Latest news with #MorningTrade
Politico
3 days ago
- Business
- Politico
Trump's steel salvo looms over Greer
QUICK FIX — President Donald Trump's plan to hike tariffs on steel and aluminum starting Wednesday raises the stakes for negotiations this week with the United Kingdom and other trading partners. — The Trump administration is weighing a backup plan if courts strike down its broader tariff agenda: Section 122 of the 1974 Trade Act. — German Chancellor Friedrich Merz's White House visit on Thursday will touch on trade and security issues. It's Monday, June 2. Welcome to Morning Trade. Got news tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@ ddesrochers@ and dpalmer@ Follow us on X: @_AriHawkins, @drdesrochers and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. ICYMI: The Conversation kicked off with Dr. Oz In the premiere episode of The Conversation, Dasha Burns sat down with Dr. Mehmet Oz — now leading the Centers for Medicare and Medicaid Services — for a candid talk on drug prices, potential Medicaid cuts and why he's getting early morning calls from President Donald Trump. Plus, POLITICO's Jonathan Martin dished on the Ohio governor's race (featuring Elon Musk, Vivek Ramaswamy and former Ohio State football coach Jim Tressel), and Kyle Cheney unpacked Trump's legal battle over 'Liberation Day' tariffs. Watch the full episode on YouTube. And don't miss a moment — subscribe now on Apple Podcasts or Spotify to get new episodes when they drop. Driving the day GREER-ING UP FOR OECD: President Donald Trump's plan to double steel and aluminum tariffs is ratcheting up pressure as U.S. Trade Representative Jamieson Greer heads to Paris for trade talks. He'll be tasked with countering the perception that foreign countries now have the upper hand, after a pair of court rulings sent the administration's tariff strategy reeling. The looming tariff hike on metals will be top of mind for British Trade Secretary Jonathan Reynolds, who will meet Greer for the annual ministerial-level meeting of the Organization for Economic Cooperation and Development tomorrow and Wednesday. The confab will gather officials from dozens of market-based countries for talks that will touch on the themes of free trade, the digital economy and sustainable and inclusive growth. The U.S. and U.K. this week hope to nail down a timeline to implement the framework for a trade deal which slashed tariffs on imports of British autos, steel and aluminum on the sidelines of the gathering, after the countries agreed early last month to coordinate the timing of their tariff reduction. Businesses fear it will be weeks before any duties are actually removed. One step back: The Paris trip comes less than a week after Trump announced plans to hike steel and aluminum tariffs to 50 percent starting Wednesday, which would build off tariffs imposed in his first administration under a national security trade provision known as Section 232 of the 1962 Trade Expansion Act. The president made the announcement during a speech on Friday at a U.S. Steel facility in West Mifflin, Pennsylvania, and later took to Truth Social to say: 'This will be yet another BIG jolt of great news for our wonderful steel and aluminum workers.' 'The administration's position is a lot shakier going into the meeting,' said Ed Gresser, a former official in the Office of USTR now at the Progressive Policy Institute, a left-leaning think tank. Gresser pointed to court rulings last week that invalidated the far-reaching levies Trump imposed using the International Emergency Economic Powers Act, which could force the president to scrap a major part of his tariff strategy. But Gresser added that a decision to nullify Trump's so-called reciprocal tariffs could eventually help focus and advance trade negotiations. 