#1 – LIGHTHIZER: "WE'VE TRIED IT THEIR WAY FOR 25 YEARS...LET'S TRY A DIFFERENT ROUTE
CLIP OF THE WEEK: Watch Bob Lighthizer lay out his view on how the Trump Administration trade approach differs from what he calls a 25 year status quo. Part of a RARE interview he gave to Laura Ingraham late last week. Full interview HERE.
#2 - THE DECEMBER NAFTA “MINI-ROUND”
While the next NAFTA negotiating round was recently delayed until November 17th in Mexico, not much had been known about where negotiations go after that.
Mystery solved: This week Inside U.S. Trade reported that NAFTA partners will meet in Washington D.C. in December, but that top negotiators for each country will not be at the table. This sort of meeting, known in trade parlance as a “chief negotiators” meeting, is typical in trade negotiations but has yet to be a feature of NAFTA renegotiations.
What it means: For one thing, it means that the ministers ultimately responsible for producing a renegotiated NAFTA (Lighthizer, Freeland, and Guajardo) won’t likely meet again until January after their meeting this month. That's a far cry from the accellerated timetable heralded at the outset of NAFTA renegotiations.
Politically speaking, a January meeting creeps closer to elections in Mexico, but it also (theoretically) creeps further away from the tax reform debate in the U.S.
#3 - A TRADE LULL? EVEN DURING NAFTA RENEGOTIATIONS?
Speaking of tax reform, the conventional wisdom emerging in Washington D.C. is that absent news of a U.S. withdrawal, the temperature and spotlight on trade could be reduced in the weeks/months ahead – even as renegotiations move forward.
The reason: Tax reform will suck up all the political oxygen, particularly because of the crossover in tax and trade constituencies in D.C.
Our take: The next round could still have some fireworks, but with the big three negotiators not meeting again until January, and the tax reform debate dominating headlines, we could see a relative reduction in attention on Capitol Hill, from the Administration, and within some parts of the business community.
#4 – THE AUTOMOBILE EMPIRE STRIKES BACK
The Automobile industry spent this week swinging back hard against proposed hikes in NAFTA’s rules of origin requirements and NAFTA withdrawal. The pushback included the launch of a new pro-NAFTA coalition called “Driving American Jobs” backed by GM, Toyota, Hyundai, Volkswagen, and Ford, as well as this letter circulating among House members.
While the NAFTA front was quiet this week, THE ENFORCEMENT FRONT HEATED UP:
#5 - SOLAR FIGHT ENTERS FINAL PHASE
A long running battle that pits a limited number of solar companies that operate domestically who’ve petitioned the government for relief from Chinese imports they say are unfairly priced,
VS. domestic solar companies who USE those imported solar components from China to assemble/manufacture panels in the U.S. has entered the equivalent of the 4th quarter.
That’s because on Tuesday, the U.S. International Trade Commission recommended limitations on some Chinese solar imports and tariffs as high as 35 percent on others.
BUT – It’s not over yet, the President will now have until November 13th to act on the recommendation of the USITC by either accepting or rejecting their proposal.
All signs point to Trump accepting the ITC recommendation. As the President famously said in an August Oval Office meeting, “I want tariffs! Bring me some tariffs!”
Well, the ITC just brought him some tariffs. More on the solar dispute from Ana Swanson at the NY Times HERE
#6 - COMMERCE DEPARTMENT DETERMINES DUTY LEVEL IN LUMBER DISPUTE
This week also brought news in an even longer running trade dispute, this one pits the Canadian lumber industry VS. the U.S. lumber industries.
The gist: The U.S. lumber industry has long accused the Canadian lumber industry of being illegally subsidized. The Canadians, on the other hand, dispute the U.S. claims and have argued they’re needed to meet U.S. domestic demand. For decades there have been agreements that have allowed Canadian lumber in provided that certain price levels or other limits were maintained. The last agreement between the U.S. and Canada on this issue, however, expired in 2015.
Now the U.S. industry has successfully sought to re-impose duties on Canadian lumber imports. This week, the Commerce Department said that most Canadian producers will pay a duty rate of around 20%
BUT – That rate will only be set if the U.S. International Trade Commission agrees when they make their final determination on the issue before December 18th.
#7 – ONE MORE FOR GOOD MEASURE: COMMERCE SETS DUTIES IN CASE AGAINST CHINESE ALUMINUM IMPORTS
The fact that President Trump will be on Chinese soil on Wednesday didn’t stop his administration from laying out tough new duties against Chinese aluminum imports early last week. For their part, the Chinese Ministry of Commerce hit back with a statement accusing the U.S. of ignoring World Trade Organization obligations.
Read more from Bloomberg HERE
BONUS ICYMI – Here is a link back to last week’s newsletter that previewed the POTUS Asia trip and the trade issues he’ll confront.