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U.S. business groups ask trade agency to keep trucking rules in NAFTA

[U.S. business groups support Mexican economy, trucking]

Reuters  /  November 14, 2017

WASHINGTON • More than 100 U.S.-based retailers, agriculture groups and transportation councils urged the government’s trade agency on Tuesday to preserve trucking provisions in any new version of the North American Free Trade Agreement.

The Office of the U.S. Trade Representative (USTR) has proposed eliminating the provision that allows Mexican trucks to move more easily into the United States, and vice versa, and instead reverting to rules established by Congress, which would likely be more restrictive on Mexican trucks.

“We depend on the trucking industry, both American and Mexican, to safely and efficiently haul our products in both countries,” the groups said in a letter to U.S. Trade Representative Robert Lighthizer.

The USTR did not respond to a request for comment.

President Donald Trump has criticized NAFTA for draining U.S. manufacturing jobs to Mexico, calling it “the worst trade deal ever made” and he has threatened to cancel the 1994 pact signed by the United States, Mexico and Canada even as the countries negotiate to rework the deal.

It took almost a decade after NAFTA’s passage to fully implement the truck provision, as the Americans argued Mexican trucks posed a safety risk. The U.S. government eventually backed down and allowed trucks to cross the border.

The letter — signed by the American Farm Bureau, the Retail Industry Leaders Association, North American Shippers Association, the Toy Association and others — said that Mexican trucks do not actually compete with American trucks.

“Currently, it is a small, but important way of making sure our industries and North America remain competitive in the world market,” the letter said.

The Teamsters union, which represents many U.S. truck drivers, said it supports the USTR decision to reconsider the trucking provision.

Mike Dolan, the union’s top legislative representative, said the other groups misunderstood the USTR proposal, “which is simply to let the Congress legislate in this area, to keep our interstates safe and to safeguard the competitiveness of the American trucking industry.”

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Barra, Marchionne, Hinrichs meet with Pence amid discord over NAFTA

Bloomberg  /  November 27, 2017

WASHINGTON -- Top executives from the Detroit 3 automakers met with Vice President Mike Pence on Monday amid tension over the Trump administration’s efforts to revamp the North American Free Trade Agreement.

Fiat Chrysler Automobiles CEO Sergio Marchionne, General Motors CEO Mary Barra and Joe Hinrichs, Ford Motor Co.’s president of global operations, discussed "trade, commerce and manufacturing policy and how it impacts their business." The meeting also included National Economic Council Director Gary Cohn and U.S. Trade Representative Robert Lighthizer, the vice president's office said. 

Automakers have plenty of issues to raise.

President Donald Trump has pushed for companies to construct more auto assembly plants in the U.S., while also pushing for major changes to NAFTA. Trump’s negotiators want to increase the share of U.S. parts required for vehicles assembled in North America to receive duty-free treatment under NAFTA, a change that the auto industry has warned could undercut Trump’s America First goals.

"We view the modernization of NAFTA as an important opportunity to update the 23-year-old agreement and set the stage for an expansion of U.S. auto exports," Matt Blunt, the president of the American Automotive Policy Council, said after the meeting. 

Blunt said that the automakers appreciated "the opportunity to directly address the industry's concerns with the administration's rule of origin proposal."

Lighthizer is overseeing the renegotiation of NAFTA on behalf of the Trump administration. The latest round of negotiations ended last week with little progress.

Mexico and Canada rejected the U.S. proposal to raise the minimum threshold for autos to 85 percent North American content from 62.5 percent as well as to require half of vehicle content to be from the United States.

Meanwhile, the administration is conducting a review of environmental regulations enacted during the Obama administration that aim to boost the fuel efficiency of the average new car to more than 50 mpg by 2025. Carmakers say the rules are too aggressive and asked the Trump administration to reopen a review of the regulations.

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US poised to let emerging markets trade pact expire

The Financial Times  /  December 24, 2017

Pressure mounts to let Generalized System of Preferences, which grants tariff-free access to US, fail

A 1970s US trade deal that unilaterally grants products worth billions of dollars from India and other developing countries tariff-free access [why?] to the American market is set to expire on December 31, as pressure mounts from Donald Trump supporters to let it die altogether. Congress last week failed to agree on renewing the Generalized System of Preferences, despite Republicans and Democrats saying they support it and will try to bring it back to life. But critics of the programme created to help developing nations grow their export industries argue that countries such as India have for too long abused the programme by ignoring its rules, and that past administrations have been too lax in enforcing them.

“There’s nothing developing about India or China any more — 600m people are in the middle class in India and that’s probably three or four times the size of our middle class,” said Dan DiMicco, former chief executive of steelmaker Nucor and a trade adviser to Mr Trump. “Just because there are pockets of real poverty — and there’s no doubt about it — that’s the job of their government to take care of, not our government.”

More than 3,500 products from 120 developing countries and territories are covered by the trade deal, according to the non-partisan Congressional Research Service. In 2016 products worth $19bn were imported into the US tariff-free under the GSP, with business groups saying importers saved more than $700m in duties.

But economic nationalist supporters of the US president such as Mr DiMicco argue that countries such as India have failed for decades to live up to their end of the bargain and grant US companies reciprocal access. “It’s a one-way street. It’s not supposed to be a one-way street,” said Mr DiMicco.

“India doesn’t qualify on any count,” Curtis Ellis, founder of the American Jobs Alliance which advocates hardline economic nationalist trade policies, wrote in an article published by Breitbart, the conservative outlet controlled by Steve Bannon, the former White House adviser. “It routinely rips off US intellectual property and blocks US imports through a combination of high tariffs, taxes and corrupt bureaucracy.”

