No Images? Click here Breakfast Series Session Attendees:The Good, the Bad and the Ugly – Part 2 or 3? Well, the past two weeks, again, were turbulent. The GoodOn Friday, May 17, the USTR announced agreements with both Mexico and Canada to lift the 232 tariffs on steel and aluminum imports from those countries and also the removal of retaliatory tariffs imposed on imports of U.S. products. The action was in response to statements by both Mexico and Canada that they could not approved the USMCA agreement with those tariffs in place – and also recognizing that members of Congress, on both sides of the aisle, also wanted them removed in order for the USMCA to move forward. You can read the agreements here: Following the removal, both Mexico and Canada signaled that the process to approve the agreement in their legislative bodies would move forward. The BadThen, last Thursday, the Administration announced that they would be placing tariffs on all imports from Mexico if Mexico did not immediately halt the flow of illegal migrants to our border. The announcement from the White House indicates that the President will be invoking the International Economic Emergency Powers Act (IEEPA). The details are contained in an analysis by the law firm of Dickinson Wright of Columbus, which has provided us with excellent analyses in the past. The imposition of tariffs would begin with a level of 5% on June 10 and would increase to 10% on July 1, to 15% on August 1, to 20% on September 1, and to 25% on October 1 – if appropriate action by Mexico is not taken. The announcement – and planned action - was immediately criticized by many groups including members of Congress on both sides as well as all industries that would be affected. Some industry associations, including the U.S Chamber of Commerce, indicated they considering taking legal action against the government over the planned action. Mexico announced it would send a high-level team to Washington this week to negotiate a resolution. Many on all sides indicated that the planned tariff action, if carried out, would damage the chances of USMCA passing Congress. The Chamber issued a press release on the White House emergency measures yesterday morning. A senior-level group from our Chamber, including myself, met with John Melle, Assistant USTR for the Western Hemisphere, in his office late last Wednesday to discuss the legislative activity needed to pass USMCA in the immediate time frame – say, before the August recess. Melle is the Chief Negotiator for the U.S. on the USMCA. Although he encouraged the group to work diligently in supporting the passage of USMCA as quickly as possible, no mention of or allusion to the announcement coming the next day from the White House was made. The UglyAlthough trade talks between the U.S. and China have been at a standstill, there have been activities taking place. On Sunday, June 1, China placed additional tariffs on $60 billion of U.S. imports in retaliation to President Trump’s ratcheting up tariffs on select Chinese imports to 25%. Also, the USTR announced that they will hold a public hearing on June 17 on the possibility of imposing 25% tariffs on a further US$300 billion worth of Chinese imports, including cellphones and laptops. Finally on China, the Administration President moved on May 15 to ban American telecommunications firms from installing foreign-made equipment that could pose a threat to national security, stepping up a battle against China by effectively barring sales by Huawei, the country’s leading networking company. Also, last Friday, the Administration announced that it was ending special trade treatment for India that exempts billions of its products from U.S. tariffs. Our Next Breakfast SessionWe have tentatively set Wednesday, June 19, as the date for our next session at Baker McKenzie. Put the date on your calendar. We will be sending out an announcement plus agenda before the end of this week. Thanks for your continued support. Ralph Biedermann |