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On The Hill

Trade Update (November 18)

Nov 5, 2019 | SHARE  

Ross Expects China Deal by December

 On Friday (Nov. 15), Commerce Secretary Wilbur Ross said he expects the U.S. will agree to a trade deal with China before the next round of tariffs is set to kick-in on Dec. 15. Ross made the comments on Fox Business and said the deal was “down to the last details.” The ‘will they or won’t they’ make a deal has been seesawing the past several weeks, as it appeared last month that the two nations had struck a “Phase One” agreement in the trade deal. Just a week later, President Trump dismissed such an idea and adding more uncertainty to the trade war. The administration wants China to purchase $40-$50 billion in agricultural products, most notably pork, in exchange for easing tariffs on imports of Chinese goods. China continues to press for eased restrictions on its telecom giant Huawei but Ross did not give any signal whether the administration was willing to do so. According to a report on Wednesday (Nov. 14), the Commerce Department is expected to grant a six-month extension to permit rural telecom firms to do some transactions with Huawei. 


Another Farm Bailout En Route

The Department of Agriculture announced late Friday (Nov. 15) afternoon that will begin distributing another of tariff-related relief payments to farmers and ranchers. Farmers and ranchers have been hit exceptionally hard by the trade war with China, as the administration has already paid farmers $6.7 billion for their 2019 production. That figure is added to the tab of an additional $8.6 billion provided from production in 2018. Row crop growers, hog farmers and dairy producers have received the most funds so far under the program, according to USDA. A potential third round of direct aid could follow in January, if needed. That would bring the total aid for 2019 production to $14.5 billion. “This second tranche of 2019 [Market Facilitation Program] payments, along with already provided disaster assistance, will give farmers, who have had a tough year due to unfair trade retaliation and natural disasters, much needed funds in time for Thanksgiving,” USDA Secretary Sonny Perdue said in a statement.[1] On Thursday (Nov. 14), the office of U.S. Trade Representative (USTR) Robert Lighthizer released a statement regarding China’s decision to lift its ban on poultry imports from the U.S. China banned all U.S. poultry since Jan. 2015 due to an avian influenza outbreak in Dec. 2014. The U.S. exported over $500 million worth of poultry products to China in 2013 and USTR expects that number to top $1 billion annually. “China is an important export market for America’s poultry farmers, and we estimate they will now be able to export more than $1 billion worth of poultry and poultry products each year to China,” Lighthizer said. “Reopening China to U.S. poultry will create new export opportunities for our poultry farmers and support thousands of workers employed by the U.S. poultry industry,” Lighthizer added. 


Trump Heading Across the Pond in December

President Trump will travel to the United Kingdom (UK) on Dec. 2, just two days before a meeting of NATO leaders. The visit comes just days before the UK will hold a general election on Dec. 12. Labour Party Leader Jeremy Corbyn accused President Trump of meddling in the election in what he sees as an apparent boost to current Prime Minister and Conservative Party Leader Boris Johnson.


USMCA is ‘Imminent,’ Pelosi Says

 On Thursday (Nov. 14), House Speaker Nancy Pelosi said a deal between House lawmakers and the Trump administration on the United States-Canada-Mexico Agreement (USMCA) could be announced by year’s end. Pelosi called the trade deal “imminent” and met with the nine-member working group tasked with negotiating USMCA with the administration, as the former continues to seek provisions related to labor enforcement, environmental standards, and prescription drug pricing. Pelosi said she plans to speak with House Ways and Means Chairman Richard Neal (D-MA) and proceed from there. The House is set to adjourn on Dec. 12, leaving just 14 legislative days to get the deal passed, as the legislation is expected to pass the Republican-held Senate. According to Politico, a handshake agreement between Pelosi and Lighthizer could be in place by Thanksgiving. CHCG will continue to provide the latest developments on USMCA in its weekly Trade Update.


EU Auto Tariffs: Happening or Not?

President Trump said on Wednesday (Nov. 13) that he would soon make a decision whether to impose tariffs on EU autos and auto parts. The tariffs, which gives the president power to impose under Section 232 of the Trade Expansion Act of 1962 due to national security threats, were first announced by Trump on May 17. Trump gave Lighthizer 180 days to negotiate agreements with Japan and the EU on the matter, a deadline which expired this week.


References

[1] McCrimmon, Ryan. “USDA opens another round of trade aid for farmers despite reported progress in China talks.” Politico Pro. 15 Nov. 2019. https://subscriber.politicopro.com/article/2019/11/usda-opens-another-round-of-trade-aid-for-farmers-despite-reported-progress-in-china-talks-3974109

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