The Trump administration, whose support for the GSP has been lukewarm compared with that of previous administrations, has indicated it wants to see it reformed.

The office of US trade representative Robert Lighthizer, which administers the programme, on Friday declined to comment when asked by the Financial Times whether the administration supported GSP renewal.

Backers of the trade deal say it benefits US businesses by providing sources of low-cost parts outside dominant China, and that any impact on competing companies in the US is relatively small. The $19bn in goods imported in 2016 represented a minuscule portion of the US’s total $2.2tn in goods imports.

The GSP programme has expired before, most recently in 2013. Businesses that use it are forced to pay duties until it is renewed, which last time took almost two years. The Trump administration’s vow to rip up and rewrite decades of US trade policy has added a new layer of uncertainty, say backers of the trade deal.

 “I fear it’s dead in Congress for the foreseeable future, regrettably. It really shouldn’t be controversial, but alas, as with so much regarding trade and this administration it could turn out to be more difficult than necessary,” said Clark Packard of the R-Street Institute, a pro-trade Washington think-tank.

Republicans and Democrats in Congress say they back renewing the GSP but ran out of time to do so this year.

Kevin Brady, chairman of the House ways and means committee, last week blamed Senate Democrats for not giving the GSP the green light.

A spokesman for Ron Wyden, the top Democrat on the Senate finance committee, which oversees trade matters, dismissed that as “nonsense” and said Republicans consumed with pushing tax reform had failed to advance GSP legislation.

A spokeswoman for Senator Orrin Hatch, the Republican chairman of the finance committee, said he would seek to renew GSP “as soon as possible” when Congress reconvenes in January.

Mr Trump on Friday suspended some of Ukraine’s GSP privileges for failing to live up to its IP requirements while partially restoring Argentina’s.

“President Trump has sent a clear message that the United States will vigorously enforce eligibility criteria for preferential access to the US market,” Mr Lighthizer said. “The administration is committed to ensuring that other countries keep their end of the bargain in our trade relationships.”

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Trump administration says US mistakenly backed China WTO accession in 2001

Reuters  /  January 20, 2018

WASHINGTON (Reuters) -- The United States mistakenly supported China's membership of the World Trade Organization (WTO) in 2001 on terms that have failed to force Beijing to open its economy, the Trump administration said on Friday as it prepares to clamp down on Chinese trade.

"It seems clear that the United States erred in supporting China's entry into the WTO on terms that have proven to be ineffective in securing China's embrace of an open, market-orientated trade regime," the administration said in an annual report to Congress on China's compliance with WTO commitments.

"It is now clear that the WTO rules are not sufficient to constrain China's market-distorting behavior," the report said.

While the annual report from the U.S. Trade Representative's office has long taken China to task for unfair trade practices, the first such review under U.S. President Donald Trump takes a harsher tone against Beijing.

It comes amid worsening trade tensions between the world's two largest economies and as the administration prepares actions to curb China's alleged theft of intellectual property. A decision in the so-called "Section 301" investigation is expected in the coming weeks.

The report also points at Russia's behavior, saying Moscow had no intention of complying with its WTO obligations, a trend the administration said was "very troubling."

A White House official said despite consultations with China, it had failed to follow through on promises of moving more toward a market-orientated economy and playing by international trading rules.

"The president and his principal advisor are united in the belief that this is a problem that has gone on for too long and needs to be addressed," the official said.

"In the past, conversations have focused more on discreet opening for discreet products, and what we're saying is systematically we're not going to tolerate broad-based policy that attempts to promote state-led enterprises," the official said, speaking on condition of anonymity.

Trump told Reuters in an interview this week he was considering a big "fine" against China for forcing U.S. companies to transfer their intellectual property to China as a cost of doing business there.

While the administration is also looking at whether foreign imports of steel, aluminum, washing machines and solar panels are harming U.S businesses, China's alleged theft of intellectual property is a particular concern to Trump because it affects a large swath of American firms, the official said.

Trump did not specify what he meant by a "fine" against China, but the 1974 trade law that authorized an investigation into China's alleged theft of U.S. intellectual property allows him to impose retaliatory tariffs on Chinese goods or other trade sanctions until China changes its policies.

In Beijing, many experts believe Washington is unwilling to pay the heavy economic price needed to upset prevailing trade dynamics between the two countries.

In the report released on Friday, Trump's trade envoy, Robert Lighthizer, said the global economy was threatened by major economies who undermined the global trading system.

"The global trading system is threatened by major economies who do not intend to open their markets to trade and participate fairly," Lighthizer said. "This practice is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles of the WTO."

The Trump administration has already pledged to transform 164-member trade body and has blocked WTO judicial appointments in a move to win WTO reforms.

"What we want to do is see countries behave responsibly within the international trading system," the White House official said.

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Trump invites 'easy to win' trade war as tariff anger spreads

Bloomberg  /  February 2, 2018

WASHINGTON -- President Donald Trump invited a trade war after slapping tariffs on steel and aluminum imports, daring other countries to act on threats of retaliation.

“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump said in an early morning tweet on Friday.

Trump is facing anger from manufacturers and trade partners in China and Europe after announcing tariffs of 25 percent on imported steel and 10 percent on aluminum for “a long period of time.” The formal order is expected to be signed next week.

U.S. Sen. Ben Sasse, R-Neb., cautioned “Trade wars are never won. Trade wars are lost by both sides,” in a statement. “If the President goes through with this, it will kill American jobs -- that’s what every trade war ultimately does. So much losing.”

