The White House on May 29 issued a two-page statement announcing the Trump administration’s intent to impose 25 percent tariffs on $50 billion worth of goods imported by the United States from China by mid- to late-June.
The announcement occurred as Secretary of Commerce Wilbur Ross was scheduled to depart for Beijing, China, on June 2 to resume high-level consultations with Chinese government officials on increasing purchases of U.S. agricultural and energy products.
During a farm bill forum in Kansas on May 30, Secretary of Agriculture Sonny Perdue referred to Ross’s upcoming mission and said that Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney and other USDA staff experts would join Ross in China to engage on the agricultural discussions. The meetings are a follow up to an initial round of U.S.-China trade consultations with Chinese Vice Premier Liu He that wrapped up on May 19 in Washington.
Meanwhile, the White House announcement said a final list of Chinese goods that will be subject to the tariffs implemented under the national security provisions of Section 301 of the Trade Act of 1974 will include “industrially significant technology, including those related to the ‘Made in China 2025’ program.” The announcement said the final list will be announced by June 15, with the tariffs imposed “shortly thereafter.”
The May 29 announcement also said the United States plans to implement “specific investment restrictions and enhanced export controls” on Chinese entities and persons involved in the acquisition of industrially significant technology. The proposed investment restrictions and enhanced export controls are scheduled to be announced by June 30 and implemented shortly thereafter, according to the White House statement.
The announcement also said the United States will continue to pursue its case filed March 23 at the World Trade Organization alleging violations by China regarding trade-related discriminatory practices for licensing intellectual property.
“Likewise, the United States will request that China remove all of its many trade barriers, including non-monetary trade barriers, which make it difficult and unfair to do business there,” the White House announcement said. “The United States (also) will request that tariffs and taxes between the two countries be reciprocal in nature and value. Discussion with China will continue on these topics, and the United States looks forward to resolving long-standing structural issues and expanding our exports by eliminating China’s severe import restrictions.”
The White House also issued an accompanying “fact sheet” on “China’s unfair trade policies.”
Trump Administration Proceeds with Imposition of Steel, Aluminum Tariffs on Canada, Mexico and EU: Meanwhile, the White House announced May 31 that President Trump will proceed with the imposition of 25 percent tariffs on steel and 10 percent tariffs on aluminum imported from Canada, Mexico and the European Union (EU), effective at 12:01 a.m. on June 1.
Those countries and economic regions represent about half of U.S. metal imports, and initially had been granted temporary exemptions from the tariffs announced in March. During the intervening months, the Trump administration continued to negotiate for concessions, such as voluntary limits on their steel and aluminum imports to the United States and/or reducing tariffs on other U.S. exports. Commerce Secretary Ross said that while negotiations with the EU continued, the degree of progress made did not warrant either another temporary extension nor the granting of a permanent exemption, and that the United States also had failed to reach “satisfactory arrangements” with Canada and Mexico.
Ross continued to argue that the steel and aluminum tariffs were warranted on U.S. national security grounds, as determined by a Commerce Department investigation conducted under Section 232 of the Trade Expansion Act of 1962. But Canadian Foreign Affairs Minister Chrystia Freeland called such an assertion “absurd” with respect to Canada, which she called “probably the closest ally of the United States.” Freeland also asserted that the United States has a positive trade balance with Canada on steel and aluminum products.
The EU responded by saying it would issue a list of U.S. exports to Europe, including agricultural exports, that will be subject to proportional tariffs, and said it would file a petition with the World Trade Organization alleging that the U.S. tariffs violate WTO commitments, which would trigger consultations with the United States. Meanwhile, Canada and Mexico issued their own lists of U.S. products that will be subject to retaliatory tariffs.
The White House announcement did state that the United States had reached satisfactory “arrangements” on steel with Australia, Argentina and Brazil, as well as on aluminum with Australia and Argentina, and that tariffs would not be imposed on those countries.
NAFTA: Freeland was in Washington this week for a planned two-day meeting with U.S. Trade Representative Robert Lighthizer that was intended to focus heavily on how to rewrite the North American Free Trade Agreement’s provisions governing rules-of-origin that govern auto and auto parts trade in the hemisphere.
That visit was cut short – to two hours – and Freeland and Canada’s chief trade negotiator Steve Verheul departed Washington on the morning of May 30, with no progress reported.
During a May 31 joint press conference conducted by Canadian Prime Minister Justin Trudeau and Freeland in response to the U.S. imposition of steel and aluminum tariffs, Trudeau said he had offered last week to Trump to come to Washington to meet directly with the president to finalize a NAFTA deal. But he said Vice President Mike Pence had called him with a precondition for such a meeting – and that was that Canada accept the U.S. demand that a sunset clause be added to NAFTA that would require re-approval of the accord by all three countries after a certain period (U.S. negotiators have argued it be every five years) – a non-starter for both Canada and Mexico.