On The Hill

Trade Update (June 29)

Jun 29, 2020 | SHARE  
Supreme Court, Steel
 
On Monday (Jun. 22), the Supreme Court declined to hear a case brought by U.S. importers challenging the Trump administration’s national security-based tariffs on steel. President Trump imposed tariffs on steel imports in 2018, and the recent decision effectively ends any potential legal challenges and leaves the duties in place.
 
The decision could encourage Trump to take additional tariff actions without concern over the Supreme Court, leaving the responsibility on Congress to decide whether they want to limit the executive’s tariff powers. At this moment, neither party has expressed interest in addressing the issue.
 
Both the U.S. Court of International Trade and the U.S. Court of Appeals sided with the Trump administration in previous rulings.
 
“The decision … is acknowledgment once again that Congress acted within its constitutional authority when it authorized the president to take action to adjust imports that threaten to impair our national security,” President of the American Iron and Steel Institute Thomas Gibson said in a statement.[1]
 
 
Canada Aluminum
 
The Trump administration is considering reimposing tariffs on aluminum imports from Canada, according to officials familiar with the issue. 
 
On Tuesday (Jun. 23), Canada’s Ambassador to the U.S. Kristen Hillman said Canada’s aluminum exports were not causing any harm to the U.S. market.
 
“We’re emphasizing with American friends the fact that we have this deep, mutually supportive industry and that far from being harmful to the American aluminum sector, our aluminum exports are indeed a great help and benefit,” Hillman said.[2]
 
In the May 2019 agreement, the U.S. and Canada agreed to establish ways to monitor steel and aluminum trade between the two countries.
 
On Wednesday (Jun. 24), the U.S. Chamber of Commerce and the National Foreign Trade Council (NFTC) warned the administration against re-imposing tariffs.
 
“It would completely undermine the spirit of our newly negotiated USMCA and would reignite trade tensions with our biggest trading partner,” NFTC President Rufus Yerxa said in a statement.
 
“It will also hurt the most dynamic U.S. manufacturers in sectors like autos, food products and construction, all in a vain effort to prop up inefficient domestic aluminum producers by branding Canada a national security threat,” he added.[3]
 
 
EU Retaliation Tariffs
 
The Office of the U.S. Trade Representative (USTR) is weighing new tariffs on $3.1 billion worth of exports from France, Germany, Spain, and the U.K. These exports include beer, gin, vodka, olives, and chocolates. The retaliatory duties would be a part of the long-running dispute over European government subsidies for Airbus.[4]
 
The U.S. already has retaliatory duties on $7.5 billion worth of European goods in the dispute.
 
USTR is asking for comments on three lists of goods: those already subject to retaliatory tariffs, those previously considered for tariffs, and the list of new potential targets. The statement lays out a month-long public comment period ending July 26.[5]
 
To view the Federal Register Notice, click here.
 
To view the USTR Comments Portal, click here.
 
On Thursday (Jun. 25), the World Trade Organization (WTO) informed Brussels of a possible delay to the decision on whether the EU can impose tariffs on the United States over subsidies for Boeing.
 
The decision had been expected in May or June.[6]
 
“The EU is very concerned about this and we have communicated this to the WTO,” a European Commission spokesperson said.
 
“We believe that the delay would not be justified, even in the context of COVID-19 and that it would be detrimental to the EU’s retaliatory rights under WTO rules,” they added.
 
 
WTO
 
The World Trade Organization (WTO) could soon rule whether President Trump violated international trade rules by imposing tariffs on $350 billion of Chinese goods.
 
The decision will initially go to the United States and China, and then will be made public after it is translated into all the official WTO languages. This process could take months.
 
“Based on the timetable agreed between the parties and the panel, the panel expects to issue its final report to the parties by the end of June 2020,” said a chair of the dispute panel in April.[7]
 
 
Commerce Announces New Investigation
 
On Tuesday (Jun. 23), the Department of Commerce announced the initiation of imports of passenger vehicle and light truck (PVLT) tires from South Korea, Taiwan, Thailand, and Vietnam, and a countervailing duty (CVD) investigation of imports of PVLT tires from Vietnam.
 
The investigations were in response to petitions filed in May by the United Steelworkers (USW) union representing workers at U.S. tire plants. Commerce is investigating whether the tires in the four countries are being sold at less than fair value, and whether producers in Vietnam were receiving unfair subsidies for PVLT tires.
 
“Even though demand for PVLT tires increased, domestic producers were still forced to grapple with reduced market share, falling profits and lost jobs,” USW International President Tom Conway said.
 
In 2019, the United States imported almost $4 billion in tires from the four nations, including around $2 billion from Thailand and $1.2 billion from Korea. Tire imports from the four countries have risen nearly 20 percent since 2017.[8]
 
Senators Rob Portman (R-OH) and Sherrod Brown (D-OH), along with nine other colleagues, released a letter Tuesday supporting the case.
 
To view Commerce’s announcement, click here.
 
To view Portman and Brown’s letter, click here.
 
 
References
 
 
 
[3] “Business groups oppose Section 232 tariffs on Canadian aluminum.” Inside U.S. Trade, 24 Jun. 2020. https://link.edgepilot.com/s/b5086d05/6r4gmv3q0EyOnFBfLtu30g?u=https://insidetrade.com/trade/business-groups-oppose-section-232-tariffs-canadian-aluminum
 
 
[5] Baschulk, Bryce. “U.S. Targets $3.1 Billion of EU and U.K. Imports for New Tariffs.” Bloomberg, 24 Jun. 2020. https://link.edgepilot.com/s/b7ae97ac/As49Xgx8IUK2dF5c18rfiQ?u=https://www.bloomberg.com/news/articles/2020-06-24/u-s-targets-3-1-billion-of-eu-u-k-imports-for-new-tariffs
 
 
 
[8] Beech, Eric & Shepardson, David. “U.S. probing tire imports from South Korea, Thailand, Taiwan, Vietnam.” Reuters, 23 Jun. 2020. https://link.edgepilot.com/s/0eb3e309/whwYqFKjM0eiXrrgrUAZ9g?u=https://www.reuters.com/article/us-usa-trade-tires/us-probing-tire-imports-from-south-korea-thailand-taiwan-vietnam-idUSKBN23U3BL