'We wouldn't have these 10 percent global tariffs anymore, and instead would be bargaining over very specific industrial sectors,' Gresser told Morning Trade. Legal lexicon: Trump's sector-specific tariffs are becoming a growing focus of trade negotiations after the U.S. Court of International Trade and a second federal court rejected the president's use of the emergency law to impose tariffs. A third federal court promptly issued a temporary stay of one of the rulings, keeping the tariffs in effect for now. But the threat to expand Section 232 tariffs suggests the Trump administration will simply dig in to other trade authorities, if courts ultimately block his use of IEEPA for tariffs. What else to watch: The trip will also give Greer an opportunity to meet face-to-face with trade ministers from other leading economies, such as France, Germany, Australia, Japan and South Korea. Greer in an interview with CNBC on Friday reiterated that deals with several countries could come in a matter of weeks. He said he has standing calls with India 'every day,' and is planning to meet this week with officials from Malaysia, Vietnam and the European Union. REGULATORY REVIEW NEW TARIFF LAW, WHO DIS? The Trump administration is eyeing another obscure trade weapon as a potential fallback if courts once again block its sweeping tariffs: Section 122 of the 1974 Trade Act, which allows the president to temporarily impose up to 15 percent tariffs. Why it could work: The strategy would empower the administration to quickly impose tariffs without congressional approval or a more burdensome evidence-gathering and review process, and is one of several under consideration, POLITICO reports. It would also let the president replace existing 10 percent across-the-board tariffs on countries, but only for six months. After that, Trump would need Congress' approval to extend them. 'Rest assured, tariffs are not going away,' Commerce Secretary Howard Lutnick told Fox News on Sunday. 'He has so many other authorities that even in the weird and unusual circumstance where this was taken away, we just bring on another or another or another. Congress has given this authority to the president, and he's going to use it.' Keep in mind: While Section 122 is generally viewed as less controversial for imposing tariffs than IEEPA, the provision has never been used by a president for that purpose — potentially leaving it vulnerable to legal challenges. ADMIN'S VIEW: Lutnick also insisted Sunday that a court fight over Trump's tariff power won't blunt the administration's leverage as it works on trade deals with key partners. 'All of the countries that are negotiating with us understand the power of Donald Trump and his ability to protect the American worker,' Lutnick told Fox News. 'And so what they're doing is they're negotiating with us. I think it cost us a week, maybe — maybe cost us a week. But then everybody came right back to the table. Everybody's talking to us.' Around the World MERZ TO MEET TRUMP: The European Union will get another chance to gauge progress in negotiations with Washington, when German Chancellor Friedrich Merz meets Trump on Thursday for the first time since taking office last month. The leaders are expected to discuss the war in Ukraine, the Middle East and trade policy, German government spokesperson Stefan Kornelius said in a statement. There's a history: Days after the German chancellor was elected, Merz urged Trump in a phone call to end his trade war with Germany and his European allies, saying he told the president 'the best solution would be 'down to zero' for everything and for everyone.' CHINA IN VIOLATION: Treasury Secretary Scott Bessent said Sunday that China is withholding critical minerals it agreed to release in a trade deal the country signed with U.S. negotiators last month in Geneva, which slashed triple-digit tariffs on both sides. 'What China is doing is they are holding back products that are essential for the industrial supply chains of India, of Europe, and that is not what a reliable partner does,' he told CBS host Margaret Brennan on 'Face the Nation.' TRADE OVERNIGHT — Trump court turmoil strengthens EU hand in tariff talks, POLITICO Europe reports. — Imports plunge in early sign of Trump tariff impact, per POLITICO Pro. — White House set to issue EOs boosting US drone-makers over China, per POLITICO Pro. — German carmakers promise 'massive' investments in US to dodge Trump tariffs, POLITICO Pro reports. — OP-ED: Where the Trade Court's Tariff Decision Went Wrong, per The Wall Street Journal. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@ ddesrochers@ and ahawkins@ Follow us @POLITICOPro and @Morning_Trade.
Politico
19-05-2025
- Business
- Politico
Will Trump's trade curbs skip the Middle East?
