Leaders Meet to Discuss Trade Agreements, Tariffs
Trade ministers from the United States, Canada and Mexico met for two days this week for the first time to review the U.S.-Mexico-Canada Agreement, which took effect in July 2020.
U.S. Trade Representative Katherine Tai, Mexican Economy Minister Tatiana Clouthier and Canadian Trade Minister Mary Ng met virtually this week and focused on topics such as fighting climate change and cracking down on the import of goods that are made with forced labor, according to a report from Reuters.
Topics discussed included Canada’s proposed digital tax as well as Ottawa’s allocation of dairy quotes; Canada’s concerns about U.S. lumber tariffs as well as the “Buy American” restrictions on infrastructure and public projects; and the interpretive differences between the countries on the automotive content rules as well as a review of transportation rules.
The statement put out, however, focused on a goal to reach out to underrepresented groups, with a plan to meet with small-business owners in October in San Antonio.
"This was primarily an opportunity to take stock of the new agreement, think about how it works, and ... lay out the priorities of the three countries," said a senior U.S. trade official, adding that further high-level meetings would likely take place in coming years.
In Addition to the Meetings
Late last week, the U.S. Department of Commerce issued a preliminary determination in its second review of the softwood lumber imports from Canada and issued a combined anti-subsidy and anti-dumping duty rate of 18.32%. This is an increase from 8.99%.
The U.S. Lumber Coalition hailed the move.
“A level playing field is a critical element for continued investment and growth for U.S. lumber manufacturing to meet strong building demand to build more American homes,” said Jason Brochu, U.S. Lumber Coalition Co-Chair and Co-President of Pleasant River Lumber Company. “The U.S. Lumber Coalition applauds the Commerce Department’s continued commitment to strongly enforce the U.S. trade laws against subsidized and unfairly traded Canadian lumber imports.”
The National Association of Home Builders, meanwhile, said that the decision shows that the government simply does not care about housing affordability.
“At a time when soaring lumber prices have added nearly $36,000 to the price of a new home and priced millions of middle class households out of the housing market, the Biden administration’s preliminary finding on Friday to double the tariffs on Canadian lumber shipments into the U.S. shows the White House does not care about the plight of American home buyers and renters who have been forced to pay much higher costs for housing,” the NAHB said in a statement.
“This action clearly shows the White House is disingenuous when it claims the nation’s housing affordability crisis must be an important priority. This move certainly demonstrates a lack of courage to stand up to the U.S. lumber lobby that is already reaping record profits off the backs of hardworking American families.”
Meanwhile, early last week, Tai, along with U.S. Secretary of Commerce Gina M. Raimondo, met with European Commission Executive Vice President Valdis Dombrovskis to start discussions to address the global steel and aluminum excess capacity.
The leaders reportedly acknowledged the need for solutions that preserve critical industries and agreed to chart a path that ends the WTO disputes following the U.S. application of tariffs on imports from the EU under section 232.
The U.S. and EU reportedly agreed to hold other countries accountable and are beginning to work out resolutions.
Materials and Tariffs Background
At the beginning of March, Reps. Jim Costa (D-California) and Jodey Arrington (R-Texas) sent a letter to President Joe Biden and the Department of Justice bringing attention to the building materials prices and supply shortages, urging the administration take action.
The lawmakers used data provide by the NAHB and particularly pointed to the lumber shortage and its impact on the prices of new single-family homes.
“NAHB’s top priority is to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price,” the association said in its reporting of the letter. “NAHB is urging the Commerce Department to investigate why lumber production—particularly sawmill output—remains at such low levels during a period of prolonged high demand.”
Costa and Arrington reportedly mirrored and relayed those concerns in their letter.
The NAHB also noted that the same lawmakers sent a similar letter to former President Donald J. Trump last October.
At the beginning of this year, the “Buy American” policies initially set forth by former President Donald J. Trump got a boost as President Joe Biden signed an executive order aiming at increasing government purchases of American-made products.
During comments surrounding the order, Biden mentioned his Build Back Better Recovery Plan, and noted that the Buy American order would help in the effort to rebuild infrastructure.
“Here’s what else we’re going to be doing. Under the Build Back Better Recovery Plan, we’ll invest hundreds of billions of dollars in buying American products and materials to modernize our infrastructure, and our competitive strength will increase in a competitive world,” Biden said.
“That means millions of good-paying jobs, using American-made steel and technology, to rebuild our roads, our bridges, our ports, and to make them more climate resilient, as well as making them able to move faster and cheaper and cleaner to transport American-made goods across the country and around the world, making us more competitive. It also means replenishing our stockpiles to enhance our national security.”
The new order mainly reinforces the government procurement and procedure rules, making it harder for federal agencies to purchase imported products or to get an exception to the Buy American rule. In his comments, Biden noted that in 2018 alone, the Defense Department spent $3 billion on foreign construction contracts, “leaving American steel and iron out in the cold.”
Around the same time, a group of several domestic steel industry associations wrote to President Joe Biden, urging him to keep steel tariffs and quotas that were set in place by the Trump administration.
The letter was signed by the American Iron and Steel Institute, the United Steelworkers, the Steel Manufacturers Association, the Committee on Pipe and Imports, and the American Institute of Steel Construction.
The letter referenced the tariff and quota program that was established in 2018 as a means to allow the U.S. to “restart idled mills, rehire laid-off workers and begin investing tens of billions of dollars in new and upgraded plants.”
However, the letter notes, those plans suffered a significant setback because of the COVID-19 pandemic. The organizations add that continuing the tariffs and quotes is “essential to ensuring the viability of the domestic steel industry in the face of this massive and growing excess steel capacity.”
