forum on Excess Capacity is set to meet on Thursday. The ministerial meeting will be preceded by working-level meetings on Wednesday. Thursday’s meeting will be the first ministerial gathering of the group since November 2017, when the forum released its report on excess steel capacity. That report was much maligned by the U.S. for not highlighting “the recurring failure of some countries to implement true market-based reforms in the steel sector,” USTR Chief of Staff Jamieson Greer said at the time.

USTR could not be reached by press time about who would represent the U.S. at the meeting.

The ministerial forum follows on the heels of the G20 trade ministerial, which wrapped up on Friday in Mar del Plata, Argentina, with ministers agreeing to issue a ministerial statement. The ministers committed to keep markets open and “reinvigorate the international trading system,” the statement said. Deputy USTR and U.S. Ambassador to the World Trade Organization Dennis Shea represented the U.S. at the meeting.

“At a critical juncture for international trade and investment cooperation, G20 members will work together to enhance sustainable economic growth, keep markets open, address economic development and to reinvigorate the international trading system,” the statement added.

Ministers also “recognized the need to step up dialogue and actions to mitigate risks and enhance confidence in international trade,” it said -- in part by discussing ways to reform the WTO.

“We stepped up our dialogue on current international trade developments, recognizing the urgent need to discuss current events in international trade and ways to improve the WTO to face current and future challenges,” the statement said. “In this context, we discussed what the G20 can do to address the current situation in a collaborative manner. We encouraged all G20 Members individually and with other interested parties to continue to come forward with ideas to ensure that the WTO continues to be relevant.”

At a press conference on Friday in Mar del Plata, Argentine Minister of Production and Labour Dante Sica suggested the G20 dialogues could spur a resolution of the escalating trade tensions between the U.S. and China. Sica suggested the G20 meetings were opportunities for dialogue between the U.S. and China -- as well as third countries affected by escalating tariffs -- to “generate a solution.” Argentina holds the 2018 G20 presidency.

In Washington, DC, the Brookings Institution will discuss Japanese economic diplomacy during a panel on Monday. Participants include Pek Koon Heng-Blackburn, assistant professor at American University; Meredith Sumpter, head of research strategy and operations at the Eurasia Group; Shujiro Urata, professor at Waseda University; Fukunari Kimura, professor at Keio University; and Mireya Solis, director of the Brookings Center for East Asia Policy Studies.

On Tuesday, the Washington International Trade Association will host a panel on investment, sanctions and the future of export controls. Panelists include former deputy assistant secretary of State for counter threat finance and sanctions Peter Harrell, now an adjunct senior fellow at the Center for a New American Security; Chris Padilla, vice president of IBM Government and Regulatory Affairs and former Commerce under secretary for international trade; Brian Fleming, member of Miller and Chevalier and former counsel to the assistant attorney general for national security; and Clay Lowery, managing director of Rock Creek Global Advisors.

The U.S.-China Business Council will hold a discussion on Tuesday on the state of the U.S.-China commercial relationship with Craig Allen, the council’s incoming president, and Erin Ennis, USCBC’s senior vice president.

On Thursday, the U.S. Chamber of Commerce and the Association of American Chambers of Commerce in Latin America and the Caribbean will holds its forecast on Latin American and the Caribbean conference. Speakers include U.S. Chamber Senior Vice President for the Americas Neil Herrington, AACCLA Chairman José Antonio Muñoz, Honduras Attorney General Óscar Chinchilla, and Kansas City Southern President and CEO Patrick J. Ottensmeyer.

In Geneva, the WTO’s Agriculture Committee will hold a negotiating session on Thursday and Friday. The Dispute Settlement Body will hold a meeting on Friday.

Not currently scheduled this week are talks on the renegotiation of the North American Free Trade Agreement. Canadian Foreign Affairs Minister Chrystia Freeland left Washington last week without a definitive return date. Mexican chief NAFTA negotiator Ken Smith Ramos, meanwhile, said last week that Mexico was prepared to move ahead with a bilateral with the U.S. if an agreement that included Canada was not reached. -- Brett Fortnam (bfortnam@iwpnews.com)