The Trump Administration and. Chinese Tariffs: The Current State of Play

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Marilyn Cooper
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1 The Trump Administration and Chinese Tariffs: The Current State of Play CASIE DAUGHERTY, DIRECTOR

2 Trade State of Play As of early December 2018, the United States has utilized a broad interpretation of national security, in combination with the results of an investigation into predatory practices on intellectual property to place tariffs on a wide swathe of products ranging from components and raw materials to finished products No country has escaped unharmed and U.S. manufacturers, farmers, and other companies have often been hit by both U.S. cost increases due to tariffs and retaliatory action from our trading partners

3 Section 232 Tariffs U.S. levied tariffs on imported steel and aluminum 25% for steel 10% for aluminum Some countries granted temporary exemptions (including Canada, the EU, and Mexico); all exemptions have expired. NAFTA/USMCA Complications on Canada & Mexico PRODUCT EXEMPT FROM TARIFF AGREED TO INSTITUTE QUOTA STEEL AUSTRALIA ARGENTINA BRAZIL SOUTH KOREA ALUMINUM AUSTRALIA ARGENTINA

4 What is Section 301? President Trump ordered USTR to begin a Section 301 investigation in August of 2017 USTR was told to focus on Chinese laws, policies, practices or actions that may be unreasonable or discriminatory to: American intellectual property rights American innovation American technology development Initial Report released on March 22 Source: Scott Lincicome analysis of research by Thomas Bayard and Kimberly Ann Elliott, via Bloomberg

5 301 Investigation Tariffs USTR Lighthizer said that actions to respond to the 301 investigation would focus on the Made in China 2025 program new advanced information technology automated machine tools & robotics aerospace and aeronautics equipment maritime equipment and high tech shipping modern rail transport equipment new energy vehicles equipment power equipment agriculture equipment new materials in biopharma and advanced medical products

6 301 Tariffs Initial list of tariffs focused on $50 billion in Chinese imports List was split into two $34 billion $16 billion China retaliation made President Trump angry, he ordered USTR to study adding additional tariffs USTR added tariffs on additional $250 billion in Chinese imports

7 301 Tariffs LIST: # OF TARIFF LINES VALUE OF IMPORT TARIFF RATE EFFECTIVE DATE RETALIATION LIST 1: 818 LINES $34 BILLION 25% JULY 6 RECIPROCAL TARIFFS: 545 TARIFF CODE LINES LIST 2: 279 LINES $16 BILLION 25% AUGUST 23 TARIFFS OF 5% - 25%: 333 TARIFF CODE LINES LIST 3: 5,745 LINES $200 BILLION 10% (CURRENT)* 25% (SUPPOSED TO BEGIN JANUARY 1, 2019) SEPTEMBER 24 TARIFFS OF 5% - 10%: 5,207 TARIFF CODE LINES & NONTARIFF ACTION LIST 4?

8 Exemption Process Commerce product exemption process for 232 was considered inside and outside the Administration to be a disaster USTR learned lessons from Commerce Process Product exemptions available for List 1 & List 2 List 3 exemptions?

9 Thaw in Trade Tensions? President Trump and President Xi met at G20 Summit Agreed to 90-day halt to actions in order to further negotiate Unclear what they actually both agreed to do Arrest of Huawei executive could throw a wrench in cooperation

10 Looming Trade Issues Trump Administration Possible negotiations with Japan, the EU, and the UK Possible 232 auto and auto parts tariffs Possible List 4 for China products USMCA passage and implementation

11 USMCA will consume trade focus in first half of next year Congress and Trade Source: CRS

12 Congress and Trade Congress has largely held its fire on China trade actions 232 investigations have received most attention Auto investigation action by the Trump Administration could be the turning point Incoming Senate Finance Committee Chairman Grassley said publicly he was interested in looking at trade legislation

13 Congress and Trade: House November s election results will have significant impact on trade discussions and actions New Democratic House Majority will have a number of questions for the Administration Incoming House Ways and Means Chairman Richie Neal Who will lead the Trade Subcommittee?

14 What Can You Do? Comment on USTR and Commerce Rules Apply for Product Exemptions Engage with Congressional Committees Engage with Your Congressional Delegation Ensure Your Employees Know How Tariffs Effect the Business

US Trade Policy under Trump: NAFTA, Steel, and Beyond

US Trade Policy under Trump: NAFTA, Steel, and Beyond Robert A. Blecker American University blecker@american.edu Levy Economics Institute April 18, 2018 How to think about NAFTA Trump claims Mexico won,