Trump in a follow-up tweet Monday morning warned of more trade actions ahead, casting them as reciprocal taxes, a term he has used for imposing levies on imports from countries that charge higher duties on U.S. goods than the U.S. currently charges.

“We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!” Trump said in the tweet.

The aggressive stance has stoked fears of trade retaliation and roiled global markets. The U.S. dollar weakened for a second day against a basket of currencies, while equity markets across the U.S., Asia and Europe have declined.

Trump hasn’t given the details of his proposed action on steel and aluminum tariffs, including whether any products or countries would be exempted.

The planned tariffs, justified on the basis that cut-price metals imports hurt both American producers and national security, now raise the prospect of retaliatory curbs on American exports and higher prices for domestic users. While the practical impact may yet turn out to be limited, the political environment for global trade has just taken a turn for the worse.

European equities followed Asian markets lower on Friday after losses in the U.S. the day before. 

Asian stocks had already built on losses seen in the U.S. the previous day, with shares in Hong Kong, Japan, China, Australia and South Korea weaker. Separately, the yen spiked and Japanese assets slumped after Bank of Japan Governor Haruhiko Kuroda discussed the timing of a possible exit from its stimulus policy in parliament.

The official response in China, the world’s largest steel producer, was muted. Foreign Ministry spokeswoman Hua Chunying merely said in Beijing Friday that China urges the U.S. to follow trade rules.

Industry insiders were less restrained. The U.S. measures “overturn the international trade order,” Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association, said in a statement. “Other countries, including China, will take relevant retaliatory measures.”

Li Xinchuang, the vice chairman of China Iron and Steel Association, called the move “stupid.”

U.S. allies, seeing their industries threatened, responded with bafflement and dismay. Some also panned the idea that metals imports pose a threat to national security.

“Steel and aluminum imports from Japan, which is an ally, do not affect U.S. national security at all,” Japan’s Trade Minister Hiroshige Seko told reporters in Tokyo Friday. “I would like to convey that to the U.S. when I have an opportunity.”

Toyota Motor Corp., which plans to build a new $1.6 billion factory in Alabama with Mazda Motor Corp., said the administration’s decision will “adversely impact” auto companies by raising costs and prices of cars and trucks sold in the U.S. That’s even as more than 90 percent of the steel Asia’s biggest carmaker needs in the U.S. is from the country.

Trade groups representing automakers including General Motors and Toyota, plus parts suppliers like Robert Bosch GmbH, tried to warn the Trump administration of unintended consequences before Thursday's announcement. Asian automakers’ shares declined while U.S. carmakers -- already slipping because of weak February sales -- extended their drop after Trump’s comments.

“These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” said Cody Lusk, president of the American International Automobile Dealers Association. “Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America.”

Some automakers contacted by Automotive News before Thursday downplayed the potential effect of the proposed import limits on their operations, saying they use very little imported steel and aluminum. Ford sources 95 percent of its steel and 98 percent of its aluminum from domestic mills, spokeswoman Christin Baker said. The company is a large buyer of lighter-weight aluminum, which it began using in recent years in body panels for F-series pickups and large SUVs.

Mark Reuss, global product chief at General Motors, said 90 percent of GM's steel is sourced from the United States.

“But whatever happens on those trade policies, we’ve got to be ready to defend and be disciplined around how we buy and how we develop and engineer," he said later Thursday. "That’s why taking a mixed material approach on some of these is a great hedge as well."

Canada reaction

Canada -- the biggest foreign supplier of steel and aluminum to the U.S. -- said the measures were unacceptable while the European Union vowed to “ react firmly” with World Trade Organization-compliant countermeasures in the next few days. Australian Trade Minister Steve Ciobo called the move “disappointing” and said his country is seeking an exemption.

The punitive measures would level the unfair playing field that has persisted for years, and make it easier for American companies to expand and hire workers, Trump said.

U.S. companies from beer brewer MillerCoors to candymaker Hershey Co., which use aluminum for manufacturing and packaging, said operations would be hurt by the tariffs.

“We buy as much domestic can sheet aluminum as is available, however, there simply isn’t enough supply to satisfy the demands of American beverage makers like us,” MillerCoors said in a tweet. “American workers and American consumers will suffer as a result of this misguided tariff.”

Soybean response

A U.S. move on tariffs risks provoking retaliation, particularly from Beijing. China has already launched a probe into U.S. imports of sorghum, and is studying whether to restrict shipments of U.S. soybeans -- targets that could hurt Trump’s support in some farming states. While China accounts for just a fraction of U.S. imports of the metals, it’s accused of flooding the global market and dragging down prices.

What Our Economists Say...

“China’s total exports of steel and aluminum are equal to about 0.5% of GDP, most of that from steel,” said Bloomberg’s Chief Asia Economist Tom Orlik. “Relative to fears from Trump’s campaign trail rhetoric, in which he threatened an across-the-board 45% tariff on all imports from China, these measures are extremely limited.”

Trump announced the tariffs despite lobbying of his administration by foreign governments, and while Chinese President Xi Jinping’s top economic adviser is in the country on a mission to defuse tensions.

The impact of the step hinges in part on which nations will be affected, said Alex Wolf, senior emerging markets economist at Aberdeen Standard Investments in Hong Kong, who previously worked at the U.S. State Department.

“It’s not much ado about nothing,” he said. "But until we see the final scope of the tariffs and the response from global trading partners it’s hard to say it’s the start of a tit-for-tat trade war."

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Trump threatens to tax European auto imports

Reuters  /  March 4, 2018

WASHINGTON -- U.S. President Donald Trump kept up pressure on trading partners, threatening European automakers with a tax on imports if the European Union retaliates against his plan to impose tariffs on aluminum and steel.

