Fashion Intel & Analysis
The U.S. and Guatemala have reached an agreement on asylum after Trump threatened a travel ban, tariffs, and remittance fees earlier this week. “The United States and Guatemala have reached an agreement on asylum. The agreement was just signed in the Oval Office,” the official White House twitter feed reported this afternoon. Details on the agreement are not yet available.
Today U.S. Customs and Border Protection released the CBP Trade and Travel Report Fiscal Year 2018. CBP recaps many of the enforcement activities this past year. They particularly focus on the big increase in duties paid. CBP collected over $40.6 billion in duties in fiscal year 2018, an increase of nearly 23 percent over the previous fiscal year. The sharp increase in duty collections is attributed to the 232 tariffs on steel and aluminum, 201 tariffs on washing machines and parts, solar panels, and of course the 301 tariffs on Chinese goods.
The money collected from the imposed tariffs continues to increase in FY19. Below is an update based on Customs and Border Protection’s Trade Statistics.
As of July 17, 2019, the U.S. has collected more than $30 billion in additional tariffs.
• $917 million in Section 201 tariffs on washing machines and on solar panels.
• $1.8 billion in Section 232 aluminum tariffs.
• $5.9 billion in Section 232 steel tariffs.
• $21.3 billion in Section 301 tariffs on goods from China.
The International Monetary Fund (IMF) says global growth remains subdued in its update to its half-yearly World Economic Outlook. Global growth is forecasted at 3.2 percent in 2019 and 3.5 percent in 2020, 0.1 percentage points lower in both years than projected in April. IMF says the gloomier outlook is due to the the escalations in the U.S.-China trade war, the uncertainty surrounding Brexit, and the rising impact of U.S. sanctions.
IMF also addresses the United States’ recent trade negotiation tactics and urges to ease tensions. “Multilateral and national policy actions are vital to place global growth on a stronger footing. The pressing needs include reducing trade and technology tensions and expeditiously resolving uncertainty around trade agreements (including between the United Kingdom and the European Union and the free trade area encompassing Canada, Mexico, and the United States). Specifically, countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms.”
The U.S. hopes to significantly increase trade with Pakistan, President Trump told White House reporters yesterday before a bilateral meeting with Pakistan’s Prime Minister Imran Khan.
Trump said he wants to build stronger economic and trade ties with Pakistan as we make progress on U.S. security concerns. “I see great trade with Pakistan. And I’m not — I’m not talking about a little bit more. I’m talking about — we could go 10 and even 20 times what we’re doing right now,” Trump said.
Trump continued to say the U.S. could quadruple trade with Pakistan, “I think we’re going to have a fantastic trade relationship. I don’t mean we’ll increase it by 20 percent. I mean, I think we can quadruple it. I think it could go — I mean, literally, it sounds crazy — you could go 10 times more. You could go 20 times more. Because what we do right now is not much, and we should do a lot.”
Members of Congress return to work today and face a long list of issues. There are only twelve working days until the start of the August recess, so the pressure is on. There are many difficult issues on the agenda, and on the trade front the top issue is the U.S.-Mexico-Canada Agreement (USMCA). Under the terms of Trade Promotion Authority, the Administration could send the agreement to Congress at any time. But many Democrats, including Speaker Pelosi (D-CA), have asked them to wait until there is a resolution to several issues, including enforcement, worker rights and environmental standards. The New Democrat Coalition, who are essential to passage of USMCA, yesterday wrote to U.S. Trade Representative Robert Lighthizer asking him to not send the implementing legislation to Congress until there is full agreement with the House leadership. Representative Derek Kilmer (D-WA) and coalition chair told reporters “We think it would be a mistake to put forward implementing legislation without the support of Democratic leadership. This makes getting the UMSCA across the finish line harder rather than easier.“
Need a refresher about the key provisions in USMCA and the timeline under Trade Promotion Authority? Take a look at USFIA’s webinar featuring Akin Gump trade experts, Josh Teitelbaum and Justin McCarthy.