On The Hill

Canadian Aluminum

On Tuesday (Sep. 15), U.S. Trade Representative (USTR) Robert Lighthizer announced the U.S. will halt tariffs on imports of Canadian aluminum. The Trump administration reimposed the tariffs in August 2020.

The announcement said the U.S. “will resume duty-free treatment of non-allowed, unwrought aluminum,” and make the action retroactive to Sep. 1, 2020. However, Lighthizer set a monthly quota of 83,000 tons in September and November, and 70,000 tons in October and December.^[1] 

Canadian Prime Minister Justin Trudeau told reporters on Tuesday (Sep. 15) morning that he would move to “counter the unjust tariffs.” A press conference with Canadian Trade Minister Mary Ng was planned for 3:00 pm that day.

In response, Ng said Canada would abandon plans to retaliate against the U.S, but that Ottowa would retaliate if tariffs were imposed.

“Let me be clear – Canada has not conceded anything,” she said.^[2] 

 

World Trade Organization

On Tuesday (Sep. 15), the World Trade Organization (WTO) ruled that President Trump violated global trade rules when he unilaterally imposed tariffs on over $350 billion of Chinese goods.^[3] 

The trade body sided against the U.S. on multiple issues, including that the Trump administration did not provide a convincing explanation of why the tariffs were allowed under a provision that lets countries take emergency action to “protect public morals.”

They also found that the additional duties Trump imposed on Chinese goods violated the WTO’s “most-favored nation principle” that requires the U.S. and other countries to apply the same tariffs on imports from all other members.

The ruling may not have much effect due to the counter-tariffs China imposed and the already agreed upon Phase One deal. USTR Lighthizer said the WTO is inadequate to stop China’s harmful technology practices, and stressed the decision has no impact on the Phase One agreement.

Additionally, the panel found the Trump administration had exceeded the maximum tariff rates the U.S. had pledged it would charge as a member of the organization. Trump argued the WTO had no reason to rule on the tariffs because the U.S. had entered into talks with China to resolve the dispute.

China has retaliated on more than $100 billion worth of U.S. exports. In January 2020, the U.S. and China agreed on the Phase One trade deal to partially resolve the dispute, however most of the tariffs still remain in place.

“The United States must be allowed to defend itself against unfair trade practices, and the Trump administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers,” Lighthizer said in a statement.

To view the WTO ruling, click here.

 

China News

Xinjiang

On Monday (Sep. 14), the Trump administration announced it would block shipments of certain cotton products and computer parts from the Xinjiang province in China, and is considering a broader ban on imports from the region.^[4] 

Customs and Border Protection (CBP) will issue five new “Withhold Release Orders (WRO)” on cotton fabrics, computer parts, linen, and hair products from four companies in the region, as well as those coming from a Chinese “reeducation” facility.

“These are not the first WROs the U.S. has issued on Chinese goods, and I can tell you I’m absolutely confident they’re not going to be the last,” CBP Commissioner Mark Morgan told reporters.

TikTok

Oracle confirmed on Monday (Sep. 14) that it was chosen to serve as a U.S. technology partner for TikTok. TikTok’s Chinese parent company ByteDance has faced pressure from the Trump administration to sell the popular application over national security concerns.^[5] 

However, the Trump administration said on Friday (Sep. 18) it would bar the Chinese-owned mobile apps WeChat and TikTok from U.S. application stores as of Sunday (Sep. 20).^[6] 

“Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party,” Commerce Secretary Wilbur Ross said in a statement.

To view Ross’s statement, click here.

 

European Commission

This week, the European Commission started an investigation to extend anti-dumping measures against U.S. biodiesel. The investigation follows a request by the European Biodiesel Board.^[7] 

The Commission said there is, “sufficient evidence that, should measures be allowed to lapse, the current import level of the product under review from the country concerned to the Union is likely to increase due to the existence of unused capacity in the country concerned and the attractiveness of the Union market in terms of volume of consumption.”

The investigation will be concluded within 12 to 15 months, and the existing duties will remain in place during this period.

To view the “Notice of Initiation,” click here.

 

Senate Democrats Release Strategy to Counter China

On Thursday (Sep. 17), Senate Democrats released legislation with their strategy to confront and compete with China. The bill, led by Minority Leader Chuck Schumer (D-NY), would provide more than $350 billion over a decade to build the U.S.’ industrial capacity and challenge Beijing.

The legislation comes as relations between the U.S. and China havedeclined, setting the stage for “a new era of confrontation.”