Trump's tweet showed he is refusing to yield to U.S. business interests and foreign trading partners alarmed at the prospect of a trade war that rattled financial markets this week.

"If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S.," Trump wrote on Twitter on Saturday. "They make it impossible for our cars (and more) to sell there. Big trade imbalance!"

The United States imposes a 2.5-percent tariff on cars assembled in Europe and a 25-percent tariff on European-built vans and pickup trucks. Europe imposes a 10-percent tariff on U.S.-built cars [China imposes a 25% import tax on most cars, and a 35% import tax on luxury cars as well as commercial trucks].

Trump criticized Europe in remarks at a fundraiser, according to video posted online Saturday, and suggested they would not increase tariffs.

"The European Union: brutal. They've been brutal to us," Trump said at a Florida fundraiser. "They've banded together in order to beat the United States in trade."

Trump did not respond to questions about tariffs or other topics upon returning to the White House Saturday.

In a speech Friday night at Harvard University, European Commissioner for Competition Margrethe Vestager said the EU will respond to the tariffs "to defend European industry, and the world trading system," according to a copy of her remarks. She called the Trump action "one-sided protectionist measures, which hurt, not just jobs, but the whole system of rules that makes our global economy work."

German automakers Volkswagen AG, Daimler AG and BMW AG build vehicles at plants in the United States. BMW employs more than 9,000 workers in South Carolina and is one of the state's largest employers.

The United States accounts for about 15 percent of worldwide Mercedes-Benz and BMW brand sales, while it accounts for 5 percent of VW brand sales and 12 percent of Audi sales.

The United States had a $22.3 billion automotive vehicle and parts trade deficit with Germany in 2017 and a $7 billion deficit with the United Kingdom, according to U.S. government data.

Last year, Germany's automotive trade association said "the United States would be shooting itself in the foot by imposing tariffs or other trade barriers."

Trump's threat comes amid mounting transatlantic tension on trade.

On Thursday, Trump said the United States would apply duties of 25 percent on imported steel and 10 percent on aluminum to protect domestic producers.

Major automakers say the move will hike the cost of cars and trucks.

The next day, European Commission President Jean-Claude Juncker told German television that "We will put tariffs on Harley-Davidson (motorcycles), on bourbon and on blue jeans -- Levis."

Canada also has said it will retaliate for any tariffs on steel and aluminum.

Trump had tweeted on Friday that trade wars are good and "easy to win," roiling U.S. financial markets.

In January 2017, Trump warned German car companies he would impose a border tax of 35 percent on vehicles imported to the U.S. market.

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The man does not think of the repercussions from this action. I see a large loss of jobs here and higher prices for consumers. 

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At any given point in time, there are thousands of secret agreements between countries, orchestrated by "big business".......the world's wealthy aristocracy who know no boundaries. It's literally impossible for the masses to connect the dots and make any educated guess as to what is really going on.

  • Thanks 1

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45 minutes ago, grayhair said:

In my under-educated and decidedly-proletarian point of view (to which I am so richly entitled,) anything that angers so many foreign dignitaries and elite dilettantes is probably a pretty good thing.

Hell, if it works to our disadvantage Trump can unwind it as quickly as it was put into place.  And start a trade war? Seriously?  Trade war has been waged against us for years and finally now we fight back just a little.

And the lobbyists should be delighted since now they are really needed in order to fight Trump's doings.  They protest too much I think.  We shall see...


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WE can make Steel and Aluminum but under Obama's policies  American steel mill started laying off workers in 2015 and continued until early 2017, we have the mills but dumped the workers from Obama's trade deals, refusal to add import tariffs and his EPA "green" regulations.

Because making one to of Aluminum generates 2 tons of waste , much of which is processed into other items but one by product is called Red Mud which is caustic,. The U.S. EPA in 2014 did not approve any secondary use of the waste. The radioactivity content is only one of several concerns that pose a risk to the environment, as red muds also have a high salinity and pH. In some red mud samples, the EPA has identified elevated arsenic and chromium concentrations; in some cases, arsenic levels were as high as 16,000 parts per billion , and chromium up to 374,000 parts per billion. In the United States, wastes are required by the EPA to be disposed in large impoundments that are lined with clay and /or synthetic liners at a cost to manufacturers of approximately 18,000 dollar per ton for transport, containment, site monitoring and testing of the soil and air around the sites.  The Bauxite mining is even more EPA restricted since 2010.

You need to free up and restore the ability to produce and compete before you start a needed trade war.

Edited by 41chevy

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U.S. drops auto-content proposal in NAFTA talks

Reuters  /  March 20, 2018

The U.S. government has dropped a demand that all vehicles made in Canada and Mexico for export to the United States contain at least 50 percent U.S. content, The Globe and Mail reported on Tuesday, citing sources.

President Donald Trump's administration dropped the demand during the North American Free Trade Agreement negotiations in Washington last week, which included talks between Canada's Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, the Canadian newspaper reported.

Freeland's chief spokesman declined to comment on the report and said Canada and United States continued to work well together.

Canada's Prime Minister Justin Trudeau said earlier this week that Trump appeared to be "enthusiastic" about coming to an agreement on NAFTA.

The quotas for U.S. content in autos have been a major bone of contention for Mexico, Canada and many companies.

The Trump administration had been seeking to raise the amount of NAFTA content in light vehicles to 85 percent from 62.5 percent and secure 50 percent of the total for the United States.

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The Trump administration flip-flips (wusses out).......again. And this really mattered.

