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This Week In Trade

Chinese vice premier could still travel to DC despite Trump’s latest tariff threats

Posted: May 06, 2019

Chinese Vice Premier Liu He and a delegation of Chinese trade negotiators are still planning on traveling to Washington, DC, this week for another round of trade talks, according to a Chinese government spokesman, despite President Trump’s announcement yesterday that the U.S. would impose new tariffs on Chinese products.

On Sunday, Trump tweeted that on Friday that the U.S. would impose 25 percent tariffs on $325 billion worth of Chinese goods that had yet to be subjected to U.S. duties. The U.S. also will raise 10 percent tariffs on $200 billion worth of Chinese goods to 25 percent come Friday, Trump said.

China’s Foreign Ministry Spokesman Yan Shuang told reporters in Beijing that the Chinese delegation was preparing to travel to Washington and downplayed Trump’s announcement as a rerun of previous threats.

“Similar situations have appeared many times before,” Yan said, according to an informal translation. “The position and attitude of the Chinese side have always been very clear, and the U.S. side is also very clear.”

“The Sino-U.S. economic and trade consultations have been carried out for ten rounds and have made positive progress. As a matter of urgency, we hope that the U.S. and China will work together and work in tandem to achieve a mutually beneficial and win-win agreement on the basis of mutual respect,” he continued. “This is not only in line with the interests of the Chinese side, but also in the interests of the US, and it is also the general expectation of the international community.”

But a Fox Business report on Monday said Liu did not get on a plane as scheduled with a large entourage slated to travel to the U.S.

The U.S. business community was shaken by the tariff announcement, which sent stocks tumbling. Several groups immediately condemned Trump’s decision. “We strongly oppose the President’s announcement that he will continue to penalize American families, and add additional obstacles to economic growth, by imposing further tariffs on U.S. imports from China,” American Apparel & Footwear Association President and CEO Rick Helfenbein said in a statement on Sunday. “The tariffs described by the President -- both those that would be increased to 25% on Friday, and those that would be added to consumer goods like clothing and shoes that are not currently being charged with punitive tariffs -- will only hurt U.S. families, U.S. workers, U.S. companies, and the U.S. economy.”

Trump was unmoved. “The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade,” he tweeted on Monday. “With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”

The Chinese delegation will not be the only trade negotiators in town. European Union officials traveled to Washington on Monday to begin technical talks with the U.S. on a potential trade agreement. The talks will focus on “regulatory cooperation in a number of sectors and prepare the ground for a meeting” between EU Trade Commissioner Cecilia Malmström and U.S. Trade Representative Robert Lighthizer “due to take place in the coming weeks,” according to an EU official.

Trans-Atlantic trade talks have been hampered by competing priorities. U.S. officials and key lawmakers have said agriculture must be included in any pact with the EU, while European leaders have consistently refused to entertain the idea. EU sources have suggested certain agricultural issues could be addressed via discussions on regulatory cooperation and conformity assessments, but they have reiterated that changing tariff lines was not on the table due to political pressures in Europe.

In Geneva, the World Trade Organization will hold a General Council meeting on Tuesday and Wednesday, and the U.S.’ blocking of Appellate Body appointments is expected to be a topic of discussion. Several delegations will discuss their proposals for Appellate Body reform, as they did at an informal heads of delegation meeting on May 3. WTO members at that meeting pointed to an informal December deadline to resolve the issue before the body is rendered useless, according to Geneva sources. The Appellate Body has only three of its seven seats filled and the terms of two remaining members expire in December. The U.S. did not discuss the Appellate Body issue on May 3, a Geneva source said.

The U.S. is expected to discuss at the General Council its proposal to establish criteria to determine the development status of members. The proposal is deeply unpopular with other WTO countries as it would require that many members now self-classified as “developing” be considered “developed,” which would mean foregoing special and differential treatment exceptions.