“America cannot continue to underinvest in our workers, manufacturing communities, science, technological research and trade enforcement or cede our leadership in the international community and expect to confront this threat,” Schumer said.

The legislation “counteracts the Chinese Communist Party’s predatory trade practices and aggressive military behavior, reinvigorates our alliances and turns the tables by making essential investments in our workers, entrepreneurs and manufacturers,” he added.

The bill is focused on bolstering U.S. research and development in science and technology. It also would invest roughly $16 million in the U.S. semiconductor industry, and require the president to submit a plan to Congress to use the Defense Production Act to increase domestic production capabilities of semiconductor devices and require domestic sourcing for the products.

Additionally, it takes aim at China’s influence on global supply chains and would require the Pentagon to buy certain items from the U.S. and “friendly nations,” rather than China. Notably, the summary says the legislation increases “efforts to strengthen domestic supply chains in materials like PPE.”

The legislation would also provide $125 million in military spending for the Indo-Pacific region.

To view a summary of the bill, click here.

 

GOP Roadmap

On Tuesday (Sep. 15), House Minority Leader Kevin McCarthy (R-CA) unveiled a blueprint of the GOP’s election year agenda. The document, labeled the “Commitment to America,” includes main themes such as, “Restore Our Way of Life,” “Rebuild the Greatest Economy in History,” and “Renew the American Dream.”

Earlier this year, McCarthy appointed a “China task force,” and vowed to implement the recommendations that come out of the group. The efforts are led by a goal to increase U.S. manufacturing, as well as reforming the supply chain for “critical needs like medicines, protective medical equipment, and technology.”

To view a summary of the plan, click here. 

 

References

^[1] Bade, Gavin. “U.S. drops tariffs on Canadian aluminum, preempting Trudeau retaliation.” Politico Pro, 15 Sep. 2020. https://link.edgepilot.com/s/5cb72c64/uznrF3XYMUW7loL-_vI23Q?u=https://subscriber.politicopro.com/article/2020/09/us-drops-tariffs-on-canadian-aluminum-preempting-trudeau-retaliation-3983901

^[2] Gardner, Lauren. “Canada drops retaliation plans after U.S. ends aluminum levies.” Politico Pro, 15 Sep. 2020. https://link.edgepilot.com/s/0608eceb/k90fE0nuQE2aMOWjzdhqVw?u=https://subscriber.politicopro.com/article/2020/09/canada-drops-retaliation-plans-after-us-ends-aluminum-levies-3983905

^[3] Palmer, Doug. “Trump’s tariffs on China violate law, trade body says.” Politico Pro, 15 Sep. 2020. https://link.edgepilot.com/s/63bc6745/reINkKPfbUSXT1sOUw7bRA?u=https://subscriber.politicopro.com/article/2020/09/wto-rules-against-trumps-tariffs-on-china-1994572

^[4] Bade, Gavin & Palmer, Doug. “U.S. blocks certain Chinese products over forced labor.” Politico Pro, 14 Sep. 2020. https://link.edgepilot.com/s/f71b3e71/eAUp7M93eUqcOvJSV8_qlw?u=https://subscriber.politicopro.com/article/2020/09/us-blocks-certain-chinese-products-over-forced-labor-1993420

^[5] Lima, Cristiano. “Oracle won the TikTok sweepstakes. It’s inheriting its political problems, too.” Politico Pro, 14 Sep. 2020. https://link.edgepilot.com/s/c1c9de60/p_LW4Poiq0qktn4oKTtMiA?u=https://subscriber.politicopro.com/article/2020/09/oracle-won-the-tiktok-sweepstakes-its-inheriting-its-political-problems-too-1993608

^[6] Swanson, Ana. “Trump Administration to Ban TikTok and WeChat from U.S. App Stores.” New York Times, 18 Sep. 2020. https://link.edgepilot.com/s/0e1638ad/Ishzs2nUvU6hVmI6AywDcw?u=https://www.nytimes.com/2020/09/18/business/trump-tik-tok-wechat-ban.html

^[7] Moens, Barbara. “Brussels launches probe to extend U.S. biodiesel dumping measures.” Politico Pro, 14 Sep. 2020. https://link.edgepilot.com/s/1c18367a/p0QNtKHZYECwmZkaNvQTww?u=https://subscriber.politicopro.com/article/2020/09/brussels-launches-probe-to-extend-us-biodiesel-dumping-measures-3983860