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Trump sets China tariff plan, edges away from global trade war

Reuters  /  March 21, 2018

WASHINGTON -- U.S. President Donald Trump signed a presidential memorandum on Thursday that “could” [not will] impose tariffs on up to $60 billion of imports from China, although the move was far removed from threats that could have ignited a global trade war.

Under the terms of the memorandum, Trump will target the Chinese imports only after a consultation period, a measure that will give industry lobbyists and legislators a chance to water down a proposed target list which runs to 1,300 products.

China will also have space to respond to Trump’s actions, reducing the risk of immediate dramatic retaliation from Beijing, and Trump struck an emollient tone as he started speaking, saying “I view them as a friend.”

“We have spoken to China and we are in the middle of negotiations,” Trump said, adding that loss of American jobs from unfair trade was one of the main reasons he had been elected in 2016.

(We’ve been negotiating with China for decades……it’s a waste of time)

The United States runs a $375 billion goods trade deficit with China.

Washington will also pursue alleged breaches of intellectual property law by China through the World Trade Organization, a body that has repeatedly drawn the ire of the administration but which could provide a resolution that avoids a trade war.

Following Trump’s announcement on Thursday, the U.S. Trade Representative’s office will present a list of products that could be targeted, primarily from the high-tech sector. There will then be a 60-day consultation period before definitive action will be put into force.

Chinese investments 

White House officials told a briefing ahead of the trade announcement that the administration was eyeing tariffs on $50 billion in Chinese goods. They said the figure was based on a calculation of the impact on the profits of U.S. companies that had been forced to hand over their intellectual property as the price of doing business in China.

There was no explanation of the difference between the numbers provided by White House officials in the briefing and Trump’s $60 billion.

“Many of these areas are those where China has sought to acquire advantage through the unfair acquisition and forced technology transfer from U.S. companies ... establishing its own competitive advantage in an unfair manner,” Everett Eissenstat, deputy director of the National Economic Council, told reporters.

In addition, Trump will also direct the U.S. Treasury to propose measures that “could” [not will” restrict Chinese investments in the United States, Eissenstat said.

The tariffs and investment restrictions will be imposed under the U.S. Trade Representative’s “Section 301” investigation into alleged misappropriation of U.S. intellectual property by China.

Eissenstat said the investigation clearly demonstrates unfair practices by China, which forces U.S. investors to turn over key technologies to Chinese firms.

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Trump threatens endless NAFTA talks amid softening U.S. stance on car content

Bloomberg  /  April 12, 2018

WASHINGTON -- Donald Trump says he’s willing to “renegotiate forever” on NAFTA, a threat that comes as his trade office again softens its marquee demand for changes to the auto sector.

The president, speaking Thursday at the White House, said renegotiation of the North American Free Trade Agreement with Canada and Mexico is progressing well but there isn’t a timeline for reaching a deal -- in part because the uncertainty of talks is already discouraging investment outside the U.S.

“As long as we have this negotiation going, nobody’s going to build billion-dollar plants in Mexico,” Trump said.

Despite his bluster, the U.S. has softened its negotiating position on the crucial issue of automotive content. American negotiators are now proposing that as much as 75 percent of car components be sourced from the three countries to quality for tariff exemptions under NAFTA, down from its initial proposal of as much as 85 percent, according to three people familiar with the matter, who spoke on condition of anonymity because the talks are private. The development was first reported by Inside U.S. Trade.

It’s the latest concession by the Americans on the auto sector. The Trump administration is also said to have proposed tiers that allow more foreign content, while also dropping a demand for 50 percent U.S.-specific content. The three countries are running out of time to reach a deal that can be passed by the current U.S. Congress, while Mexican elections are also quickly approaching. Trump told U.S. lawmakers a NAFTA deal is close, according to Senator John Cornyn.

Absent in Peru

The developments also come as U.S. Trade Representative Robert Lighthizer, Trump’s point-man on NAFTA talks, scrapped a trip to the Summit of the Americas where he’d been due to meet with his Canadian and Mexican counterparts. Trump is also skipping the summit.

U.S. demands for reforms to NAFTA’s auto sector rules have now changed substantially since being presented at the negotiating table last fall. Currently, 62.5 percent of a typical car and its major parts, and at least 60 percent of all parts, must be sourced from NAFTA countries to be traded tariff-free under the pact.

Trump’s team at first proposed raising the content requirement to 85 percent, with a 50 percent U.S.-specific requirement. Its latest proposal envisions three tiers of parts, with the highest tier requiring 75 percent content, others requiring a lower level and no U.S.-specific requirement. Earlier this month it proposed five tiers. 

The U.S. president regularly singles out the auto sector as a victim of NAFTA’s status quo, and did so again Thursday by saying Mexico had “taken our auto industry by the throat.” Trump spoke while meeting with lawmakers from agricultural states, with major farm groups generally supportive of NAFTA.

“We’re going to make it great and we’re pretty close to a deal. It could be three or four weeks, it could be two months it could be five months, I don’t care,” he said. “So the narrative of I’m pushing for a deal -- I never push for a deal. I don’t care. In fact if everybody in this room closed their ears I’d say that I’d rather terminate NAFTA and do a brand new deal but I’m not going to do that because I’d rather everybody to be happy in this room, okay? So we’ll see how it goes."

The U.S. ambassador to Canada, Kelly Craft, said Thursday in Calgary she’s optimistic NAFTA can be fixed and the three nations will be able to modernize the decades-old deal. “We all want a good outcome, and if our past is any indication, I’m confident that we’re going to have a very bright future.”

