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China strikes back with more tariffs on U.S. goods
2018/8/8 10:03:32 Source: https://www.politico.com/ Author: 点击率:
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CHINA STRIKES BACK WITH MORE TARIFFS ON U.S. GOODS: Expect more fallout this week from China’s announcement Friday that it would hit about $60 billion worth of U.S. exports with new tariffs in response to President Donald Trump’s decision last week to pursue higher trade penalties on Beijing. The move elevated concern in the business sector that there’s no end in sight for the growing trade war between the world’s two largest economies.

Beijing’s logic: China said it’s taking the action “because the U.S. side has repeatedly escalated the situation despite the interest of both enterprises and consumers” and it must “defend the country’s dignity and the interests of the people, defend free trade and the multilateral system, and defend the common interests of all countries in the world.”

What to expect: Under the plan, China would impose tariffs – between 5 percent and 25 percent – on nearly all of the $130 billion in goods imported from the United States. China’s Ministry of Finance said Friday the new tariffs would target more than 5,200 types of U.S. goods, including energy exports like biodiesel and liquefied natural gas and more U.S. agricultural goods like lamb and honey. Pro Trade’s Adam Behsudi and Doug Palmer have more on China’s latest tariffs threat here.

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CHINA DEALS MAJOR TRADE BLOW TO U.S. LNG INDUSTRY: China’s latest tariffs threat would claim another American casualty – the U.S. LNG industry, which could face a 25 percent levy from Beijing. This puts the planned Alaska LNG project right in the trade war crosshairs, as well as other plants that have been working for years to sign supply deals with Chinese customers.

“These projects were planned on the back of Chinese demand,” Charlie Riedl, head of trade association Center for Liquefied Natural Gas, told POLITICO. “It’s problematic for them, at best, if tariffs go into effect. China needs its gas, but there’s plenty of other countries with projects that would gladly fill that supply.”

The administration’s trade and energy policies “are not aligned with each other, that’s for sure,” he added. More here.

Chemicals would take a big hit, too. Almost 1,000 American chemicals and plastic products – almost one-fifth of Beijing’s latest list – would face Chinese tariffs, according to an analysis by the American Chemistry Council. The ACC has previously said Trump’s escalating tariffs would be “devastating” for U.S. chemical manufacturers and that the administration, instead, should “negotiate with China to bring an end to this trade war.”

A threat to U.S. hide, skins survival: U.S. hides, skins and leather products would also face tariffs of either 5 percent or 25 percent from China. The industry had previously not been targeted for retaliatory tariffs by China or any other trading partner, according to the U.S. Hide, Skin and Leather Association.

“The Chinese market is not just important for the U.S. hide, skin and leather industry – it is essential to its survival, particularly as formidable competitors finalize free trade agreements that could place the U.S. industry at a competitive disadvantage,” said Stephen Sothmann, president of the industry group.

U.S., MEXICO MAKING SWIFT PROGRESS TO WRAP NAFTA TALKS: After two weeks of renewed talks, negotiators from the U.S. and Mexico have moved to wrap up an additional 10 chapters as part of their latest push to finish a new NAFTA by the end of the month. Mexican Economy Minister Ildefonso Guajardo said Friday that negotiators “practically have 20 chapters closed of 30 chapters in total.”

“The rest aren’t full chapters, but more the definition of a paragraph, the specific language," he said, adding that at the technical level, there isn’t much drafting left to do.

State of play: Nine chapters and nine sectoral annexes were already closed when Guajardo first resumed talks with U.S. Trade Representative Robert Lighthizer in Washington two weeks ago. But while they’ve wrapped up 10 more chapters, some of the biggest sticking points – such as automotive rules of origin and the U.S.’s proposal to include a so-called sunset clause – have not been fully solved.

