Trade Update (January 14)
|US-China Trade Relations
Deputy US Trade Representative (USTR) Jeffrey Gerrish and a team of trade negotiators met with Chinese officials in Beijing this week (Jan 7-9). Originally scheduled for just two days, the talks were extended to three days and China’s top trade negotiator Liu He stopped by “to say hello.” After the talks, both countries released statements pledging to remain in close contact to address “areas of common concern.” Chinese officials reported that the two countries made progress on structural issues related to forced technology transfers and the protection of intellectual property rights. The USTR statement applauded the progress, but highlighted China’s pledge to purchase a “substantial amount of agricultural, energy, manufactured goods, and other products and services from the US.”
US-EU Trade Relations
EU trade chief Cecilia Malmstrom and USTR Robert Lighthizer met in Washington, DC this week to discuss the potential US-EU trade deal. According to reports, they have not agreed on the scope of the negotiations. The European Commission (EC) has made it clear that agriculture will not be included in the talks, but EC is preparing mandates to cover the removal of tariffs on industrial goods and to cover possible regulatory cooperation in pharmaceuticals, medical devices, and cybersecurity. Before Malmstrom met with Senate Finance Committee Chairman Chuck Grassley (R-IA), he said, “I don’t know how anybody in Europe that wants a free trade agreement with us can expect it to get through the US Senate if you don’t want to negotiate agriculture.”
Presidential Trade Powers
White House trade adviser Peter Navarro’s office, the USTR office, and the Commerce Department have been crafting a bill to give President Trump “broader authority to increase US tariffs if he considers other countries’ tariff and non-tariff measures to be too restrictive.”
Rep. Sean Duffy (R-WI) supports the bill, entitled United States Reciprocal Trade Act, and is trying to gather co-sponsors before introducing it. In addition to giving the president the ability to increase tariffs on specific goods (which would take effect 30 days after the publication of a Federal Register notice) and negotiate agreements to reduce tariff and non-tariff barriers, an advisory role would be given to the heads of USTR, Commerce, and Treasury. It would also require the president to consult with Senate Finance and House Ways and Means committees. A draft of the bill can be viewed here.
President Trump is expected to urge Congress to pass the bill during his State of the Union address at the end of January. In a tweet, Senator Pat Toomey (R-PA)–an opponent of the President’s tariffs–said, “Congress should be reasserting its constitutional responsibility on trade, not yielding even more power to the executive branch.” Finance Chairman Grassley also highlighted the important role Congress plays in trade negotiations in an op-ed, “I plan to continue engaging the administration regarding the trade dispute with China, holding the administration accountable as it works to ensure all sectors of the U.S. economy benefit from future trade deals and implementing new trade agreements reached in the coming months and years. The Constitution makes Congress central to U.S. trade policy, and I’m committed to discharging this duty vigorously and diligently.”
Organization for International Investment (OFII) Conference Call
OFII supports the international business community in Washington, DC. On Wednesday (Jan 9), OFII sponsored a Trade Policy Call. Read notes from the call by clicking here.
116th Congress Committee Assignments
Senator Jim Risch (R-ID) will serve as Chairman of the Senate Foreign Relations Committee. In addition to the 7 members remaining on the committee, Sens. Mitt Romney (R-UT), Lindsey Graham (R-SC), and Ted Cruz (R-TX) will also join the panel.
Rep. Richard Neal (D-MA) will serve as Chairman of the House Ways and Means Committee. Ten additional democrats will join the committee of 24: Reps. Gwen Moore (D-WI), Dan Kildee (D-MI), Brendan Boyle (D-PA), Don Beyer (D-VA), Dwight Evans (D-PA), Brad Schneider (D-IL), Tom Suozzi (D-NY), Jimmy Panetta (D-CA), Stephanie Murphy (D-FL), and Steven Horsford (D-NV). Republicans will have 16 seats, and only needs to fill two vacant spots. The Trade Subcommittee Chairman has not yet been named, but Rep. Earl Blumenauer (D-OR) is the most senior member. However, Reps. Bill Pascrell (D-NJ) and Rep. Ron Kind (D-WI) have also expressed interest in the position.
 Evelyn Cheng & Everett Rosenfeld. “US-China trade war: Beijing says both sides have expressed a desire to hammer out a deal.” CNBC.com, 7 Jan 2019. https://www.cnbc.com/2019/01/07/us-china-trade-beijing-says-both-sides-expressed-will-to-make-deal.html
 Everett Rosenfeld. “Beijing says latest US-China trade talks were extensive, made progress on forced tech transfers.” CNBC.com, 9 Jan 2019. https://www.cnbc.com/2019/01/10/beijing-issues-statement-on-us-china-trade-talks.html
 “Statement on the United States Trade Delegation’s Meetings in Beijing.” USTR.gov, 9 Jan 2019. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/january/statement-united-states-trade
 Chris Prentice. “EU trade chief says U.S. talks will not include agriculture.” Reuters: Washington, 9 Jan 2019. https://uk.reuters.com/article/uk-eu-markets-regulator/uk-watchdog-intervenes-to-release-mortgage-prisoners-idUKKCN1P41I4?il=0
 Jenny Leonard & Jennifer Jacobs. “White House to Roll Out Bill to Expand Trump’s Tariff Powers, Sources Say.” Bloomberg.com, 8 Jan 2019. https://www.bloomberg.com/news/articles/2019-01-11/trump-ends-shutdown-talks-raising-odds-he-ll-declare-emergency
 “Grassley Op-ed: Free, fair trade will continue to be priority for Finance Committee.” ChuckGrassley.senate.gov, 10 Jan 2019. https://www.grassley.senate.gov/news/news-releases/grassley-op-ed-free-fair-trade-will-continue-be-priority-finance-committee
 “Chairman Neal welcomes new democratic members to the Ways & Means Committee.” Ways & Means Committee Chairman, 9 Jan 2019. https://waysandmeans.house.gov/media-center/press-releases/chairman-neal-welcomes-new-democratic-members-ways-means-committee