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This Week In Trade

U.S., China trade deputies to meet; Pence to talk USMCA; Modi headed to U.S.

Posted: September 16, 2019

Following President Trump’s “goodwill” gesture, U.S. and Chinese trade deputies will convene in Washington, DC, later this week ahead of planned high-level talks next month.

Trump last week announced that he was delaying a planned tariff hike on $250 billion worth of Chinese goods by two weeks at the behest of Chinese Vice Premier Liu He, to honor the 70th anniversary of the founding of the People’s Republic of China on Oct. 1. That move followed a decision by Beijing to exempt some U.S. goods from retaliatory tariffs, which Trump said he interpreted as a “gesture.”

The president did not rule out an interim deal with China last week, but Trump adviser Kellyanne Conway said on Fox News Sunday that Trump “doesn't make a quick, half-baked deal when he can get a better deal longer-term.”

 “I think it's a positive progress that the Chinese are coming to America, the Chinese are coming here now and the president wants a bilateral trade agreement that helps Americans,” she added.

The head of the U.S. Chamber of Commerce, Tom Donohue, meanwhile, said he spoke with U.S. Trade Representative Robert Lighthizer on Monday morning -- and the USTR “was pretty clear that we have to do this one step at a time but that this has to be a real agreement.”

“He spoke briefly about the kind of agreement he was looking for and did not speak at all about an interim agreement,” Donohue told reporters.

Donohue said U.S. and Chinese deputies were expected to meet in person on Friday with high-level talks slated to take place a week and a half later, in early October.

Pence continues the USMCA drumbeat

Vice President Mike Pence will continue to try to drum up support for the U.S.-Mexico-Canada agreement with an address at the Heritage Foundation on Tuesday. House Minority Leader Kevin McCarthy (R-CA), appearing on Fox News on Sunday, also pressed for a vote on the deal, again blaming House Speaker Nancy Pelosi (D-CA) for the delay.

“She continues to drag this forward, which only makes America weaker,” McCarthy said. “We need to be strong at this moment. And I think maybe it comes to the fact that maybe she is more concerned about tearing the president down, instead of building America up. That's what concerns me.”

Pelosi, who has yet to receive a USMCA implementing bill from the administration, has created a working group charged with negotiating with Lighthizer on the four core areas of concern for Democrats -- labor, environment, enforcement and biologics. USTR last week submitted a formal counterproposal to the working group, which House Ways & Means committee chairman Richard Neal (D-MA) said was being kept under wraps due to national security concerns.

Politico reported on Friday that the proposal showed some flexibility in responding to Democrats’ concerns including steps to address the blocking of dispute-settlement panels.

Modi and Trump in Texas

Indian Prime Minister Narendra Modi will visit the U.S. this week and is set to appear with Trump in Houston, TX, on Sunday. According to a White House statement, the “Howdy, Modi!” event will be an opportunity “to discuss ways to deepen their energy and trade relationship.” As Inside U.S. Trade has reported, the Trump administration hopes to announce a partial trade deal with India later this month, potentially at a meeting of the United Nations General Assembly. The UN summit kicks off on Tuesday, with high-level meetings scheduled next week.

Two India-focused events will take place in Washington, DC, this week. The Heritage Foundation and the Observer Research Foundation will host a two-day event on Wednesday and Thursday titled “India on the Hill: Charting a Future for Indo-U.S. Relations” featuring U.S. and Indian lawmakers. Also on Wednesday, the International Leaders Summit will host a US-India Leaders Summit event at the National Press Club featuring Reps. Mike Bost (R-IL), Mike Kelly (R-PA) and Michael Guest (R-MS), along with the Indian embassy’s deputy chief of mission Amit Kumar.

Airbus retaliation looms

The U.S. has received the go-ahead from the World Trade Organization to impose tariffs on the European Union in retaliation for illegal subsidies given to Airbus, according to press reports. USTR has proposed roughly $25 billion worth of European goods for retaliatory tariffs and has been waiting for a WTO arbitrator to approve the amount of U.S. retaliation before finalizing a list. The EU, meanwhile, has targeted a similar amount of U.S. goods for retaliation for subsidies the U.S. provides to Boeing.

EU trade commissioner Cecilia Malmström on Monday said Brussels was seeking an agreement on aircraft subsidies, but claimed the U.S. had not agreed to talks, Reuters reports.

Donohue also urged caution. “My own view is I think we ought to be careful about putting a lot of tariffs on each other,” he said Monday. “If we put a heavy tariff load on the Europeans, they'd have to wait a few months, but they would return with the same kind of burden on the U.S.”

 

Events this week

  • The Brookings Institution on Tuesday will hold a discussion on Japan, Taiwan and the future of “America First” trade policy featuring Barbara Weisel, former assistant U.S. Trade Representative for Southeast Asia and the Pacific; Jinji Chen, professor and dean of the CTBC Business School's Graduate School of Financial Management; Shujiro Uratak, professor at the Waseda University Graduate School of Asia-Pacific Studies; and Mireya Solís, director of the Brookings Center for East Asia Policy Studies
  • The U.S. Chamber of Commerce’s U.S.-Japan Business Council and the Japan-U.S. Business Council will host the 56th U.S.-Japan Business Conference on Tuesday and Wednesday.
  • Agriculture Secretary Sonny Perdue will address the United Fresh Washington Conference on Wednesday morning. -- Anshu Siripurapu (anshus@iwpnews.com)

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