Mark your calendars: Guajardo will be back in Washington on Wednesday or Thursday to continue high-level talks, he said. In the meantime, technical teams from the two countries continued to meet throughout the weekend and are working on “creative solutions” for the remaining issues. The Canadian negotiating team has not been deployed to Washington, but that could happen in the coming days, Guajardo said.

“We know that Canada has to come into these discussions and probably it will happen quite soon,” he said.

TRUMP CLAIMS TARIFFS WILL PAY DOWN LARGE PART OF NATIONAL DEBT: Trump defended his tariff policy on Twitter on Sunday, falsely arguing the duties he has imposed and threatened so far will allow the federal government “to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people. At minimum, we will make much better Trade Deals for our country!”

However, the Treasury Department’s latest monthly statement shows that tariffs account for a small portion of U.S. government receipts. U.S. customs officials collected about $3.5 billion in duties in June, bringing the total for the first nine months of the fiscal year to about $28.3 billion. That’s only about $3.1 billion more than the $25.2 billion collected during the same period in fiscal 2017.

In addition, Trump so far has actually imposed duties on a small portion of U.S. goods imports, which totaled about $2.3 trillion in 2017. He set a 25 percent duty or quota restrictions on $29 billion worth of steel imports; a 10 percent duty on $18 billion worth of aluminum imports; a 25 percent duty on $34 billion worth of Chinese goods; a 30 percent duty on $8.5 billion worth of solar product imports and a tariff-rate quota on around $1.8 billion of washing machine imports.

TRUMP SUPPORTERS URGE REJECTION OF MTB: An advocacy group that shares Trump’s concern about the trade deficit has urged the president to consider vetoing the Miscellaneous Tariff Bill, should it reach his desk. The bill, HR 4318, which recently passed the Senate and is pending in the House, would waive duties on raw materials and intermediate goods not made in the United States in order to reduce costs for U.S. manufacturers making final products from the imports.

“The Miscellaneous Tariff Bill should be called the ‘Never Make It Here Again Act’,” Dan DiMicco, chairman of the Coalition for a Prosperous America, said in a statement. “At precisely the moment when the president is tackling foreign trade cheating and trying to create leverage, Congress is again engaging in unilateral trade disarmament.”

“Our board of manufacturing, agriculture, and labor members voted to oppose the elimination of tariffs contained in this bill,” Michael Stumo, CEO of the CPA, added. “This is a giveaway to foreign manufacturers and other countries.”

DiMicco is a former Trump campaign adviser who worked closely with Commerce Secretary Wilbur Ross and White House trade adviser Peter Navarro during the 2016 campaign. The former chairman of Nucor Steel Corp. He also serves on USTR’s Advisory Committee for Trade Policy and Negotiations.

Congress reformed the process for compiling the MTB a few years ago to get around concerns that the tariff waivers violated the House Republican ban on earmarks. The National Association of Manufacturers strongly supports the legislation and has urged the House to quickly finish work on the bill and Trump to sign it.

USTR THREATENS TO REVOKE TURKEY’S GSP BENEFIT: USTR said Friday it will review Turkey's eligibility for duty-free access to the U.S. market under the Generalized System of Preferences program because of concern that it is not providing the United States reasonable and equitable access to its market.

"We hope that Turkey will work with us to address the concerns that led to this new review of their duty-free access to the United States," Deputy U.S. Trade Representative Jeffrey Gerrish said in a statement that did not mention what impediments U.S. exports face. However, Turkey is one of several countries that has retaliated against U.S. steel and aluminum tariffs. It imposed new duties of 4 percent to 70 percent on $1.8 billion worth of U.S. imports, based on 2017 trade values.

The Trump administration last week also sanctioned two senior Turkish officials over the country’s refusal to extradite Andrew Brunson, an American pastor whom Turkish authorities accuse of aiding the failed coup attempt against Turkish President Recep Tayyip Erdogan in July 2016.

