#1 – TRUMP OPENS THE DOOR TO TPP
Twice last week President Trump hinted that he would be open to rejoining TPP (with the very Trumpian caveat of needing a “substantially better” deal). The first peek into this new direction, which many see as coming directly from the desk of Gary Cohn, came in an interview Trump did on CNBC with Joe Kernen that aired on Thursday:
Then came Trump’s Davos speech on Friday in which he touted his desire to negotiate bilateral agreements with TPP nations and also engage “perhaps as a group”:
The big question: Is this pivot a flash in the pan or a calculated long-term strategy? Was Trump telling the Davos crowd what they want to hear or have the “globalists” finally wrestled control from the trade hard-liners who dominated Trump's early days?
#2 - TPP 11 CLOSE THE DEAL
Trump’s new flirtations with TPP likely stem, at least in part, from the fact that the US' former TPP partners have now completed an agreement on the re-branded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). On Tuesday, the 11 remaining countries announced in Tokyo that negotiations have concluded and that the deal will be signed in March. Canada, which was the last holdout in reaching an agreement, touted the agreement, with Prime Minister Justin Trudeau calling Tuesday a “great day for progressive trade around the world.” Read more HERE.
What to watch for: In addition to whether completion of the agreement changes Trump's calculus, many will now be watching the interest level of other Asian countries in joining CPTPP in the years to come.
#3 - MONTREAL NAFTA ROUND DELIVERS NEW OPTIMISM
While the just concluded sixth NAFTA negotiating round was thought by many to be a potential breaking point in negotiations, reports from the talks point to a newfound belief that middle ground can be achieved. Most attribute the fresh optimism to a set of compromise proposals that Canada brought to the negotiating table in response to many of the Trump administration's hard-line positions.
Read more HERE.
#4 – WHAT TO EXPECT ON TRADE IN THE STATE OF THE UNION
According to the White House, the President's message on trade on Tuesday night will be much like his speech in Vietnam last year at the Asia Pacific Economic Cooperation summit. That speech included familiar Trump trade lines like:
“From this day forward, we will compete on a fair and equal basis. We are not going to let the United States be taken advantage of anymore. I am always going to put America first.”
The big question has been whether Trump will use the SOTU to roll out decisions on any pending trade actions. There has been mounting speculation that new tariffs stemming from the Section 301 case against China on Intellectual property could be a splashy inclusion, however many trade watchers believe that there is still more behind the scenes work to do before those tariffs can be announced.
#5 - 4-0 SHOCKER IN BOEING VS. BOMBARDIER CASE
Canada claimed victory on Friday when the U.S. International Trade Commission (ITC) rejected Boeing’s claim that they had been injured by Canadian-based Bombardier in a case arising from the sale of Bombardier C series aircraft to Delta airlines.
The decision capped a dumping case brought by Boeing in which they argued that Bombardier was using government subsidies to sell their jets in the U.S. below the cost of production. Few saw the ITC's unanimous rejection coming, particularly after the Commerce Department decided on 300 percent tariffs earlier this year.
Read Boeing's statement on the decision HERE.
More from Reuters on the decision HERE.
#6 - FARMERS: NAFTA NEGOTIATIONS STRETCHING INTO 2019 WILL GROW UNCERTAINTY
The Washington Post’s David Lynch reports from Montreal on the growing sense that NAFTA negotiations will likely stretch into 2019 (and potentially include a break in the spring as Mexico heads into elections). Lynch’s story includes the voices of farmers who are increasingly voicing concerns that NAFTA uncertain fate creates uncertainty on the farm as well.
#7 – SOLAR AND WASHING MACHINE TARIFFS ANNOUNCED
As expected, the Trump administration followed through with new tariffs on imported solar panels and washing machines last week. On Monday, the Administration marked the end of their Section 201 cases by announcing a 30 percent tariff on solar panels that will be reduced to half that after four years and a 20 percent tariff on washing machines up to 1.2 million imports, with a 50 percent tariff on any additional imports.
Look for a number of WTO challenges against these tariffs. South Korea has already indicated they will be moving forward with a WTO case challenging the solar decision. Read more on potential WTO action HERE.