Trade Update (February 11)
|State of the Union Address
On Tuesday (Feb 5), President Trump gave his State of the Union Address. The address was originally scheduled for Tuesday, January 29th, but was postponed due to the government shutdown. During the address President Trump discussed the ongoing negotiations with China, saying, “it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit, and protect American jobs.” He also stated that passing the US-Mexico-Canada Agreement (USMCA) would “bring back our manufacturing jobs in even greater numbers, expand American agriculture, protect intellectual property, and ensure that more cars are proudly stamped with our four beautiful words: ‘Made in the USA.’” To conclude the trade portion of his address, he asked that Congress pass the United States Reciprocal Trade Act. The bill, introduced by Rep. Sean Duffy (R-WI), would expand President Trump’s ability to impose tariffs on another country if he believes its tariff and non-tariff measures are unfair or too restrictive. Despite President Trump’s request for Congress to pass the bill, Senate Finance Chairman Chuck Grassley (R-IA) has stated that the measure will not be considered in the Senate. House Speaker Rep. Nancy Pelosi (D-CA-12) also said she will not support Duffy’s bill.
Presidential Trade Authority
At the end of January, Senators Pat Toomey (R-PA) and Mark Warner (D-VA) introduced S. 287, which would “impose limitations on the authority of the president to adjust imports that are determined to threaten to impair national security.” The companion bill, H.R. 940, was introduced in the House by Reps. Mike Gallagher (R-WI-08) and Ron Kind (R-WI-03).
This week, Sens. Rob Portman (R-OH) along with Doug Jones (D-AL), Joni Ernst (R-IA), Lamar Alexander (R-TN), Dianne Feinstein (D-CA), Deb Fischer (R-NE), Kyrsten Sinema (D-AZ), and Todd Young (R-IN) introduced S. 365, The Trade Security Act. This bill differs from S. 287 in that it requires the Department of Defense to “justify the national security basis for new tariffs under Section 232” and allow Congress to pass a joint resolution of disapproval that could block the tariffs, rather than requiring Congressional approval before the tariffs are levied. Both bills will be referred to the Senate Finance Committee where Chairman Grassley (R-IA) will hopefully negotiate a bipartisan compromise.
Senate lawmakers met with US Trade Representative Robert Lighthizer on Wednesday (Jan 6). During the meeting, senators stressed the importance of removing steel and aluminum tariffs on Canada and Mexico before the USMCA comes up for a vote. Despite the 90 minute meeting, senators did not receive much clarity on the issue. Senator John Cornyn (R-TX) said, “I told the ambassador [Lighthizer] that I support the USMCA, and I’d like to try to help him get it passed, but that it would make it immeasurably harder if the president decided to withdraw from NAFTA in the interim to try to jam Congress.”
Fabricated Structural Steel from Canada, Mexico, and China
On Monday (Feb 4), the American Institute of Steel Construction, LLC filed antidumping (AD) and countervailing duty (CVD) petitions against Fabricated Structural Steel (FSS) from Canada, China, and Mexico. The estimated AD margins are: Canada – 31.46%, China – 218.85%, and Mexico – 41.39%. The Department of Commerce is expected to begin its investigation at the end of February and the International Trade Commission could issue a preliminary determination in March. To read the full petition, click here.
 “Remarks by President Trump in the State of the Union Address.” WhiteHouse.gov, 6 Feb 2019. https://www.whitehouse.gov/briefings-statements/remarks-president-trump-state-union-address-2/
 “Toomey and Warner Renew Fight to Restore Congressional Authority over ‘National Security’ Tariffs.” Toomey.Senate.gov, 30 Jan 2019. https://www.toomey.senate.gov/?p=op_ed&id=2338
 Portman, Jones, Ernst, Alexander, Feinstein, Fischer, Sinema & Young Introduce Trade Security Act to Reform National Security Tariff Process.” Portman.Senate.gov, 6 Feb 2019. https://www.portman.senate.gov/public/index.cfm/press-releases?ID=D95CA551-75CF-451D-9401-E28F53FB2209
 “Bicameral Congressional Trade Authority Act of 2019.” Toomey.Senate.gov, 30 Jan 2019. https://www.toomey.senate.gov/files/documents/232%20one%20pager.pdf
 Megan Cassella and Sabrina Rodriguez. “Senators press USTR to remove steel tariffs on Canada, Mexico.” PoliticoPro.com, 6 Feb 2019. https://subscriber.politicopro.com/trade/article/2019/02/senators-press-ustr-to-remove-steel-tariffs-on-canada-mexico-1148580
 Adams Lee. “New AD/CVD Petition Filed Against Fabricated Structural Steel from Canada, Mexico, and China.” China Law Blog, 7 Feb 2019. https://www.chinalawblog.com/2019/02/new-ad-cvd-petitions-filed-against-fabricated-structural-steel-from-canada-mexico-and-china.html