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Trump weighs rejoining TPP as he tones down China trade threat

Bloomberg  /  April 12, 2018

WASHINGTON -- President Donald Trump told lawmakers he is considering rejoining the Trans-Pacific Partnership, the free-trade deal he withdrew from shortly after taking office, as he expressed confidence the U.S. is headed toward resolving trade conflicts without economic disruption.

A week after escalating tensions with his threat to impose tariffs on an additional $100 billion in Chinese products, Trump said Thursday the two countries ultimately may end up levying no new tariffs on each other.

“Now we’re really negotiating and I think they’re going to treat us really fairly,” Trump said during a White House meeting with Republican governors and lawmakers from farm states. “I think they want to.”

The remarks were another conciliatory signal from the administration following tit-for-tat tariffs proposals from the world’s largest two economies that rattled markets. Trump also indicated that talks are progressing toward successful renegotiation of the North American Free Trade Agreement.

After reporters left the room, Trump told the lawmakers he deputized economic adviser Larry Kudlow and U.S. Trade Representative Robert Lighthizer to explore re-entering the Asia-Pacific trade accord. Senator Ben Sasse told reporters of Trump’s remarks on the TPP, and two White House officials who spoke on condition of anonymity confirmed the statement.

“He multiple times reaffirmed the point that TPP might be easier to join now,” said Sasse, a Nebraska Republican who participated in the meeting with Trump.

The news drew a rebuke from opponents of the multilateral trade pact. AFL-CIO President Richard Trumka said on Twitter that TPP “was killed because it failed America’s workers and it should remain dead.”

“There is no conceivable way to revive it without totally betraying working people,” he said.

Trump withdrew the U.S. from the accord during his first week in office. The pact, which was conceived as a counterweight to China’s economic dominance in the region, had been negotiated under the Obama administration but never approved by Congress.

The 11 remaining nations, representing 13 percent of global output including Japan and Canada, finalized a revised version of the trade pact last month, renaming it the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP.

Trump suggested in February he was open to rejoining the trade bloc during a news conference with Malcolm Turnbull, the prime minister of Australia, which is in the CPTPP.

One of the White House officials said that while the president prefers negotiating bilateral trade deals, a multilateral deal with the TPP countries would counter Chinese competition and would be faster than negotiating one-on-one with each of the 11 other nations.

Open China

In his remarks on Thursday, Trump cited a speech by Chinese President Xi Jinping that the U.S. president interprets as a signal China is about to open its markets to more U.S. goods. “He’s going to get rid of a lot of taxes and tariffs,” Trump said of Xi.

Xi pledged a “new phase of opening up” Tuesday in a keynote address to the Boao Forum for Asia. While the speech offered little new policy and made no mention of Trump, Xi affirmed or expanded on proposals to increase imports, lower foreign-ownership limits on manufacturing and expand protection to intellectual property -- all issues central to the U.S. president’s trade complaints.

Trump clearly regarded the remarks as conciliatory, and said again Thursday that it was a “good speech.”

“Very thankful for President Xi of China’s kind words on tariffs and automobile barriers,” Trump said on Twitter on Tuesday. “Also, his enlightenment on intellectual property and technology transfers. We will make great progress together!”

Talks stopped

Talks between the world’s biggest economies broke down last week after the Trump administration demanded steps to curtail China’s support for high-technology industries, a person familiar with the situation said. The U.S. has accused China of unfairly subsidizing targeted sectors and forcing foreign companies to transfer technology in areas like robotics, aerospace and artificial intelligence.

The U.S. hasn’t announced a date it intends to impose tariffs on an initial list of $50 billion in Chinese goods. The administration is also expected to release a separate list for additional proposed tariffs covering $100 billion in imports from China.

On talks with Canada and Mexico to revamp NAFTA, Trump said negotiations are “coming along great,” though he added there’s no timeline to reach a deal.

An agreement could be completed within a few weeks or five months, he said, adding “I don’t care.” The U.S. will come up with a good deal and “agriculture will be taken care of,” Trump said.

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At NAFTA table, U.S. lowers key auto content demand

Reuters  /  April 13, 2018

MEXICO CITY -- U.S. trade negotiators have significantly softened their demands to increase regional automotive content under a reworked NAFTA trade pact in an effort to move more quickly towards a deal in the next few weeks, auto industry executives said on Friday.

A deal on automotive content rules would remove one of the biggest sticking points in talks to update the 24-year-old North American Free Trade Agreement.

The Trump administration had initially demanded that North American-built vehicles contain 85 percent content made in NAFTA countries by value, up from the current 62.5 percent, along with half the value coming from the United States -- levels that Canada, Mexico and automotive groups had said was unworkable.

But the U.S. target has been cut by 10 percentage points, and the U.S. specific percentage demand dropped, industry officials said.

"The U.S. put on the table 75 percent instead of 85 percent for the regional content value of the vehicle and its core components," said Eduardo Solis, head of Mexico's AMIA automotive industry association.

"All of this is being carefully analyzed and specific questions are being asked during this round of the U.S. negotiators (in charge of) rules of origin," Solis said in a statement.

The 75 percent regional content is for major components such as engines, drivetrains, axles, suspensions and body panels. Aluminum and steel would go into a bucket of other parts and materials requiring 70 percent regional content, while a third bucket of lesser parts would require 65 percent regional content.

"From the parts manufacturer perspective this is a significant step in the right direction, compared to where we were," said Ann Wilson, head of government affairs at the Motor and Equipment Manufacturers Association.

"But it does appear that this will creates significantly more paperwork for smaller suppliers to have to certify their parts," Wilson added. "I think there's a lot of room yet to improve this."

