IDFA believes an agreement on the North American Free Trade Agreement needs to be reached soon to meet the deadlines set forth in the Trade Promotion Authority legislation and allow for a vote on the new agreement in this Congress. An agreement in principle is likely to be concluded sometime in the next two weeks.
U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Secretary Ildefonso Guajardo spent most of last week negotiating key sticking points such as auto rules of origin and dispute settlement. Ministerial-level talks will reconvene on May 7 after Ambassador Lighthizer returns from China (see "U.S.-China Trade Talks" below), but negotiations on technical issues continue almost daily. IDFA continues to urge USTR and the White House to address Canada’s Class 7 milk pricing policies in the modernized agreement.
May Day Tariff Delay
As many countries celebrated springtime with May Day festivities on Tuesday, others will be sending a mayday distress signal if they aren’t able to negotiate permanent exemptions from looming Section 232 tariffs on aluminum and steel. Late Monday night, the administration announced that new tariffs for imports of 10 percent on aluminum and 25 percent on steel that were set to take effect at midnight had been postponed for several countries. Canada, Mexico and the European Union were granted a one-month extension to continue negotiations on voluntary export limits. Argentina, Australia and Brazil have reached “agreements in principle,” which are expected to be finalized in the next 30 days. South Korea has been granted a permanent exemption after agreeing to cap its steel exports to the United States.
The extensions were expected after Commerce Secretary Wilbur Ross said over the weekend that some countries would be granted extensions while others would be required to limit exports through quotas or face the new tariffs.
Such tariffs could limit resources, posing significant risk to IDFA members that rely on steel or aluminum imports for manufacturing equipment or packaging. The affected countries also could retaliate with measures to block American agricultural exports, like dairy products.
U.S.– China Trade Talks
Several administration officials traveled to China on Tuesday to meet with Chinese officials and discuss the U.S. Section 301 investigation into Chinese practices and policies on intellectual property, as well as China’s trade surplus with the United States. The U.S. officials are U.S. Trade Representative Robert Lighthizer; Treasury Secretary Steven Mnuchin; Commerce Secretary Wilbur Ross; Terry Branstad, ambassador of the United States to China; Everett Eissenstat, deputy assistant to the president for International Economic Affairs; Larry Kudlow, director of the National Economic Council; and Peter Navarro, Director of the White House National Trade Council.
Tensions with China remain high after the U.S. threatened to impose tariffs on $50 billion worth of Chinese goods via its Section 301 investigation. This trip could help ease those tensions but meaningful outcomes are not anticipated, according to media reports.
For more information, contact Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.