QUICK FIX — President Donald Trump's new AI deals with Gulf nations is fueling optimism in the global tech sector that the Middle East may be spared from looming U.S. chip controls. — The Trump administration could pursue new regional tariff rates, said Treasury Secretary Scott Bessent, ahead of a deadline for the return of so-called reciprocal tariffs. — The Commerce Department is seeking input on potential changes to how it calculates duty rates. It's Monday, May 19. Welcome to Morning Trade. Got news tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@ ddesrochers@ and dpalmer@ Follow us on X: @_AriHawkins, @drdesrochers and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Driving the day FEELING CHIPPER: The global tech sector sees the Trump administration's multibillion-dollar AI deals between U.S. and Gulf firms as a signal the Middle East could be spared as its Commerce Department moves toward tightening chip controls on China. 'The Middle East AI chip deals that the President and his staff have made [are] important to the AI diffusion conversation,' one corporate representative for a major industry group, granted anonymity to speak openly about expectations, told Morning Trade. 'The Middle East is an important market and if the U.S. is not at the table, those countries will procure their chips from China and harm U.S. competitiveness.' Reminder: The White House last week said Trump secured more than $2 trillion in investment agreements in the region. That included nearly $150 billion between Saudi Arabia and American defense contractors, an order by the Qatari government for 160 Boeing planes and a $60 billion partnership between American energy companies and Abu Dhabi's state-run oil firm. The deals come as the Trump administration begins to revise the Biden-era AI Diffusion Rule, which it decided to officially block last week over concerns that the policy would adversely harm domestic industry. The rule, which was unveiled in the last week of the Biden administration, would have imposed country-specific caps on sales of advanced chips — including strict curbs on countries in the Middle East — in part because of concerns that countries are rerouting chips to China that originate in the U.S., in violation of U.S. curbs. The measure faced heavy opposition from U.S. chip giants like Nvidia. Trump's Commerce Department is now preparing to replace the Biden-era measure with its own curbs on chips. Commerce has not released more details about the content of the new rules, although senior officials have signaled they want to work on a truncated timeline. A spokesperson for Commerce did not immediately respond to Morning Trade's request for more information. 'We appreciate the Trump Administration's commitment to U.S. leadership on AI and to properly balancing economic and national security interests,' said Information Technology Industry Council President and CEO Jason Oxman in a statement to Morning Trade. The trade group ITI counts Amazon, Apple, Intel and Nvidia as members. 'The Trump Administration should develop its new approach with robust stakeholder engagement and provide direction and certainty in the interim period,' Oxman added. Geopolitical swing-states: The Middle East has increasingly become the focus of policies to counter China's access to the high-tech sector. But but but: Sam Winter‑Levy, a fellow at the Carnegie Endowment for International Peace, said the Trump administration could be less resistant than the Biden administration was to giving away large volumes of advanced chips to countries, including the UAE and Saudi Arabia, that retain ties with China in the AI domain. 