Negotiators from the three nations were due to discuss the new U.S. proposals at talks this week in Washington. Talks on rules of origin were due to take place on both Friday and Saturday, according to a schedule seen by Reuters.

A senior union leader who spoke to the Canadian negotiating team on Friday said the talks were progressing slowly.

"We really still are far, far, far away on the issues that are keeping us apart and frankly there has been very little discussion on them this week," Unifor President Jerry Dias told Canada's CTV network, citing the U.S. stance on dispute resolution and labor standards.

U.S. Trade Representative Robert Lighthizer has been pushing for a deal-in-principle on NAFTA in the next few weeks as the Mexico's presidential election campaign officially gets underway. President Donald Trump said on Thursday that he thought negotiators were "pretty close" to a deal, but that he was in no hurry for a conclusion.

"Unless the United States makes some meaningful major changes in the short term, for anybody to think this is getting done by the end of April is pushing their luck," said Dias.

U.S. negotiators had also recently floated the idea that 40 percent of automotive production must occur in areas paying wages of between $16 to $19 per hour. Some auto industry officials briefed on the U.S. plan said the latest version would require an average wage rate of $16 an hour for a finished vehicle.

Setting wage minimum wage thresholds for the auto industry could benefit the United States and Canada, whose trade unions say that lower Mexican pay has prompted manufacturing capacity to move south of the Rio Grande.

Talks to rework NAFTA, which underpins $1.2 trillion in annual trade, began last year after President Donald Trump took office promising to abandon the 1994 agreement if it could not be reworked to better serve American interests.

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The Trump show caves again......or were they ever actually serious about putting a stop to that "giant sucking sound"?



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Europe Retaliates Against Trump Tariffs

Jack Ewing, The New York Times  /  June 21, 2018

GOTEBORG, Sweden — The European Union fought back on Friday against the Trump administration’s tariffs, slapping penalties on an array of American products that target the president’s political base, like bourbon, motorcycles and orange juice.

The European counterattack on $3.2 billion of goods, a response to the administration’s measures on steel and aluminum imports, adds another front to a trade war that has engulfed allies and adversaries around the world. China and Mexico have already retaliated with their own tariffs, and Canada, Japan and Turkey are readying similar offensives.

The risk of escalation is high since Mr. Trump has promised even more tariffs. Taking particular aim at German car manufacturers, the president has started an investigation into automobile imports to determine whether they pose a national security concern, the same justification used for his metal tariffs.

“You look at the European Union,” the president told a crowd in Duluth, Minn., on Wednesday. “They put up barriers so that we can’t sell our farm products in. And yet they sell Mercedes and BMW, and the cars come in by the millions. And we hardly tax them at all.” He added in a tweet on Friday that he would place a 20 percent tariff on European cars, if the barriers “are not soon broken down.”

The United States is fighting from a position of strength, with the American economy on track for one of its strongest years in a decade. Europe doesn’t have the same defenses. Growth in the region is slowing, and that weakness has been compounded by political turmoil in Italy and Germany, as well as Britain ’s decision to leave the European Union.

But in a trade war no sides are left unscathed. Although Mr. Trump has sought to exert pressure on other countries, the global nature of supply chains means the tit-for-tat tariffs are ricocheting in unexpected ways and may ultimately cost jobs in the United States. Sales of Mercedes S.U.V.s, made in Alabama by the German automaker Daimler, could be hit by the American trade dispute with China. The Swedish manufacturer Volvo faces rising prices on the imported steel it uses at its Mack Truck factory outside Allentown, Pa.

The path to reconciliation is shrouded in uncertainty, creating the potential for broader strain in the global economy. While the Trump administration has sought to use economic force to exert concessions, the successive drumbeat of attacks has left little time to negotiate. Formal trade talks between Brussels and Washington have broken down, although informal channels have remained open.

The European Commission, the European Union’s administrative arm, applied its sanctions more than a week earlier than expected, in what analysts said was a show of strength.

“It’s a signal that the E.U. is striking back and taking this seriously,” said Holger Schmieding, chief economist at Berenberg Bank in London .

As Mr. Trump pursues a nationalistic agenda, leaders in Europe and elsewhere are eager to demonstrate that they will continue to dismantle barriers to commerce, with or without the United States. Cecilia Malmstrom, the European commissioner for trade, was in New Zealand on Thursday negotiating a free-trade pact with the government there, the latest in a series of treaties signed or in the works, including ones with Japan, Canada and Australia.

“We did everything we could to avoid this situation, but now we have no choice but to respond,” Ms. Malmstrom said in a speech in Wellington, New Zealand. “The E.U. has a responsibility to stand up for open global trade.”

The new slate of European tariffs focuses on products that tend to be manufactured in Republican strongholds: whiskey and playing cards from Kentucky, recreational boats from Florida and rice from Arkansas.

But trade wars don’t play out that neatly. It’s not easy to strike precise targets without collateral damage.

Take the Mack Truck factory in Pennsylvania. Mack may be a quintessential American brand, but it’s owned by Volvo Group, which is based in this seaport on Sweden’s southwestern coast.

The Mack plant uses specially treated steel imported from Europe. American substitutes are not readily available, if at all [Impossible, or shocking, to believe]. That means the Allentown factory has to pay 25 percent more for some kinds of steel, putting it at a disadvantage with its competitors who manufacture in Mexico and can get the same high-quality steel without paying the Trump tariffs. At least for the moment, vehicles made in Mexico are not subject to tariffs when they are imported into the United States.

