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This Week In Trade

Administration holds auto 232, GSP hearings; Congress to probe Trump trade policies

Posted: July 16, 2018

The Trump administration will hold hearings on the national security implications of auto and auto parts imports and on the products eligible for preferences under the Generalized System of Preferences, while the administration’s trade policy will be a central focus of several congressional hearings this week.

The administration is continuing to move forward with its trade agenda despite Congress’ increasingly critical view of the administration’s trade policies. For instance, last week the administration released a list of $200 billion worth of Chinese products it plans to hit with a 10 percent tariff, which has led to House Ways & Means Committee Chairman Kevin Brady (R-TX) to urge President Trump to meet with Chinese President Xi Jinping in hopes of de-escalating trade tensions.

“We’re going to -- either we’re going to see a very long ... maybe multiyear trade war with China, the two largest economies in the world that’s going to have economic casualties far beyond just our two countries,” Brady said on Fox News on Sunday. “Or I think President Trump and President Xi can make a deliberate decision to meet, begin crafting a new set of fair and lasting trade rules that frankly work and level the playing field for American farmers, local businesses in our economy. I’m urging the president to take the second approach because I think I’m confident this president meeting face-to-face with President Xi can level that playing field, can create a new set of trade rules for both of our countries.”

Brady said he planned to meet with Trump this week once he returned from his European trip. Brady’s meeting with Trump comes as tensions between the U.S. and its trading partners continue to increase by the day. The Office of the U.S. Trade Representative on Monday announced it was launching separate disputes against China, the European Union, Canada, Mexico and Turkey for their retaliation against the U.S. Section 232 tariffs on steel and aluminum.

Analysts and sources see the dollar-for-dollar retaliation for the steel and aluminum tariffs as an indication of how countries will react if the U.S. chooses to impose tariffs on autos and auto parts for national security reasons. The Commerce Department will hold a hearing on Thursday as part of its Section 232 investigation into auto and auto parts imports. Officials from the European Union, Mexico, Canada, Turkey, Japan, South Korea, Malaysia, South Africa and Taiwan are scheduled to testify along with representatives from domestic and foreign auto industry groups.

The hearing was initially slated to span two days, but Commerce canceled the second day after receiving only 45 requests to testify, which the department said it could accommodate in one day. The administration hopes to conclude the Section 232 investigation before the congressional midterm elections -- possibly as soon as next month. Trump has suggested the investigation will lead him to levy a 20 percent tariff on imports of autos and auto parts.

The House Ways & Means trade subcommittee will hold a hearing on Wednesday about the effects that tariffs are having on the U.S. agricultural community. The witnesses have not yet been announced. Agricultural stakeholders have been among the most vocal in cautioning the administration against instituting tariffs as other countries often first target agricultural goods when retaliating against the U.S.

House Majority Leader Kevin McCarthy suggested on Monday that one way to mitigate the impact of steel and aluminum tariffs on the U.S. economy would be for the administration to conclude the renegotiation of the North American Free Trade Agreement. “I think now is the time to find an agreement that we can come to agree in North America,” he said on Fox Business News. “Set that together with our allies, that would ... alleviate a lot of the steel and aluminum when we solve that problem for both because most of it comes from Canada that we deal with, a 50-50, they buy a lot of ours as well.”

On Tuesday, the Senate Energy and Natural Resources Committee will hold a hearing on the Interior Department’s final list of critical minerals for 2018, a list that some sources believe could lead to the launch of more Section 232 investigations. The Interior secretary in February published a draft list of 35 critical minerals for which the U.S. is heavily import-reliant. China is a leading producer of 19 of those minerals. The list was called for in a December 2017 executive order.

Testifying will be Steven Fortier, the director of the National Minerals Information Center at Interior’s U.S. Geological Survey; Roderick Eggert, the Viola Vestal Coulter Foundation chair in mineral economics at the Colorado School of Mines and the deputy director of the Critical Minerals Institute; Greg Gregory, the president of Materion Natural Resources, Inc.; Aaron Mintzes, senior policy counsel at Earthworks; Laurel Sayer, the president and CEO of Midas Gold Idaho; and Jim Sims, the vice president of external affairs at NioCorp Developments Ltd.

The Senate Banking Committee on Thursday will hold a confirmation hearing for Kimberly Reed, who has been nominated to be the president of the Export-Import Bank. Last December, the committee endorsed Reed’s nomination to be a member of the Bank’s board. That nomination was then withdrawn when Reed was nominated to be Ex-Im’s president, replacing former Rep. Scott Garrett who was unable to secure the endorsement of the committee.

The Senate Finance international trade, customs and global competitiveness subcommittee on Wednesday will hold a hearing on trade at U.S. ports. Customs and Border Protection Commissioner Kevin McAleenan will testify, as will Sergio Contreras, the chair-elect of the Border Trade Alliance in Weslaco, TX; Pete Saenz, the chairman-elect of the Texas Border Coalition and mayor of Laredo, TX; Kurt J. Nagle, the president and CEO of the American Association of Port Authorities in Alexandria, VA; and Mary Ann Bucci, the executive director of the Port of Pittsburgh Commission.

On Wednesday, USTR’s subcommittee on GSP will hold a hearing on all petitioned product additions, product removals and competitive needs limitation waiver petitions as part of its annual GSP product review. The hearing comes one day after comments are due in the GSP reviews of India, Indonesia and Kazakhstan. -- Brett Fortnam (bfortnam@iwpnews.com)