'With this administration, it seems like internal divisions on this issue remain, but the president and some of the tech elites around him, like David Sacks, seem to be much more sympathetic towards the UAE and Saudi Arabia's promises,' Winter‑Levy said, writes POLITICO's Gabby Miller. Sacks, Trump's AI czar and a former venture capitalist, was reportedly part of high-level negotiations between the U.S. and Emirati firm G42 for a deal that would send hundreds of thousands of high-end chips to the UAE, which has fueled divisions within the administration. INSIDE THE ADMINISTRATION REGIONAL DEALS FLOATED: Treasury Secretary Scott Bessent on Sunday suggested the administration could impose some tariffs by region, ahead of a looming July 9 deadline for the return of so-called reciprocal tariffs. 'President Trump has put them on notice that if you do not negotiate in good faith, you will ratchet back up to your April 2 level,' Bessent said on CNN's 'State of the Union with Jake Tapper.' He added, 'My other sense is that we will do a lot of regional deals — 'this is the rate for Central America, this is the rate for this part of Africa.'' The remarks come as the administration begins to come to grips with the difficulty of closing deals with dozens of countries in 90 days. At the final stop on a multi-day Middle East trip, Trump told reporters that while '150 countries' were seeking to make deals with the U.S., it was 'not possible to meet the number of people that want to see us.' Instead, Trump said U.S. trading partners should expect individual letters from Bessent and Commerce Secretary Howard Lutnick 'at a certain point over the next two to three weeks,' in which they would be 'telling people what they will be paying to do business in the United States.' Behind the curtain: One person familiar with the negotiations said there were simply 'too many nations to negotiate with all at once.' The person indicated that the administration plans to impose a specific tariff level after July, while other deals will be negotiated 'in due course.' TRADE WARS CATCH GOP HEAT: Sen. Rand Paul (R-Ky.) attacked the economic logic of Trump's aggressive tariff strategy on Sunday — and agreed that the policies raise constitutional concerns, POLITICO reports. 'Well, tariffs are taxes, and when you put a tax on a business, it's always passed through as a cost. So, there will be higher prices,' Paul said during an interview on ABC's 'The Week.' GLOBAL INDUSTRY CORNER DUTY OVERHAUL? The Commerce Department is weighing changes to how it calculates duty rates, a decision that could alter how tariffs are imposed on strategic imports from foreign countries, according to a document published in the Federal Register. The administration is seeking input on possible alternatives to 'Cohen's d,' which is a statistical measure the department uses in antidumping and countervailing duty investigations, 'to define when prices differ significantly among purchasers, regions, and time periods,' according to the notice, made public on Friday. Commerce is asking for stakeholders to file public comments by May 30. Going deeper: When Commerce detects pricing patterns that suggest certain purchasers are charged systematically different prices, it can apply its controversial 'zeroing' methodology, which disregards negative dumping margins and can lead to higher duty rates. The method has consistently sparked disputes at the World Trade Organization. TRADE OVERNIGHT — In states, tariffs aren't yet producing the surge of foreign investment Trump is promising, POLITICO reports. — China slaps anti-dumping duties on plastics from US, EU, Japan and Taiwan, POLITICO Europe reports. — UK accused of undermining WTO rules with US trade deal, POLITICO Pro reports. — Vance hopeful for US-EU 'long-term trade advantages,' per POLITICO Europe. — US Treasury's Bessent to attend G7 finance meeting, focus on imbalances, per Reuters. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@ ddesrochers@ and ahawkins@ Follow us @POLITICOPro and @Morning_Trade.
