Groups that represent importers, carriers and ports are asking the Office of the U.S. Trade Representative to rethink its remedies for Chinese dominance in shipbuilding, arguing that imposing fees on most ships bringing imports to U.S. ports will drive up prices, increase port congestion and devastate the business of smaller ports.
The reciprocal tariffs that the U.S. intends to levy on imports -- which could be announced as soon as April 2 -- may not be a one-for-one match of the tariff rate of another country for that product. Rather, they could take into account wage suppression, exchange rate management, "mercantilist policies," non-tariff barriers, value-added tax and extraterritorial taxes.
Textile industry representatives questioned the logic of the Section 301 investigation on Nicaragua's human rights and labor rights violations, arguing that while they deplore the despotism of Nicaragua's leaders, none of the actions burden or restrict U.S. commerce. Rather, if the government were to decide that Nicaragua's violations merited the withdrawal of tariff benefits for its apparel exports, that action is what would burden U.S. commerce.
President-elect Donald Trump's Treasury Secretary nominee, hedge fund CEO Scott Bessent, has talked about tariffs as a way to "escalate to de-escalate," with the goal of "getting rid of all the tariffs."
Tariffs on imports from China of electric vehicles, EV batteries, solar cells and wafers, face masks, needles and syringes, critical minerals and steel and aluminum will go up Sept. 27, with more Section 301 tariff hikes planned for Jan. 1, 2025, and Jan. 1, 2026.
Dan Ujczo, senior counsel in Thompson Hine's trade practice, said he expects a second Biden or Trump administration to say it won't authorize USMCA to continue for another 16 years in 2026, when the trade pact is up for review.
Tariff carve-outs for Mexican steel and aluminum in the Section 232 action will be curtailed, so that only steel that is melted and poured in North America can qualify, and so that aluminum that was smelted or cast in China, Russia, Belarus but worked again in Mexico will be taxed at higher rates.
Changes to the USMCA rules of origin (ROOs) have "had a positive economic impact on the U.S. and North American auto industry, although with some challenges in implementation and new challenges emerging," according to the Office of the U.S. Trade Representative. The USTR report to Congress, mandated by Congress when NAFTA was rewritten, noted that carmakers "are still adjusting to the full scope of USMCA’s autos rules," with 13 entities given extended time to meet the stricter rules, at least for some models.
Trade groups, companies and a union that represent the aluminum and steel sectors told the Office of the U.S. Trade Representative that they need more protection from import competition, by expansion of the scope of Section 232 tariffs, and by re-negotiation of the rules of origin in both trade agreements and the Section 232 exclusion for Canada and Mexico.
In the first third of its first public hearing on promoting supply chain resilience, the Office of the U.S. Trade Representative and interagency officials heard from groups disputing the premise of the project -- that liberalizing trade was harmful to U.S. workers and manufacturing -- and from those who say the worker-centered trade approach of the Biden administration is not going far enough to restore American manufacturing.