Trade Update (June 24)
Lighthizer on Capitol Hill
United States Trade Representative (USTR) Robert Lighthizer proclaimed his willingness to re-engage trade talks with China but said the outlook for a deal remains “uncertain.” Lighthizer was busy this week, as he appeared before the Senate Finance Committee on Tuesday and the House Ways and Means Committee on Wednesday. Lighthizer used his testimony to tout the administration’s tough negotiation measures and deferred to President Trump on any decisions to impose further tariffs. Democrats and Republicans on the respective committees largely agreed the North American Free Trade Agreement (NAFTA) needs overhauled, although they remain divided on certain provisions in the United States-Mexico-Canada Agreement (USMCA). Democrats continued to press Lighthizer and the Trump Administration’s approach to trade deals with foreign adversaries and allies alike. Senate Finance Committee Chairman Chuck Grassley (R-IA) questioned the administration’s further use of tariffs, saying it undermines the US’ credibility with its allies. Lighthizer said it’s in the interest of both the US and China to reach a deal. However, in talking about the potential for an agreement to include Chinese commitments on reducing overcapacity in sectors like steel, Lighthizer was cautious about the overall prospects for a deal. “I’m hopeful if we get an agreement — which is a big ‘if’ — that we can make headway on” reducing China’s excess capacity, Lighthizer said. If negotiations don’t resume, or talks fail again, Trump will have the legal authority in “a couple of weeks” to proceed with plans to raise tariffs on as much as $300 billion worth of additional Chinese goods, Lighthizer said. To read more of Lighthizer’s testimonies, click here for the Senate Finance hearing and click here for the Ways and Means hearing.
Trump, Xi Prepare for G20
US and Chinese negotiators are “scrambling” to formalize plans for President Trump and Chinese President Xi Jinping’s much-anticipated meeting at the upcoming G20 Summit in Osaka, Japan. Negotiating teams — led by Lighthizer and Treasury Secretary Steven Mnuchin on the U.S. side and Vice Premier Liu He on the Chinese side — are expected to meet in Osaka as early as next Tuesday, three days before the start of the G-20 leaders’ summit, to prepare for the high-stakes Xi-Trump meeting. The trade negotiators have not talked in the six weeks since the talks collapsed in early May. However, a phone conversation between Xi and Trump on Tuesday, during which the two confirmed their meeting in Osaka, has rekindled the process.
President Trump met with Canadian Prime Minister Justin Trudeau on Thursday (June 20), proclaiming that issues related to Canadian steel and aluminum imports had been “resolved.” Trump noted the recent deal from May to lift U.S. tariffs on steel and aluminum imports from Canada and Mexico came with a promise to guard against import surges. Countries can reapply tariffs to specific products, if imports spike. The countries also committed to clamping down on transshipment of products from Asia and Europe.
 Palmer, Doug. “Lighthizer: Getting a US-China trade deal a ‘big if.’ Politico Pro. 19 June 2019. https://subscriber.politicopro.com/article/2019/06/lighthizer-us-ready-to-re-engage-in-china-trade-talks-1541491
 Xin, Zhou. Wang, Orange. “China and US Negotiating Teams Scramble to Make a PLan for XI and Trump’s Osaka Summit.” South China Morning Post, Politico Pro. 20 June 2019. https://subscriber.politicopro.com/article/2019/06/china-and-us-negotiating-teams-scramble-to-make-a-plan-for-xi-and-trumps-osaka-summit-1546762
 Panetta, Alexander. “Trump Vows to ‘Call Justin’ if Problems Arise with Steel Deal.” Politico Pro. 20 June 2019. https://subscriber.politicopro.com/article/2019/06/trump-vows-to-call-justin-if-problems-arise-with-steel-deal-3462264