Politico
12-05-2025
- Business
- Politico
US-China hit pause on sky-high tariffs
With help from Doug Palmer QUICK FIX — The United States and China slashed tariffs on each other's goods in a surprise breakthrough aimed at reviving trade between the economies. — British plane and aircraft parts are exempt from any potential tariffs that could stem from the Trump administration's latest Section 232 investigation. — Alabama Republicans are asking the Commerce Department to set tariff rates on lumber to at least 60 percent. It's Monday, May 12. Welcome to Morning Trade. Got news tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@ ddesrochers@ and dpalmer@ Follow us on X: @_AriHawkins, @drdesrochers and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Driving the day TARIFFS DELAYED: The United States and China agreed to slash tariffs on each other's imports for 90-days, and implement a new platform to resolve trade disputes, according to a joint statement from Geneva. Starting Wednesday, the U.S. will temporarily lower its tariffs on Chinese imports from 145 percent to 30 percent, while the Chinese side will drop measures from 125 percent to 10 percent. 'We want more balanced trade. And I think that both sides are committed to achieving that,' Treasury Secretary Scott Bessent said at a joint press conference from Switzerland, where Trump administration officials were meeting with the Chinese delegation. 'We would like to see, China open to more U.S. goods. We expect that as a negotiation to proceed.' The countries' joint statement says that the U.S. and China will 'establish a mechanism to continue discussions about economic and trade relations,' which will be led by China's Vice Premier He Lifeng, alongside Bessent and U.S. Trade Representative Jamieson Greer. Senior U.S. officials said the countries also discussed fentanyl, and that negotiations may lead to 'purchasing agreements' by China. 'Both sides represented their national interests well, but we also concluded that we had shared interests and that neither side was interested in a decoupling,' Greer said at the press conference. Some context: The update comes after both the U.S. and China touted substantial progress in negotiations over the weekend, and as commerce between the countries begins to grind to a halt, as American retailers suspend orders, prompting fears of shortages. Both President Donald Trump and Chinese leadership had gotten increasingly desperate to nail down an off-ramp to trade tensions in recent months. The latest agreement could also lay the groundwork for future negotiations toward a broader trade pact, in the vein of the so-called Phase 1 deal. Rewind: Trump spent his first few months in office trying to compel Chinese leader Xi Jinping to the bargaining table. Unlike other countries targeted by U.S. tariffs, China has not rushed to request consultations nor offered deals to cut its trade barriers — rather it has retaliated with higher tariffs of its own. That prompted an escalating tit-for-tat on trade that has made it prohibitively expensive for the two countries to buy each others' goods. Around the World AEROSPACE EXEMPT: British plane parts are exempt from any new tariffs that could stem from the Trump administration's latest national security investigation into imports of commercial aircraft, jet engines and their parts, a White House official confirmed to your host. The exemption is part of the evolving terms of the U.S.-U.K. framework that both sides announced last week, the White House said. The countries' agreement eliminated some trade barriers and laid out negotiations for more contentious sticking points, such as the U.K.'s Digital Services Tax. Reminder: Commerce on May 1 launched an investigation into imports of commercial aircraft, jet engines and their parts, laying the groundwork for another round of tariffs, according to a filing made public on Friday. A full document on the investigation is set to be published tomorrow. FYI: The aerospace industry produces among the largest trade surplus of any sector in the U.S., and many companies rely on specialized suppliers for parts that are sometimes produced only by select manufacturers scattered around the world. Around the World U.K. BEEF DEAL COULD HURT BRAZIL: The U.K.'s gain could be Brazil's loss. The framework agreement announced last week gives the U.K. a 13,000 metric ton low-duty quota to ship beef to the United States. That will come out of the 65,000 metric ton quota for 'Other Countries' that don't have a specific quota allocation. Brazil is the largest user of the Other Countries quota, often supplying more than 90 percent. The U.K. agreement also increases a duty-free quota for the U.S. to ship beef to the U.K. to 14,000 metric tons, from 1,000 tons previously. That's expected to be reserved for beef from cattle raised without artificial growth hormones. The industry hopes for 'more details soon on how the quotas will be implemented,' Kent Bacus, executive director of the National Cattlemen's Beef Association, told Morning Trade. The beef concession to the U.K. could complicate trade talks with Brazil, which has long wanted more access to the United States for its agricultural products. On The Hill ALABAMA GOP WANT LUMBER TARIFFS: Alabama Republicans are asking the Trump administration to set the duty rate on timber and lumber products to at least 60 percent, as it pursues a Section 232 investigation, according to a letter first obtained by Morning Trade. 'In recent years, our $12 billion domestic cabinet industry has been devastated by unfairly traded imports of kitchen cabinets and cabinet components,' wrote Sens. Katie Britt and Tommy Tuberville, as well as Reps. Barry Moore, Gary Palmer, Mike Rogers, Dale Strong and Robert Aderholt in a note sent Thursday to Lutnick and Undersecretary of Commerce for Industry and Security Jeffrey Kessler. The Alabama Republicans note that the U.S. kitchen cabinet industry supports 250,000 jobs around the country and 5,000 in Alabama, and warn some U.S. manufacturers are operating at as low as 30 percent capacity. Reminder: Trump in March ordered an investigation focused on the lumber industry as part of a broader strategy aimed at making the United States self-sufficient in timber and lumber production. 'IN THE DARK': Sen. Elizabeth Warren (D-Mass.) and Rep. Rosa DeLauro(D-Conn.) said the Trump administration has failed to communicate the status of trade talks to Congress. 'The public has been left completely in the dark on the status of these negotiations—or forced to rely on vague, second-hand accounts of private meetings, including those that Secretary Bessent is reportedly holding with well-connected industry insiders,' the lawmakers wrote in a letter dated Thursday and sent to Lutnick, Bessent and Greer. TRADE OVERNIGHT — Taiwan trumpets investments as it seeks to avoid US tariffs, POLITICO Pro reports. — USDA re-pauses livestock imports from Mexico as screwworm risk grows, POLITICO Pro reports. — US senator introduces bill calling for location-tracking on AI chips to limit China access, per Reuters. — Trade war is about more than just trade, China's official news agency argues, per POLITICO Pro. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@ ddesrochers@ and ahawkins@ Follow us @POLITICOPro and @Morning_Trade.
