Trade Update (March 23)
No Tariff Relief for China
As the coronavirus continues to halt the global economy, President Trump indicated on Wednesday (Mar. 18) that he has no plans to suspend tariffs on more than $350 billion of Chinese goods.
More than 160 companies sent the president a letter to “provide tariff relief as one of the measures to help those hurting financially from the economic effects resulting from the current public health crisis.” President Trump initially questioned whether the coalition requesting the action, Americans for Free Trade, was an American organization, prompting a response from the group.
“This letter calling for President Trump to suspend tariffs was not sent by the Chinese,” Jonathan Gold, a spokesperson for the group, said. “It was sent by a coalition of 160 American business associations representing thousands of American businesses and millions of American workers … who have been paying for tariffs since the President’s trade war began.”
The request also addresses duties the administration has imposed on steel and aluminum imports from around the world, as well as a request for relief on forest products. Additionally, the coalition includes groups representing farmers, natural gas and oil companies, and other importers/exporters linked to critical supply chains.
To read the letter in its entirety, click here.
On Friday (Mar. 20), China agreed to its biggest purchase of American wheat since March 2018, when President Trump first imposed duties on steel and aluminum. The Department of Agriculture announced the purchase at 340,000 metric tons.
China committed to purchasing $200 billion of U.S. goods and services over the next two years when it signed the “Phase One” trade deal in January.
Ford and GM Halt Production
Ford and General Motors announced they would halt production on all North American plants through March 30.
An employee at Ford’s Michigan Assembly Plant tested positive for the coronavirus on March 18, which prompted its closing and all other plants to close by Thursday (Mar. 19).
Autos Determining Whether or Not to Make Ventilators, Medical Equipment
While GM, Ford, and Fiat-Chrysler all announced they would halt production, GM is studying whether to retool those shuttered production lines to make ventilators and other critical medical equipment in response to the coronavirus pandemic.
According to Politico, GM CEO Mary Barra was in contact with administration officials on Wednesday (Mar. 18) and said it would work to find solutions during this “difficult time.” The U.S. faces a severe shortage of life-saving ventilators if hospitals become overwhelmed.
President Trump has sought to invoke the Defense Production Act, which would allow him to direct domestic manufacturers to produce medical supplies and other necessary items during the crisis.