On The Hill

USMCA’s Latest

On Thursday (June 27), Rep. Earl Blumenauer (D-OR) said that despite recent forward momentum between the Trump administration and Congress to work out issues in the United States-Mexico-Canada-Agreement (USMCA), there won’t be enough time to get the deal approved this summer. The Trump administration hoped to pass the trade deal before Congress breaks for its August recess but Blumenauer’s comments likely foreshadow a recess with no deal. The White House formally notified Congress last month that it is starting the approval process for the trade agreement, triggering a 30-day period that must transpire before the Trump administration is allowed to submit to Congress the legislation that would implement the pact’s terms.^[1] Blumenauer leads the House Ways and Means Committee’s trade panel and sits on a nine-member working group tapped by House Speaker Nancy Pelosi to negotiate some changes with U.S. Trade Representative Robert Lighthizer that would satisfy Democrats. He met with Lighthizer at least twice this week, when the trade chief met with the working group Wednesday and the Democratic caucus Thursday. The working group wants to meet with Lighthizer “on a weekly basis until we get it done,” Blumenauer said. During this week’s meeting, which was the first time Lighthizer sat down with the nine members, Blumenauer said the conversation focused primarily on one of Democrats’ four major issues: access to medicines. He called the meeting “positive and constructive” but indicated there has been little movement beyond the outlining of concerns and demands.^[2] House Speaker Nancy Pelosi (D-CA) said Thursday (June 27) that USMCA may need to be reopened and changed with “surgical” precision. Although she remained adamant that House Democrats would not heavily change the deal, it could pose problematic for passing it before August. Pelosi and Democrats continue to ask for stricter enforcement provisions and environmental protections in the deal, along with a shorter term on the 10-year exclusivity for biologic drugs.

Trump, Xi Set For G20 Showdown

President Trump and Chinese President Xi Jinping are set for Saturday’s (June 29) long-awaited meeting at the G20 Summit in Osaka, Japan. The U.S. and China tentatively agreed that both leaders could emerge from the meeting with a temporary ceasefire in order to resume talks. That means Trump would hold off on imposing tariffs on the remaining $300 billion worth of Chinese goods. Trump also suggested on Wednesday that he could impose a 10 percent, instead of 25 percent, tariff on those goods if talks this week don’t result in progress.^[3]  According to a Wall Street Journal report, Xi will present Trump with terms for the countries to reach a truce, which includes the US dropping its ban on selling US technology to the Chinese telecom behemoth Huawei. Congressional leaders in both parties warned Trump against lifting the Department of Commerce’s (DOC) ban as a means of concession during his talks with Xi. The sit-down is scheduled for Friday, 10:30 pm EST.

Supreme Court Punts on Steel Tariffs

On Monday (June 24), the United States Supreme Court declined to hear a challenge to the constitutionality of President Trump’s imposition of tariffs, citing national security reasons. American steel importers asked in April for the Supreme Court to review a March ruling from the U.S. Court of International Trade that upheld the constitutionality of Trump’s use of Section 232 of the Trade Expansion Act of 1962 to impose tariffs. The court’s decision not to consider the case means that Court of International Trade’s ruling will remain. The case was filed by the American Institute for International Steel and two of its member companies: Texas-based Sim-Tex, a wholesaler of oil and gas pipe, and Kurt Orban Partners, an international steel trader based in California.^[4] Senate Finance Committee Chairman Chuck Grassley (R-IA) is working on legislation that would impose the president’s power to impose tariffs through Section 232, although the bill will likely not be released before the August recess.

References

^[1] Cassella, Megan. “Blumenauer flatly says summer USMCA approval ‘won’t happen.’” Politico Pro. 27 June 2019. https://subscriber.politicopro.com/article/2019/06/blumenauer-dashes-hopes-of-summer-usmca-approval-it-wont-happen-1561296

^[2] Rodriguez, Sabrina. “USMCA this summer? ‘It won’t happen.’” Politico Morning Trade. 28 June 2019. https://www.politico.com/tipsheets/morning-trade

^[3] Donnan, Shawn. “Trump, Xi to meet at trade-war crossroads fraught with risks.” Bloomberg. 28 June 2019. https://www.bloomberg.com/news/articles/2019-06-28/trump-xi-to-meet-at-trade-war-crossroads-fraught-with-risks

^[4] Rodriguez, Sabrina. “Supreme Court declines to hear challenge to Trump’s steel tariffs.” Politico. 24 June 2019. https://www.politico.com/story/2019/06/24/supreme-court-trump-steel-tariffs-1378319