Politico
17-03-2025
- Business
- Politico
Kentucky in Trump's tariff crosshairs
Driving the day — President Donald Trump's decision to wage a trade war with Europe is threatening Kentucky's bourbon producers. — U.S. trading partners have two case studies to consider as they weigh how to deal with Trump's persistent tariff threats. — Companies including Elon Musk's Tesla are urging the Office of the U.S. Trade Representative against broad-based tariffs. It's Monday, March 17. Welcome to Morning Trade. Got news tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@ ddesrochers@ and dpalmer@ Follow us on X: @_AriHawkins, @drdesrochers and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Driving the day SOBERING THREAT: In deep-red Kentucky, Trump is facing a growing backlash over his tariff policies from business leaders and lawmakers who are anxious the state will bear the brunt of a trade war with the European Union. The global spirits industry is bracing for pain: The EU is enacting 50 percent tariffs on U.S. whiskey starting April 1, in retaliation to Trump's latest round of duties on steel and aluminum. In response, the president upped the ante further, threatening a whopping 200 percent tariff on alcohol from France and other EU countries. The announcement came weeks before Trump's reciprocal tariffs planned for April 2, which could mark another blow to industry. Victor Yarbrough, who helped open Brough Brothers Distillery, the first Black-owned bourbon distillery in Kentucky, told Morning Trade that the administration's tariff policy is rattling the industry. Kentucky is at risk of becoming 'collateral damage' if the escalation continues, he said. '2025 was going to be the year of expansion for us,' Yarbrough told your host, outlining plans to expand into Canada and European countries like France and Germany. But the ongoing trade threats, 'Effectively put a hiatus on all of this — and impacted our ability to kick our export strategy into gear.' Kentucky, which produces the vast majority of the world's bourbon, would be particularly at risk of any trade war escalations. The European Commission last week said it would reimpose tariffs on iconic American products such as Harley-Davidson motorcycles, jeans and bourbon. Lawmakers makes their case: Republicans in Kentucky are also voicing their grievances, even forming a rare alliance with the Democratic governor. 'Tariffs are taxes and if you tax trade you'll get less trade and less prosperity,' GOP Sen. Rand Paul wrote in a post earlier this month on X. The criticism comes alongside that of former Senate GOP leader Mitch McConnell — and Democratic Gov. Andy Beshear, who warned the tariffs would harm 'all of our American families' in an interview on Saturday. 'I don't say that because I'm a Democratic governor and he's a Republican president. I say that because it's his decision and his decision alone that's harming our American families,' Beshear told CNN. Not just the EU: Industry groups also tell Morning Trade that several Canadian provinces have removed American alcoholic beverages from store shelves as a form of retaliation, after the U.S. launched 25 percent tariffs on the country — before temporarily scaling some back. 'The growth of our industry is very, very intertwined,' Chris Swonger, president & CEO of the Distilled Spirits Council of the United States, told Morning Trade. He added, 'We have American companies that may own Canadian whiskey or a tequila, or an Irish Whiskey or a Cognac. So those American companies could be getting hit from all sides.' Around the World TO DEFY OR KISS THE RING? Countries have been taking notes on two opposing strategies for responding to Trump's persistent tariff threats, the international trade team reports. Canada has taken a more confrontational approach, including immediate retaliation, and drew swift White House retribution; Mexico has tried to lay low and buy time, but doesn't have much more to show for it. World watches: Most countries hit by Trump's aluminum and steel tariffs took Mexico's more cautious approach. The U.K. 'will keep all options on the table,' new Prime Minister Keir Starmer said, but did not respond to the steel and aluminum tariffs. Instead, Starmer is sending his trade chief, Jonathan Reynolds, to Washington this week, and is expected to start hammering out a trade deal. Meanwhile, Australian Ambassador to the U.S. Kevin Rudd said his country has been watching the recent U.S. back-and-forth with Canada and Mexico as well as China, and told Australian media that he saw room for negotiation. How long can they thread the line? Any carrot-based strategy can only stay that way so long, as U.S. trading partners stare down Trump's April 2 target for reciprocal tariffs. CALM FROM CANADA? Ontario Premier Doug Ford and Commerce Secretary Howard Lutnick will get another chance to hammer out their differences when they meet again this week. Ford told reporters that he is hopeful that the 'temperature is being lowered' after a meeting with Lutnick on Thursday, while confirming their next confab. REGULATORY REVIEW INDUSTRY ANXIETY: Hundreds of companies, including Elon Musk's Tesla, are weighing in on the Office of the U.S. Trade Representative's review of unfair trade practices from foreign countries and warning that unchecked tariff hikes would weigh on global industry. Tesla, in a letter dated last week, said the company would be 'exposed' to retaliation and asked the trade office to 'consider the downstream impacts' of trade actions. The letter also warned that past tariffs have 'increased costs to Tesla for vehicles manufactured in the United States' and resulted in a 'less competitive international marketplace for U.S. manufacturers.' That sentiment is reflected by a wide range of industry groups in a signal of broad anxiety over Trump's tariff threats. That includes the U.S. Chamber of Commerce, which also slammed broad-based tariffs as a tool for policy and called on the Trump administration to pursue a 'zero-for-zero' approach to other countries' trade curbs. 