Showing posts from 2019

New Steel Tariffs on Brazil and Argentina?

President Trump announced via tweet on Monday that he was imposing tariffs on steel and aluminum imports from Brazil and Argentina due to both governments devaluating their currencies. These two countries previously had reached a deal with the Trump administration to avoid Section 232 steel and aluminum tariffs by agreeing to quotas. Both Argentina and Brazil were exempted from the 232 steel and aluminum tariffs in May 2018. The tariffs can’t be “restored” because the two countries were not subject to tariffs in the first place. The exemptions for both countries required Presidential Proclamations, and to change the quotas to tariffs would require new proclamations as tariffs can’t be re-imposed by a tweet. At this writing, we are still awaiting these proclamations. If the President does move forward with these tariffs, it would likely lead to an immediate legal challenge. A current U.S. Court of International Trade case (Transpacific Steel v U.S.) is focused on this exact issue of

President Trump Announces Phase One Deal with China, Suspends Tariff Increase

After meeting with Chinese officials on October 11, 2019, President Trump announced his administration had reached a limited Phase I trade deal with China, largely maintaining the status quo and preventing future escalation. While negotiators have yet to put pen to paper, both sides hope to have a document ready for signature by President Trump and President Xi of China at the November 12-14 Asia Pacific Economic Cooperation (APEC) meetings. Both sides indicate that if they sign Phase I, they will immediately move forward negotiating a broader Phase II deal. President Trump also announced he would suspend the tariff increase of 25 to 30 percent on more than 7,000 Chinese goods that was slated to take effect October 15. The President, however, stated he was undecided about implementing another round of tariffs on $125 billion of mostly consumer goods from China set to take effect on December 15. If the Phase I deal is not signed next month, those deals likely will still go into place.

Labor Department Finalizes Overtime Rule

On September 24, the Department of Labor (DOL) announced its final overtime exemption rule issued under the Fair Labor Standards Act, increasing the minimum salary threshold for workers to qualify for overtime pay when working more than 40 hours per week. By increasing the threshold for employers subject to the federal standard to $35,568, up from the current threshold of $23,660 set in 2004, the agency claims 1.3 million more American workers will be eligible for overtime pay. The DOL’s final rule, which goes into effect on January 1, 2020, includes: Increasing the minimum salary required for an employee to qualify for exemption from the currently enforced level of $455 to $684 per week ($35,568 annually);  Increasing the total annual compensation requirement for “highly compensated employees” (HCE) from the currently enforced level of $100,000 to $107,432 per year;  Allowing employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid

PMA Members Testify Against Proposed Copper-Alloy Tariffs

The United States has been engaged in an ongoing dispute with the European Union (EU) regarding EU subsidies to Airbus. The U.S. has initiated a Section 301 investigation to enforce its rights in the dispute that could result in high tariffs on a range of EU imports. The United States Trade Representative (USTR) published a list of EU exports that could face a 100-percent tariff that included copper-based alloys from the European Union. Tariffs on these imported alloys would be devastating to many PMA members because there are no U.S. mills that can replace these products. PMA is taking a lead in opposing these tariffs. PMA President David Klotz and several PMA members, including Dan Kendall, president, ABC Metals; Charles Bernard, president, Eagle Metals; and Michael Jemison, chairman, Heyco Metals, testified in Washington, D.C., at an August 5 hearing about the proposed tariffs organized by the office of the USTR. In their testimonies, PMA members strongly urged the USTR not to imp

Trade War Averted or Trade War Delayed?

By: Josh Zive, Senior Principal, Policy Resolution Group at Bracewell At 8:30 p.m. EDT on Friday, June 7, President Trump announced that the tariffs scheduled to be placed on imports from Mexico on June 10 were being suspended when he tweeted that: “I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended. Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States. Details of the agreement will be released shortly by the State Department. Thank you!” This tweet ended the most recent chapter of tariff and immigration disputes with Mexico, but it has not ended the larger controversies surrounding trade policy with Mexico. In the wake of th

U.S. Terminates Steel and Aluminum Tariffs for Mexico and Canada

In what could be the beginning of the end of the Section 232 steel and aluminum tariffs, on May 17, the Trump Administration reached a deal to terminate the tariffs on Canada and Mexico. The president’s proclamation states that the United States “agreed on a range of measures” to prevent dumping of steel from either country and to avoid import surges. The measures were included to address the Trump Administration’s concerns that China was transshipping steel into the United States via Canada and Mexico. Importantly, the tariffs were not replaced with import quotas as some had feared. PMA’s team in Washington, D.C. was active in conveying to U.S. negotiators that quotas are even worse than tariffs for U.S. companies. This shows that our voices are being heard. The Coalition of American Metal Manufacturers and Users, of which PMA is a founding member, urged the Trump Administration to terminate the remaining Section 232 steel and aluminum tariffs on other trading partners as quickly as