Billy Joel sang about Allentown as the city where “they’re closing all the factories down.” The Mack Truck factory, in the suburb of Lower Macungie Township , has been an exception. It is “packed with orders,” said Martin Lundstedt, the chief executive of Volvo Group, a manufacturer of trucks, buses and heavy equipment that is separate from the company that makes Volvo cars.

But he worried that demand could slip if costs in the United States rose and the trade dispute triggered an economic slowdown. “Yes, it will affect us, and we need to live with it,” Mr. Lundstedt said. “It could be that if you have production in the U.S. you are punished.”

It’s a similar concern for ABB, a supplier of heavy electrical equipment based in Zurich. ABB makes electrical transformers in South Boston, Va., and Crystal Springs, Miss.

“We use a very specific kind of steel,” said Ulrich Spiesshofer, the chief executive of ABB. “The capacity and the number of players for that kind of steel is very limited. The steel that we import from other places is being punished.”

Eventually the competitiveness of the United States plants could suffer, Mr. Spiesshofer said.

Daimler, the maker of Mercedes cars, has already been caught in the crossfire between the United States and China. The company issued a profit warning on Wednesday, in part blaming tit-for-tat tariffs for a slump in the sales of S.U.V.s, which are built in Tuscaloosa, Ala.

In retaliation for tariffs imposed by the United States on Chinese goods, China has threatened to increase penalties on American cars to 40 percent from 15 percent. That would hurt sales in the huge Chinese market by raising sticker prices for Mercedeses from Alabama as well as BMWs made in Spartanburg, S.C.

“Fewer than expected S.U.V. sales and higher than expected costs — not completely passed on to the customers — must be assumed because of increased import tariffs for U.S. vehicles into the Chinese market,” Daimler said in a statement late Wednesday.

Last year, BMW exported about 80,000 vehicles to China, including its X5 S.U.V., from the Spartanburg plant, its largest factory in the world. BMW said in a statement on Thursday that it did not need to revise its outlook for profit because of trade tensions, but the company added that it “continues to observe international developments closely.”

Shares of major German and American carmakers fell sharply Thursday on worries of a trade-related slowdown. Daimler shares closed off more than 4 percent in Frankfurt trading, and BMW shares slipped 3 percent.

If the trade conflict continues, companies could consider relocating assembly lines to other countries, leading to job losses in the United States. BMW already has factories in South Africa and China, among other countries.

Carmakers would not make such a decision lightly. Moving manufacturing is expensive and takes years to carry out. The German carmakers continue to hope that the conflict will blow over and perhaps even provide a catalyst for removing trade barriers with the United States.

Currently the United States charges a 2.5 percent levy on imported foreign cars while Europe imposes a tariff of 10 percent on cars from the United States. German automakers would be happy if tariffs fell to zero in both directions, though only as part of a broad trade pact, Eckehart Rotter, a spokesman for the German Association of the Automotive Industry, said Thursday.

Ironically, the tariffs could have a small — if somewhat short-lived — upside for Europe. Local steel and aluminum may eventually fall in price because producers in countries like Russia or Japan will divert supplies that otherwise would have gone to the United States, creating a glut in the market. That would be bad for steel producers but good for machinery makers and other companies that use a lot of steel, potentially giving them an edge over their American competitors in overseas markets.

But any benefits for Europe would be erased by a sizable disruption to global commerce. The biggest problem for companies, regardless of nationality, is that they don’t know how much more the trade conflict will escalate. The uncertainty may already be gnawing on growth.

“For the first time we’re hearing about decisions to postpone investment, postpone hiring, postpone making decisions,” Jerome H. Powell, the chairman of the Federal Reserve, said during a panel discussion with other central bankers in Sintra, Portugal, on Wednesday. “That’s a new thing.”

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July 5th, 2018..........and the game begins! I'm buying bucket cutting edges for the heavy loader fleet.


  I received an email from my supplier of these edges. Starting tomorrow, the tariff takes effect which will increase these edges up to a possible 25%. I received this information late Tuesday and didn’t have time to let anyone know. If I place this order today I believe I can beat this timetable they set. Let me know ASAP to avoid problems later.  If you have any questions let me know…
  Thank You

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We can first of all assume that the key pieces of the puzzle are out of our view.

I wish more Americans would look up from their smart phones for a moment, and care/pay-attention-to the global arena, for their daily lives are indeed overshadowed by it.

China has become the center of the global economy, and both the G8 and the multi-national companies handed that position to them. Sending production overseas weakened the very foundation of the US, and simultaneously/inherently gave away our technological know-how.

Most people could care less right now, but the real issues that we should be concerned about are the South China Sea and Taiwan. The SCS and Taiwan cards are being simultaneously played with the North Korean and trade/tariff cards. For China, the South China Sea and Taiwan are not negotiable.....period. And they now have the military capability to take and hold them. The US stands to lose massive face, and its decades-long position in the world order, when China takes over Taiwan. After the usual war of words, I assume we won't stop them, because there's certainly zero support to spill American blood defending Taiwan, nor the South China Sea. A very serious storm is brewing.

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Right after NAFTA passed the American DOT officers were kept busy with those "impeccably maintained" Mexican trucks! Lol!

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I'm stocking up on parts too, got a bunch of German made VW TDI powertrains, BMW motorcycles, a Ford Ranger with more Euro content than a lot of VWs, and the odd Yamaha and Guzzi in my personal fleet.

And that income tax cut? Before the income tax, import duties was largely how they funded the federal government... When most everything you buy has foreign content and is taxed at 20% or so, Trump's tariffs could easily take back what the tax cuts "gave" us.

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