'The best pro-growth response to foreign trade barriers is to negotiate enforceable trade agreements to eliminate tariffs and other trade barriers, open foreign markets, and guarantee reciprocity,' they said in their own submitted remarks. AMERICAN AI EXPANSION? More than a dozen trade and tech groups sent a letter asking Trump to focus on opening up foreign markets to American AI and AI-enabled products. The push comes on the heels of Trump's Jan. 23 executive order, designed to remove barriers to U.S. leadership of the technology, which tasked his advisers to develop an AI action plan within 180 days. 'To protect America's AI edge, it is critical that your administration's AI Action Plan include a robust international engagement strategy that ensures foreign markets are open to American AI,' the groups wrote in a letter sent to the president and obtained by Morning Trade, signed by the National Foreign Trade Council and the U.S. Council for International Business, among others. TRADE OVERNIGHT — French PM says EU hitting wrong targets with retaliation tariffs on US, per POLITICO Pro. — Puck around, find out: Florida and Canada are on a trade war collision course, POLITICO reports. — Europe's drug shortage plan looked like a win for the EU and US — until Trump got involved, POLITICO Pro reports. — Key consumer sentiment gauge plunges amid concern over Trump trade wars, per POLITICO. — Top broadband official exits Commerce Department with sharp Musk warning, POLITICO reports. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@ ddesrochers@ and ahawkins@ Follow us @POLITICOPro and @Morning_Trade.
Politico
03-03-2025
- Business
- Politico
Will Trump keep his tariff pledge?
QUICK FIX — Trump administration officials are signaling the president could downgrade or reverse planned 25 percent tariffs on Mexico and Canada, expected to come into force tomorrow. — President Donald Trump ordered an investigation that could lead to new tariffs on lumber imports in another blow to Canada. — The chair of the Senate Finance Committee blocked a push to pass a bill by unanimous consent that would rein in Trump's authority over tariffs It's Monday, March. 3. Welcome to Morning Trade. Got news tips? Suggestions? Want to grab a coffee? Hit us up at: ahawkins@ ddesrochers@ and dpalmer@ Follow us on X: @_AriHawkins, @drdesrochers and @tradereporter. Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. Driving the day O TARIFF, WHERE ART THOU?: The White House is hinting that Trump could still back off 25 percent tariffs set to hit Mexico and Canada tomorrow, fueling uncertainty over a plan that's straining ties with the U.S.' closest trading partners. One step back: Trump reiterated that those tariffs would come into force as scheduled in a Truth Social post last week: 'We cannot allow this scourge [of drugs] to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled.' But in the days leading up to the Tuesday deadline, it's become increasingly unclear how certain the promised tariffs really are. Trump and other White House officials have said discussions are ongoing, praising concessions by the countries, while also delivering a series of confounding and contradictory statements on the timeline of the tariffs. Commerce Secretary Howard Lutnick on Sunday said the tariffs are a 'fluid situation.' 'They have done a lot, so [Trump is] sort of thinking about right now how exactly he wants to play with Mexico and Canada,' he said during an interview with Fox News. 'There are going to be tariffs on Tuesday on Mexico and Canada. Exactly what they are, we're going to leave that for the president and his team to negotiate,' Lutnick said. Treasury Secretary Scott Bessent also said on Sunday that Mexico has offered to match U.S. curbs on China, suggesting this could help avoid the planned tariffs. He added that if Canada follows suit, it 'would be a very good start.' Those tariffs could be imposed by Canada and Mexico 'by Tuesday. Or maybe the tariff wall goes up, and then we see what happens from there,' Bessent told CBS News' Margaret Brennan. Backing up: The remarks also come after Trump suggested he would delay the tariffs until April 2, which is the same date he vowed to impose reciprocal tariffs on all trading partners. That timeline, however, was quickly shot down by a White House official who spoke to Morning Trade. 'They're both on schedule right now. It's just one of them could change based on negotiations,' the official told your host last week, referring to the tariffs on Mexico and Canada. North American view: Senior Mexican and Canadian officials are still working to defuse tensions and show that they are taking steps to address Trump's concerns. 