Lewis Leibowitz, trade attorney and contributor to Steel Market Update, offers the following commentary on the latest developments in Washington:
Finally, a good day? President Trump and European Commission President Jean-Claude Juncker met Wednesday at the White House and issued a joint statement on their agreement to negotiate reductions in barriers between the U.S. and the EU. The two leaders said at an impromptu press conference that, while negotiations were continuing, neither side would impose new tariffs. This seems to exempt the EU from any new “national security” tariffs on autos and auto parts. Other aims were zero tariffs on industrial goods, and no subsidies on non-auto industrial goods. Soybeans were specifically mentioned in the joint statement, which is significant because of the serious criticism the administration has faced from ag-state members of Congress over Chinese retaliation against U.S. agricultural exports, hitting soybeans particularly hard.
The joint statement also stated the parties’ intention to resolve the steel and aluminum tariffs and the EU’s retaliatory tariffs. This is a tentative sign, but the first positive sign that things may be moving back from the brink. The Dow Jones Industrial Average zoomed 150+ points in the last half hour of trading.
The U.S. and the UK set an agenda for discussions about a new trade agreement commencing with the UK’s withdrawal from the European Union, currently scheduled for next March 29.
The administration is receiving increasing flak from Capitol Hill over the steel and aluminum tariffs. This was clearly a factor in the announcement of a goal to eliminate the steel and aluminum tariffs and the EU retaliation. This “break” (if it is one) cannot come soon enough for U.S. manufacturers, who continue to complain about loss of business and profits due to the Section 232 tariffs. Whirlpool downgraded their earnings projections because of rising steel prices in their appliance businesses. In January, Whirlpool received a boost from a safeguard action on large residential washing machines, which imposed tariffs and quotas on competing machines from Korea and Mexico, among other places. This week, however, Whirlpool claimed that higher steel prices have more than offset the benefits of the safeguard protection. Steel prices, which were traditionally higher in the U.S. than elsewhere, are now more than 50 percent higher than foreign prices, according to Whirlpool, whose earnings forecasts and stock price took a tumble yesterday.
The Photographic Industry Association launched a campaign to educate Congress on the effects of aluminum tariffs on the photographic industry. Photographic plates for industrial use are made largely of aluminum, and prices have skyrocketed since the aluminum tariff was imposed. One more industry with a disturbing story to tell about the collateral damage of trade wars.
The Law Office of Lewis E. Leibowitz
1400 16th Street, N.W.
Washington, D.C. 20036
Phone: (202) 776-1142
Fax: (202) 861-2924
Cell: (202) 250-1551
Tim TriplettRead more from Tim Triplett
Latest in Trade Cases
China Has Failed to Comply With WTO Commitments: AISI
The American Iron and Steel Institute (AISI) has laid out a case for China’s failure to comply with its World Trade Organization (WTO) obligations, which it joined in 2001.
Deputy USTR Hits Out at ‘Surge’ of Mexican Steel Imports
Deputy United States Trade Representative (USTR) Jayme White met on Wednesday with Mexico’s Under Secretary of Economy for Foreign Trade Alejandro Encinas, and discussed issues regarding the “surge” into the US of Mexican steel and aluminum imports.
Leibowitz: Europe Aims to Impose Countervailing Duties on EVs From China
Trade policy moves create great ironies sometimes. I often write about these ironies when the US acts against the interests of the country as a whole by protecting certain industries from international competition. But the US is not alone, especially in recent years as the World Trade Organization and the international geopolitical order have been […]
Leibowitz: Banning Inputs and Components—Effective Policy or Not?
As the global trading system, which used to be “rules-based,” continues its slide toward the absence (defiance? disregard?) of rules, governments around the world are trying new things.
Leibowitz: Warming Commercial Relations? The Raimondo Visit to China
Last week the Secretary of Commerce, Gina Raimondo, visited China for high-level meetings with the Chinese government. Her counterpart, Wang Wentao, China’s Commerce Minister, participated in the discussions. The four-day meeting included an announcement of two new working groups dealing with US-China economic relationships. The first was a forum to explain US export controls relating […]