On The Hill

Trade Update (April 6)

Apr 6, 2020 | SHARE  
Kudlow Says No Tariff Relief in Sight
 
White House Economic Adviser Larry Kudlow said the Trump administration will not grant tariff relief payments because it would be complex and send the wrong message for the White House’s trade policies.
 
Kudlow told Bloomberg TV that “we never looked in any serious way at rolling back tariffs,” which comes just days after several news outlets reported that President Trump was considering some tariff relief. 
 
That relief would have come in the form of a 90-day grace period on paying tariffs, although it wouldn’t apply to import penalties on Chinese goods, steel, and other items subjected to recent trade actions. Additionally, Section 232 tariffs covering imports of steel and aluminum were never in play for relief.
 
A group of nearly 400 company CEOs and presidents wrote to President Trump on Tuesday (Mar. 31) stating that delaying duties would preserve cash flow and allow businesses to keep operations afloat.
 
“At the same time, delaying duties does not undermine the effect of tariffs on trade flows because the money is still due,” the group said in the letter.  
 
Labor unions and allies of President Trump’s trade policies, including Sen. Sherrod Brown (D-OH), who wrote to the U.S. Trade Representative (USTR) Robert Ligthizer, urged the president against the relief. 
 
“The argument that this move is necessary to increase ‘liquidity’ is also extremely troubling, as any flexibility it will afford will go to foreign producers and importers, while putting further strain on domestic manufacturers at a time when they can least afford it,” the United Steelworkers said in a statement on Wednesday (Apr. 1). 
 
 
EU to Suspend Medical Equipment Tariffs
 
The European Commission announced it will temporarily waive tariffs on medical equipment to help European Union (EU) countries combat the coronavirus pandemic. 
 
“This is our contribution to easing the pressure on prices for medical and protective equipment, and to making them more affordable,” Commission President Ursula von der Leyen said.
 
The measure includes protective gear and masks, as well as testing kits, ventilators, and other medical equipment. The Commission said the period would apply for six months, with the possibility of an extension if necessary.
 
 
Phase 4 Stimulus Package Slowly Finding Consensus
 
House Speaker Nancy Pelosi (D-CA) appeared to shift her tone on Friday (Apr. 3) toward a more “focused” Phase 4 coronavirus stimulus package. 
Both in a television appearance and talking with reporters Friday, Pelosi said it’s clear the next tranche of relief funds should be an expansion of the massive $2 trillion package the president signed into law last week — more money to aid states, cities and small businesses, expand unemployment benefits and another round of direct cash payments for Americans.[1]
 
“Let’s do the same bill we just did, make some changes to make it current,” Pelosi told reporters in the Capitol on Friday (Apr. 3).
 
The call comes after Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarty (R-CA) criticized Pelosi this week for pushing Democrat’s top legislative priorities in this next package, which would largely center around infrastructure and energy needs. Still, Pelosi reiterated that she would push for some top Democratic priorities, including additional federal worker protections for first responders and emergency personnel.  
 
Senator Lamar Alexander (R-TN) subscribed to the notion that there may be a need for a pause after passing the $2.2 trillion Phase 3 stimulus package but Republicans are acknowledging the need for more legislation to extend benefits for small businesses to pay employees and cover basic expenses. 
 
According to Politico, a source close to Pelosi said the alarming unemployment numbers have influenced her thinking on the need to limit the focus of the next legislative package, but cautioned that nothing is set in stone as Democrats have yet to even draft a bill.
 
The House and Senate remain out of session until April 20, so the timeline for a Phase 4 package remains uncertain. 
 
 
References
 
[1] Caygle, Heather. “Consensus starts to grow on ‘phase 4’ coronavirus relief.” Politico Pro. 03 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/pelosi-pivots-on-phase-4-coronavirus-relief-push-1910811

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