The U.S. imported $1.66 billion worth of goods from Turkey under the GSP program in 2017, which represented about 17.7 percent of total U.S. imports from the country. Top categories of goods imported under the program were vehicles and vehicle parts, jewelry and precious metals, and stone articles, according to USTR. A final decision on Turkey's GSP status will be made after a public hearing and comment process.

POMPEO GOES TO BAT OVER TRUMP’S TRADE POLICY: Trump’s trade policy will help the U.S. and also benefit the economies of Southeast Asia and the rest of the world, Secretary of State Mike Pompeo said Friday. Speaking on the sidelines of the Association of Southeast Asian Nations ministers meeting, Pompeo underscored that the U.S. wants to engage in more free and fair trade with Indo-Pacific countries.

“We are a radically free-trade country, and President Trump is enormously supportive of that,” Pompeo said in an interview with Channel NewsAsia in Singapore. Trump is “simply looking for open, free trade. We want that with the Indo-Pacific, we want it with Singapore, with Southeast Asia. It’s an imperative.”

TPP-11 connection: While Pompeo expressed his desire to deepen trade ties with ASEAN members, four of those countries – Singapore, Brunei, Malaysia and Vietnam – are in the process of ratifying the updated Trans-Pacific Partnership, which Trump withdrew the U.S. from on his third day in office. More here.

WILL LIGHTHIZER ATTEND ASEAN TRADE MINISTER MEETING? Meanwhile, the ASEAN trade and economic ministers will meet hold their annual meeting at the end of the month. Last year, Lighthizer skipped the event regularly attended by his predecessor, Michael Froman, sending then-Assistant U.S. Trade Representative Barbara Weisel, who has since resigned.

As of last week, there was no word on whether Lighthizer would to go to Singapore for this year’s gathering or send his deputy, Gerrish, who has been assigned to find U.S. free trade partners in the Asia-Pacific and stood in for Lighthizer at the Asia-Pacific Economic Cooperation trade ministers meeting in May.

The ASEAN gathering usually attracts senior trade officials from China, Japan, South Korea, India, Russia and other Asia-Pacific powers, creating a venue ripe for bilateral meetings. However, Lighthizer is pushing to wrap up the NAFTA talks by the end of the month, so he may be in Washington trying to nail down details of that pact.

U.S., COLOMBIA RECOGNIZE STRONG TRADE TIES: Officials from the U.S. and Colombia have seen their bilateral trade ties “continue to strengthen” over the past six years since the implementation of a bilateral trade promotion agreement, according to a release from USTR. Colombian officials were in Washington last week to assess the deal.

Officials noted that “both sides have worked together constructively to resolve issues when they arise, and that implementation is proceeding well and smoothly,” USTR said.

Labor issues remain: USTR noted that work remains to be done on labor issues, but that Colombia has made progress in that area. Officials also discussed other areas of concern, such as intellectual property and truck scrappage.

The countries have been working on these issues for months, as they were also areas of concern for U.S. industry and business groups – including Pharmaceutical Research and Manufacturers of America – when the South American country was making its push to join the Organization for Economic Co-operation and Development. Colombia was invited to formally accede to OECD in May.

HEITKAMP KEEPS PRESSING FOR ‘SMART TRADE POLICIES’: Sen. Heidi Heitkamp (D-N.D.) met with Canadian Deputy Ambassador Kirsten Hillman last week as part of her continued efforts to show U.S. trading partners, namely Mexico and Canada, that American farmers and ranchers want a successfully renegotiated NAFTA. Heitkamp, one of the most vulnerable Democrats up for re-election this year, has repeatedly spoken with Mexican and Canadian officials in recent months to discuss the negotiations and its effect on North Dakota agriculture.

Heitkamp “reaffirmed North Dakota’s interest in quickly finding a resolution to NAFTA talks so we can give certainty to the producers who rely on these markets to survive,” she said in a statement. “I’ll continue to push for smart trade policies that protect and open markets for our goods – not shut them out.”

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