Trade Update (November 9)
Late this week, two European Union (EU) diplomats said EU trade ministers are planning to approve retaliatory tariffs against the U.S. over the Airbus-Boeing dispute on Monday (Nov. 9). The European Commission can technically make the call alone; however it also wants the backing from EU countries.
Earlier this year, Brussels won a case at the World Trade Organization (WTO) regarding the U.S.’ “excessive” subsidies for Boeing. This gave the EU the right to retaliate on about $4 billion worth of U.S. goods.
“The decision has been made. It’s now up to the Commission on how they will execute this,” one the EU diplomats said.
According to another official aware of the plan, the Commission will also leave the door open to negotiations.
US-Mexico Deal on Electrical Transformers
On Thursday (Nov. 5), the U.S. announced Mexico has agreed to closely monitor shipments of certain steel parts used to make transformers for electricity in exchange for being exempted from potential U.S. import restrictions.
This deal will help address the Trump administration’s concerns about Mexican imports of “grain-oriented electrical steel” from foreign suppliers that are then used to make transformer laminations and cores exported to the U.S.
The Office of the U.S. Trade Representative (USTR) said the U.S. and Mexico will communicate regularly on the implementation of the agreed upon measures.
This week, the Commerce Department set preliminary import duties on goods from Vietnam after determining its currency is undervalued.
The decision stems from a case involving passenger car and light truck tires from Vietnam filed by the United Steelworkers union. In 2019, the U.S. imported approximately $469.6 million worth of the passenger tires from Vietnam.
Commerce said it set the preliminary countervailing duties (CVD) of 6.23 to 10.08 percent on the tires to offset the illegal subsidies received by Vietnamese producers and exporters.
This action from Commerce comes after USTR decided to investigate Vietnam’s currency practices. Commerce will announce its final duty determination in the case on or about March 16.
Kenya Trade Agreement
On Tuesday (Nov. 3), the U.K. and Kenya reached a trade deal that will ensure Kenyan businesses will not see any new tariffs at the end of the Brexit transition period.
Kenya’s main exports to the U.K. include coffee, tea and spices, cut flowers, and vegetables.
The agreement will rollover Kenya’s ratification of the East African Community (EAC) trade bloc’s Economic Partnership Agreement with the EU. Kenya is the only nation in the bloc to have ratified the deal.
The other five members of the EAC bloc, including Burundi, Rwanda, Tanzania, Uganda, and South Sudan, have said they oppose Kenya signing the deal with the U.K. alone.
In separate news, the second round of U.S.-Kenya trade talks are set to conclude next week.
U.K. Trade Secretary Liz Truss said on Monday (Nov. 2) that negotiations for a U.K.-U.S. trade deal are in “advanced stages” and that the two sides have agreed to continue talks in the weeks after the American election.
“A significant proportion of legal text has been agreed across multiple chapters,” Truss said in a written statement to parliament. “We believe we are in a good position to move forward after the U.S. election,” she added.
To view Truss’s statement, click here.
 Moens, Barbara & Vela, Jakob Hanke. “EU set to impose tariffs on Boeing as of next week.” Politico Pro, 6 Nov. 2020. https://link.edgepilot.com/s/2494850e/A5_Z9uoFUEKGSxF8gQShQg?u=https://subscriber.politicopro.com/article/2020/11/eu-set-to-impose-tariffs-on-boeing-as-of-next-week-3985152
 Palmer, Doug. “U.S., Mexico reach deal on electrical transformers.” Politico Pro, 5 Nov. 2020. https://link.edgepilot.com/s/a09db501/LabPEAqecku-ZGTgTBgO_g?u=https://subscriber.politicopro.com/article/2020/11/us-mexico-reach-deal-on-electrical-transformers-3985095
 Palmer, Doug. “U.S. hits Vietnam with duties for undervaluing its currency.” Politico Pro, 4 Nov. 2020. https://link.edgepilot.com/s/d3748246/cE9h4IsmvUOzstIV7kV1fA?u=https://subscriber.politicopro.com/article/2020/11/us-hits-vietnam-with-duties-for-undervalued-currency-2016445
 Lanktree, Graham. “U.K. and Kenya reach trade deal.” Politico Pro, 3 Nov. 2020. https://link.edgepilot.com/s/95366e3b/0jAaTW-jfUqEGb4-ioM7Fg?u=https://subscriber.politicopro.com/article/2020/11/uk-and-kenya-reach-trade-deal-3985029
Lanktree, Graham. “U.S.-U.K. trade talks to continue after American election.” Politico Pro, 2 Nov. 2020. https://link.edgepilot.com/s/66a25478/L8V886j9aUGomtRyGtO5iQ?u=https://subscriber.politicopro.com/article/2020/11/us-uk-trade-talks-to-continue-after-american-election-3984996