WTO Director General Roberto Azevêdo will submit his report as the trade negotiations committee chair at the General Council. At Friday’s informal heads of delegations meeting, he told members that there have not yet been “tangible signs of convergence” in fisheries talks -- which the U.S. has said will be a litmus test for future negotiations. Fisheries negotiations will continue on Wednesday in Geneva.

The U.S. on Tuesday is slated to officially withdraw from a suspension agreement with Mexico covering fresh tomatoes. The agreement suspended an antidumping investigation, which would recommence if the agreement was terminated. The Commerce Department announced the move earlier this year at the behest of Florida tomato growers; it has been criticized by some lawmakers and industry groups.

Since then, Mexican producers have put forward proposed changes to the agreement that have been well-received by the Florida growers. No revised agreement has yet been announced, but Mexican officials have said they are optimistic a solution can be reached. The U.S. International Trade Commission is scheduled to vote on its five-year review of the suspension agreement on Thursday.

Friday is the deadline for the Commerce Department’s Bureau of Industry and Security to issue a new rule that will define “emerging technology.” Industry groups have urged BIS to narrowly define emerging technology to ensure U.S. technological growth is not inhibited.

Trump and Japanese Prime Minister Shinzo Abe spoke on the phone on Monday morning about trade policy, according to another Trump tweet. U.S.-Japan relations will be the topic of panels at the Wilson Center and the Reischauer Center for East Asian Studies this week. On Tuesday, the Wilson Center will host a daylong event on U.S.-Japanese ties. An afternoon trade panel will feature Mireya Solis, the director of the Center for East Asia Policy Studies at the Brookings Institution; Taeko Hoshino of Japan’s Institute of Developing Economies; Hiroki Takeuchi, an associate professor of political science at Southern Methodist University; and Shihoko Goto, the deputy director for geoeconomics at the Wilson Center.

The Reischauer Center event on Friday will feature Daniel Bob, former special assistant to then-U.S. Senate Finance Committee Chairman William Roth; William Brooks, former State Department specialist on Japan; Kent Calder, vice dean for international research cooperation at Johns Hopkins SAIS; Margot Carrington, former minister-counselor for public affairs at the U.S. embassy in Tokyo; Charles Morrison, former president of the East-West Center; and Ryan Shaffer, the president of the Japan-America Society of Washington.

Canadian Trade Minister Jim Carr is in Washington this week and will discuss WTO reform at the 49th Washington Conference on the Americas on Tuesday. Mexican Foreign Affairs Secretary Marcelo Ebrard will discuss the U.S.-Mexico-Canada Agreement and broader U.S.-Mexico relations at the event. Vice President Mike Pence, Colombian Vice President Marta Lucía Ramírez and several U.S. lawmakers will also speak.

House Ways & Means trade subcommittee Chairman Earl Blumenauer (D-OR) will discuss Congress’ role in trade policy at the Center for Strategic and International Studies on Tuesday morning.

The Coalition of Services Industries on Tuesday will host a panel discussion on USMCA featuring Kimberley Claman, the director of international government affairs at Citi; Jake Jennings, head of global trade policy at AT&T; Dontai Smalls, the vice president of global public affairs at UPS; Sarah Thorn, the senior director of global government affairs at Walmart; and Matthew Reisman, the director of international trade at Microsoft. CSI President Christine Bliss will moderate the discussion.

The Washington International Trade Association will host two panels on digital trade and the WTO’s e-commerce initiative on Thursday. The first panel will feature Bliss, Anupam Chander of Georgetown Law, Josh Kallmer from the Information Technology Industry Council and Christopher Melly from AIG. The second panel will be moderated by Jake Colvin from the National Foreign Trade Council and will include Katie Hays from Caterpillar, Adam Hemphill from Walmart, Jennifer Sanford Cisco Systems, and Arun Venkataraman from Visa.

Senate Majority Leader Mitch McConnell last week filed cloture on three nominations for the Export-Import Bank’s board of directors, setting the stage for the nominees to be confirmed this week. The nominees’ confirmation would give the bank a quorum for the first time since 2015. -- Brett Fortnam (bfortnam@iwpnews.com)