A spokeswoman for China’s National Development and Reform Commission on June 17 gave the clearest indication yet that China may seek to impose restrictions on rare earths exports to retaliate for U.S. tariffs. In response to a question during a regularly scheduled press conference on potential export restrictions, the spokeswoman said China is “resolutely opposed” to “anyone who attempts to use China’s rare earth resources to manufacture products” that are used to “contain and suppress China’s development,” according to an unofficial translation. The spokeswoman also mentioned the possibility of export controls and traceability requirements for Chinese rare earths.
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President Donald Trump issued an executive order directing all federal departments and agencies to eliminate one-third of their current Federal Advisory Committee Act-authorized committees by Sept. 30. The order limits the total government-wide number of advisory committees to 350. Eliminated committees should include those found to deal with subject matters that have “become obsolete,” have accomplished their stated objectives, have primary functions “that have been assumed by another entity” or that the agency finds have a “cost of operation [that’s] excessive in relation” to their “benefits to the Federal Government.” Agencies can count committees already eliminated since Trump entered office in January 2017 toward their quota. Agency heads can seek a waiver of the requirement if OMB concludes “it is necessary for the delivery of essential services, for effective program delivery, or because it is otherwise warranted by the public interest.” All agency heads will need to submit recommendations by Aug. 1 to OMB for eliminating committees. OMB will recommend which committees to eliminate by Sept. 1.
A bipartisan group of 23 lawmakers from Arizona, California and Texas objected to the possible inclusion of "seasonality" provisions within the implementing legislation for the U.S.-Mexico-Canada Agreement in a June 14 letter to U.S. Trade Representative Robert Lighthizer. "Seasonality, whereby certain agricultural products could be subjected to numerous seasonal and regional dumping duties at various times throughout the year, runs counter to the spirit of a free trade agreement intended to tear down both tariffs and non-tariff barriers to trade," the lawmakers said. "Using USMCA as a vehicle for pursuing seasonal agriculture trade remedies risks pitting different regions of the country against each other."
India’s decision to impose retaliatory tariffs on U.S. goods was expected by most of the U.S. business community, which has been preparing for the announcement for months, said Amy Hariani, vice president of the U.S.-India Business Council at the U.S. Chamber of Commerce.
Broadcom expects its semiconductor business to take a $2 billion revenue hit from the U.S.-China trade war, including the Trump administration's "Huawei export ban,” CEO Hock Tan said on a fiscal Q2 call June 13. The trade frictions are “creating economic and political uncertainty and reducing visibility for our global OEM customers,” he said. “Demand volatility has increased and our customers are actively reducing inventory levels to manage risks.” The $17.5 billion in semiconductor revenue Broadcom now expects in the fiscal year ending in February will translate into a year-over-year decline in the high single-digits, Tan said. Huawei generated about $900 million of revenue for Broadcom last year, but the market softness that prompted the company to shave $2 billion off its semiconductor revenue forecast “obviously extends beyond just one particular customer,” Tan said. “We're talking about uncertainty in our marketplace,” and that’s causing “compression” in the supply chain that’s reducing orders, he said. “It's broad-based.” With the revised forecast, “we tried to capture everything” in the business “environment,” including the impact of the proposed List 4 tariffs on Chinese goods, Tan said. The environment “is very, very nervous, and that's why we see a very, very sharp and rapid contraction of the supply chain and orders out there from our customers,” he said.
U.S. and European Union negotiators have reached a deal to increase U.S. exports of beef to the EU, the European Commission said in a June 13 press release. Under the agreement in principle, the EU will allocate 35,000 tons of its beef tariff-rate quota to U.S. exporters, with the remainder of the TRQ allocated to all other exporting countries. The increase will be phased in over a seven-year period, the release said.
Before the U.S.-China trade war began, all countries that exported goods to China faced an average 8 percent tariff, according to a recent analysis from the Peterson Institute for International Economics. But now, U.S. exports to China are taxed on average at 20.7 percent, while German, Asian and Canadian producers are facing an average tariff of 6.7 percent.
Tariffs Hurt the Heartland sent a letter to President Donald Trump June 13 saying that he should push China to change its trade practices, but said, "broadly applied tariffs are not an effective tool to change China’s unfair trade practices." The letter, signed by 520 companies and 141 associations, said, "We remain concerned about the escalation of tit-for-tat tariffs. We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy."
Vietnam is cracking down on transshipment schemes that falsely claim Vietnamese country of origin to avoid high tariffs on Chinese goods, according to a June 13 report in CustomsNews. Vietnam Customs has discovered dozens of certificate of origin violations so far, particularly in the textiles and apparel, seafood, agricultural, steel, aluminum and timber sectors, the report said.
The China Cotton Association will request an exclusion for uncombed cotton from Chinese retaliatory tariffs on U.S. goods, according to a report from Reuters. The trade group published a notice on its website June 13 asking for information from its members on their cotton imports and the impacts on their businesses, which will be used in the submission to the Chinese Ministry of Finance. The period to request exclusions from China’s retaliatory tariffs ends July 5 (see 1905290034).