U.S.-China Trade War Heats Up

A continued stalemate in trade negotiations has resulted in the U.S.-China trade war heating up this past week. On May 10, the United States raised the 10 percent duty to 25 percent on $200 billion worth of imports from China. Included in “List 3” of 5,745 products now subject to a 25 percent import tax are machinery and mechanical appliances such as hydraulic presses, drilling machines, forging or die-stamping machines; ships and boats such as canoes, sailboats and motorboats; live or frozen fish and crustaceans; sunscreen, makeup and shampoo; carpet and other floor coverings; wooden home furnishings; and even string Christmas lights. On May 13, the Chinese Foreign Ministry declared that China “will never succumb to external pressure” and announced $60 billion in retaliatory tariffs that will take effect on June 1. The retaliatory tariffs are based on the list of products released by China last September, and more than 5,000 products exported to China from the United States will f

March 2019 – Economics Observations

By: Dr. Ken Mayland ClearView Economics, LLC As an economist it is just too tempting to pass up commenting on the Green New Deal (GND). President Trump, in El Paso, said the plan "sounds like a high-school term paper that got a low mark." Perhaps for once, the President has understated the case.  Here is what the framers of the GND seek to achieve. Within 10 years of enactment, the nation is to be fully powered by renewable energy sources. This excludes nuclear energy. This would require the virtual elimination of commercial airlines and internal combustion vehicles. What is more, the plan would necessitate the retrofitting of residential, commercial and industrial structures. And did you catch the allusion to FDR’s New Deal? Well, the GND also is held to be a stimulus plan, as it attempts to address employment and inequality by guaranteeing jobs with “fair” pay, family and medical leave, paid vacations and retirement benefits. Furthermore, there would be universal h

Bipartisan Efforts Underway in D.C. on Workforce Development Policy

Washington is responding to calls from manufacturers for help in developing a skilled workforce. One of the few bipartisan bills signed into law by President Trump increased spending on job training programs—an effort strongly supported by PMA. Senator Lamar Alexander (R-TN), chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, recently stated his intent to renew the Higher Education Act (HEA) during this congressional term. Congress has not fully reauthorized HEA since 2008, making only minor changes when it extended the law in 2013. PMA is working with policymakers to expand HEA to treat credentials equally with two- and four-year degrees and allow Pell Grants for short-term skills training. Intending a bipartisan process, Alexander highlighted additional priorities for HEA renewal, including other provisions strongly supported by PMA such as a new accountability system measuring colleges’ employment, graduation, and loan-repayment rates. 

February 2019 – Economics Observations

By: Dr. Ken Mayland ClearView Economics, LLC I’ll make two observations about the government shutdown. First , what was the real cause of the shutdown?  The true cause of the shutdown was the fact that Congress failed to complete a budget – by September 30 – before the new fiscal year began.  Some areas of appropriations, like the defense budget, were in place as FY2019 began.  Other areas of the budget, however, encompassing the 800,000 government workers, were not nailed down as the new fiscal year started.  These areas were running on “automatic pilot,” in the form of a continuing resolution.  Time ran out on the authority to spend without a budget deal in place.  Obviously, one side wanted spending for “the wall” and the other side didn’t.  On $4.1 trillion of annual government spending outlays, $5.7 billion of spending on some fashion of a border barrier is inconsequential. My second observation regarding the government shutdown concerns its economic (i.e., GDP) impact.  Va

Congress Turns its Attention to Tariffs as New Reports Show Damage to U.S. Industry Sectors

With the shutdown temporarily ended, Congress turned its attention to other issues including trade. Two bills were introduced in Congress aimed at reining in the President’s power to impose Section 232 (national security) trade restrictions. The Bicameral Trade Authority Act , introduced by Senator Pat Toomey (R-PA), would give Congress more control over Section 232 investigations. The Coalition of American Metal Manufacturers and Users supports the legislation (PMA is a founding member of the Coalition) as the bill contains provisions that would allow Congress to review and terminate 232 tariffs already in place, namely the steel and aluminum tariffs. Senator Rob Portman (R-OH) reintroduced the Trade Security Act of 2019 , a bill that would move Section 232 national security investigations to the Department of Defense and provide Congress more oversight of Section 232 investigations. However, Senator Portman’s bill would only apply to future Section 232 investigations so the stee

New Year, New Congress

The 116th Congress convened on January 3, 2019 with a dynamic shift in power, with Democrats now holding a 235-199 majority in the House and electing Nancy Pelosi as Speaker, the first Member in over 60 years to regain the Speakership after losing a majority. In the Senate, Republicans increased their majority to 53-47.  Predictions of gridlock were unfortunately accurate, as even before Democrats took control in the House, a dispute over funding a border wall resulted in the failure to pass a government funding bill.  Large parts of the government continue to be shut down as of this writing.  Both sides continue to be entrenched in their positions.  Today (January 11) is a significant day as many federal workers will miss their first paycheck.  This includes a wide variety of employees, including, just to name a few, FBI Agents, customs officials, meat inspectors, TSA officers and Commerce Department officials who review steel tariff exclusions.  The result is that many important agen