Taxes, Tariffs & Trade
Mexico’s Senate approved the United States – Mexico – Canada Agreement (USMCA) June 19, the first of three countries to do so. Jeśus Seade, Mexico’s undersecretary for foreign affairs, announced the news on Twitter, posting “Mexico goes first with clear signal that our economy is open. We’re confident our partners will soon do the same.”
NAFEM provided testimony and submitted comments to the U.S. Trade Representative (USTR) June 24 about the potential impact on the industry of proposed tariffs of up to 25 percent on an additional approximately $300 billion in Chinese imports. Once the USTR finalizes this list – List 4 – tariffs of 10- to 25-percent are expected to impact nearly all Chinese imports.
On May 30, President Trump announced via Twitter and a White House statement that he is using emergency powers under the International Emergency Economic Powers Act (IEEPA) to place escalating tariffs on all goods imported into the U.S. from Mexico until “the illegal migration crisis is alleviated.”
n May 10, in response to unsuccessful trade negotiations with China, the U.S. Trade Representative (USTR) increased Section 301 import duties on $200 billion of China imports on List 3 from 10 percent to 25 percent. Three days later, the USTR began the process of imposing tariffs of up to 25 percent on an additional approximately $300 billion in Chinese imports on a new List 4. Overall, tariffs of 10- to 25-percent will potentially impact nearly all Chinese imports.
The United States Trade Representative (USTR) prepares an annual report on trading partners’ protection of intellectual property rights.
Citing an inability to make major policy decisions during its national election period, India has requested a 90-day extension of its inclusion in the Generalized System of Preferences (GSP), program that eliminates tariffs on non-import sensitive goods from developing countries that meet specific eligibility criteria.
A key deadline in securing congressional approval of the U.S. – Mexico – Canada Agreement (USMCA) was met in late April when the U.S. International Trade Commission issued its required assessment of the likely impact of the USMCA on the U.S. economy. The report indicates that the impact of the agreement on the U.S. economy is “likely to be moderate,” with a U.S. real GDP impact of 0.35 percent, an employment impact of 0.12 percent and an average increase of 0.27 percent in wages of U.S. workers. The USMCA also is expected to increase U.S. trade with Canada and Mexico by approximately 5 percent.
On May 17, President Trump announced that tariffs on steel and aluminum imports from Canada and Mexico will be removed within two days. In response, Canada and Mexico agreed to remove the retaliatory tariffs they had imposed on U.S. imports.
On May 13, the U.S. Trade Representative (USTR) released List 4 of approximately $300 billion in Chinese imports on which it proposes to impose tariffs of up to 25 percent. To request exclusions from this list, your input is urgently needed. It is expected that tariffs on these items will become effective soon after the comment period.