'Canada is not an issue in terms of [being a] source of illegal fentanyl into the United States,' Canadian Prime Minister Justin Trudeau told reporters in London on Sunday. 'But we all know the American administration will make its own choices in terms of tariffs,' he said. 'We will continue to work to do everything we can to make sure that there are no tariffs on Tuesday.' Canadian Conservative Leader Pierre Poilievre, however, signaled the threats could have lasting damage on ties with Washington. He advised Canadians during a press conference on Sunday that regardless of what Trump does, 'We can't rely on him. And we can't rely on the Americans anymore.' DE MINIMIS REVISED: Shortly before the new tariffs take effect, the Trump administration late Sunday evening also revised its executive orders to apply the de minimis trade provision to 'covered articles' in Canada and Mexico. The amended orders state that the provision will be revoked once Commerce notifies Trump that 'adequate systems are in place to fully and expeditiously process and collect tariff revenue,' in a signal the administration lacks the infrastructure to quickly nullify the measure. Reminder: The de minimis trade provision allows the flow of goods worth $800 or less into the United States duty free and subjects those packages to less inspection. Trump reversed the decision to strip China's access to the provision last month, which is aggressively used by Chinese online retailers. REGULATORY REVIEW LUMBER PROBE: Trump ordered an investigation on Saturday that could lead to additional tariffs on billions of dollars' worth of lumber from Canada and other countries using Section 232 of the Trade Expansion Act of 1962. The president also signed a second document aimed at changing government regulation of forestry management practices so more U.S. timber and lumber can be sold. A White House official said the pending action reflects a two-pronged approach aimed at making the United States largely self-sufficient in timber and lumber production. Who will it hit? The probe will primarily focus on the lumber industries in Canada, Germany and Brazil, to determine whether subsidies in those countries are driving down the U.S. market. But mostly Canada: The potential lumber tariff could serve as yet another way for the Trump administration to undercut Canada's economy. Any tariff would be on top of an existing 14.54 percent trade remedy duty on Canadian softwood lumber, and could potentially be on top of a 25 percent blanket tariff. On timeline: Lutnick will carry out the investigation under Section 232, which allows the president to restrict imports deemed a threat to national security. Those probes usually take up to 270 days, but the White House official said he expected Lutnick to move faster than that. Is lumber a risk?: 'The investigation reveals just how broken both Section 232 and the 'economic security is national security' approach to U.S. trade relations really is,' Scott Lincicome, vice president of general economics at the Cato Institute, told Morning Trade. 'There's no direct, serious connection between wood products and national defense, and if war broke out tomorrow, there'd be zero concern about American 'dependence' on foreign lumber.' Doug and Daniel have more here. On The Hill 'TOO BLUNT': The chair of the Senate Finance Committee Mike Crapo (R-Idaho) last week blocked a push to pass a bill unanimously that would rein in Trump's executive authority to impose tariffs known as the STABLE Trade Policy Act. One step back: Sen. Chris Coons (D-Del.) asked for unanimous consent to pass the measure, co-led by Sen. Tim Kaine (D-Va.), which would prevent Trump from imposing tariffs on allies or countries that share a free trade deal with the U.S. without congressional approval. GOP objects: Crapo, in his own remarks to lawmakers, agreed broadly with Coons that the U.S. should not 'undertake tariff actions lightly' on U.S. allies or FTA partners, but he added that the option for economic curbs should not be taken off the table. 'I don't recall anyone suggesting that the Biden administration could not impose sanctions on Nicaragua last year because it was a CAFTA party,' Crapo said. He was referring to the Central America-Dominican Republic Free Trade Agreement between the U.S. and regional economies. 'The STABLE Trade Policy Act is accordingly too blunt an instrument when nuance is called for, including the option of tariffs in some instances,' Crapo told lawmakers. ROLLINS VOWS TO PROTECT: Agriculture Secretary Brooke Rollins vowed Friday to 'be in the room' to protect farmers and rural communities against 'the immediate hit and repercussion' of Trump's threatened tariffs. Jordan Wolman has more here. TRADE OVERNIGHT — Macron: EU needs 'hundreds of billions' in defense spending as US pivots away, POLITICO reports. — Venezuela's opposition leader defends Trump's move to cancel oil licenses, per POLITICO. — Top Russian security official meets with China's Xi in Beijing, TASS reports, Reuters reports. — Economic agreement with Ukraine off the table for now, Bessent says, per POLITICO. THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@ ddesrochers@ and ahawkins@ Follow us @POLITICOPro and @Morning_Trade.
