Which countries will dodge tariff ax? Answer by end of April

WASHINGTON (AP)—The Trump administration will decide by the end of April which countries will be spared from steep taxes on steel and aluminum imports.

U.S. Trade Representative Robert Lighthizer told the House Ways and Means Committee March 21 that some countries won’t have to pay the tariffs, which took effect March 23, while they try to negotiate exemptions.

President Donald Trump has imposed tariffs of 25 percent on imported steel and 10 percent on aluminum, saying that relying on foreign metals jeopardizes U.S. national security. He exempted Canada and Mexico from the tariffs, provided they reach an agreement to revamp the North American Free Trade Agreement.

Lighthizer said the administration is also negotiating tariff exemptions with the European Union, South Korea, Argentina and Australia and expects to begin talks with Brazil.

The EU has threatened to respond to the metals tariffs with taxes on a range of U.S. products, including jeans, motorcycles and bourbon.

EU Trade Commissioner Cecili Malmstrom met with U.S. Commerce Secretary Wilbur Ross, and the pair issued a joint statement March 21 saying the U.S. and EU has agreed to work on a resolution to the trade dispute “as rapidly as possible.”

The Commerce Department is separately reviewing companies’ requests for relief from the tariffs if, for example, the steel or aluminum they need is not produced in the United States.

The deadline for the metals tariffs comes just as the administration prepares to slap big tariffs and impose investment restrictions on China for strong-arming U.S. companies into handing over technology. It says theft of intellectual property is one reason for the United States’ massive trade deficit with China in goods: $375 billion last year.

Retaliation from China?

Members of Congress are worried that the aggressive action will invite a counterpunch from China and that U.S. farmers are especially vulnerable to retaliatory tariffs on American soybeans.

Lighthizer promised to strike back if China targets U.S. farmers.

“We can’t have a $375 billion trade deficit and not do anything to defend ourselves,” Lighthizer said.

Committee Chairman Kevin Brady, R-TX, said in his opening statement that the U.S. stands at a crossroads in trade.

“If we stand still—or worse, take the path of isolationism—we will abandon our greatest freedom and the very DNA of what makes us Americans, Brady said. “There is a better path. We are already seeing benefits from the historic tax cuts that the President just signed into law, which is increasing our competitiveness and making us the best place to do business in the world. Our trade policy must build on that growth.

“In a competitive world, it’s not enough to buy American—we have to sell American to the billions of customers outside the U.S. That’s how we help our local businesses and farmers, create American jobs and spur our economic growth.

“Mr. Ambassador, America must continue to lead.

“We lead—and Americans win—when we open up markets for our products and services through high-standard, ambitious and enforceable trade agreements. This must be our top priority.

“If we don’t break open new markets through trade deals with countries like Japan, the United Kingdom and the TPP-11—we’ll be left behind. China and Europe will write the rules and cut American producers and workers out of other markets. We can’t wait any longer while others pass us by.

Brady said he strongly supports the president’s request for TPA renewal and was glad to see in his report that he intends to use TPA to negotiate new agreements consistent with Congressional objectives.

“I’m pleased with our progress to modernize NAFTA—the largest and most successful trading relationship in the world. USTR has worked tirelessly to achieve bold and ambitious standards,” Brady said. “I am hopeful we’ll be able to vote on—and pass—a new NAFTA by year end.

“That said, the road ahead isn’t easy. Congress wants robust protections for intellectual property, increased market access for our dairy farmers and an end to Canada and Mexico’s harshly restrictive Customs barriers such as unreasonably low de minimis levels. We need workable solutions on rules of origin and procurement that recognize how Americans benefit from global supply chains—otherwise we lose to China.

“America must also lead on China. China’s chronic oversupply of steel and aluminum has put many Americans out of work and companies out of business. Its blatant theft of our companies’ technology and intellectual property can’t be tolerated. I believe strong enforcement is needed.”

Brady added, “It’s not about backing down—it’s about hitting the target, which is China and its bad practices, not our allies and other U.S. sectors.”

Ranking Member Richard Neal, D-MA, told Lighthizer that Trump has “tapped into raw feelings in some important communities about our economy and our trade policies. We have seen in the past months that this Administration and you personally, Ambassador Lighthizer, have not been shy about challenging the status quo.

“For many of us, we have taken notice of the promises that the Administration has made to improve U.S. trade policy and to make it work for all Americans. Many of us have also been skeptical of those promises, because they are big promises and we have heard them before.

“We should all be on the same team in taking on those challenges. In fact, if we want to be really effective, it seems to make sense that we should build that team beyond Democrats and Republicans to other countries and economies.”

In reaction to the hearing, Americans for Farmers & Families released a statement from spokesman Joshua Baca, saying his group is encouraged that members of Congress “have raised the importance of NAFTA to the American economy and the need to renegotiate a modernized deal that protects and strengthens our food and agricultural industries. We have confidence that Trade Representative Lightizer and other members will continue to be allies of 43 million Americans that rely on NAFTA related jobs.”

“Farmers are counting on President Trump and Congress to have their back and deliver on a better NAFTA deal, and we believe it is absolutely critical the administration listen to the agricultural community and not reverse course on any progress that has been made to help our farmers.”

Senior Field Editor Larry Dreiling contributed to this report.