| | | | |  | | By Doug Palmer | | | With help from Ari Hawkins
| | | — U.S. Trade Representative Katherine Tai is definitely not working up a sweat over the European Union's charge that a new electric vehicle tax credit appears to violate World Trade Organization rules. — There is no sign from the Biden administration that it will challenge Canada's plan to ban handgun imports beginning Aug. 19. — Starting today, Sarah Ellerman is USTR chief negotiator for talks on the Indo-Pacific Economic Framework, following Dawn Shackleford's decision to take a new job at the Commerce Department. It's Monday, Aug. 15. Welcome to Morning Trade. Today is a good day to plant a Scotch pine tree nursery in your backyard, according to my 1974 Popular Science Homeowners Almanac. Place them in rows 12 inches apart, with a 12-inch space between each tree in the rows. Nurture them for two or three years until they are big enough to transplant. With luck and perseverance, you'll never have to buy another Christmas tree again. Send us your trade news: gbade@politico.com, ahawkins@politico.com and dpalmer@politico.com.
| | | | A message from Save American Solar Jobs: Despite President Biden's actions to prevent new tariffs on solar components for two years, the Commerce Department is continuing to consider solar tariffs that could be applied after the tariff moratorium has expired. If not stopped, these tariffs would bring back a cloud of uncertainty over U.S. solar manufacturing, undermining efforts by the President and Congress to promote clean energy jobs and address climate change.
Commerce Secretary Raimondo: Please Reject Meritless and Damaging Solar Tariffs. | | | 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.
| | | USTR TAKES EV CRITICISM EZ: The House approved the tax credit on Friday as part of a huge tax, climate and health care package now headed to President Joe Biden's desk, despite the EU's plea that lawmaker makers remove "discriminatory" elements from the bill. South Korea has also complained about how the provision is structured. But that did not sway lawmakers or administration officials who welcomed approval of the Inflation Reduction Act as a big win in the battle to deal with climate change. "The Biden Administration is committed to boosting U.S. EV manufacturing, infrastructure, and innovation that will help us meet our clean energy goals, reduce costs and create jobs," USTR spokesperson Adam Hodge said in response to the EU's criticism. "This bill provides strong incentives to reduce our dependence on China for the critical materials that will power this key industry, and we look forward to working with allies and partners to advance our climate goals, strengthen and diversify our supply chains, and address our shared concerns with China's non-market policies and practices," he added. In a separate statement, Tai said congressional approval of the Inflation Reduction Act will "create good-paying jobs and further advance U.S. leadership in the development of cutting-edge clean energy technology." Canadian Trade Minister Mary Ng also welcomed House passage of the legislation, which she said "recognizes the Canada-United States integrated supply chain, by giving tax incentives for the purchase of electric vehicles made in North America." Mexico also cheered the legislation. "By considering the manufacture of batteries and electric vehicles in North America, it encourages greater regional integration and accelerates the adoption of these technologies," a Mexican government official said. Ambassadors from the EU, Canada, Mexico, Japan and South Korea all signed a letter last year objecting to an earlier version of the tax credit.
| | | | The Women Rule series brings together rising stars, accomplished professionals, and women at the pinnacle of their careers to inform, empower and connect women across diverse sectors and career levels. Attendance to our quarterly in-person POLITICO Women Rule meetings, is by invitation-only. Join our interest list and learn more here. | | | | | USTR UNLIKELY TO CHALLENGE CANADA'S HANDGUN IMPORT BAN: Canada's impending import restriction, which the Trudeau government hopes will reduce gun availability, will shut down about $20-$25 million worth of annual U.S. exports, according to U.S. government trade statistics. Canada was the third-largest market for U.S. handgun exports last year behind Thailand and Saudi Arabia, which imported $42 million and $20 million, respectively, from the United States. Total U.S. revolver and pistol exports in 2021 were about $153 million. Industry miffed: Mark Oliva, a spokesperson for the National Shooting Sports Foundation, said the firearms industry group was looking into the Trudeau administration's "unilateral push to ban the import of handguns," mainly by working with its counterparts representing the Canadian firearm industry to address the matter. "NSSF holds little confidence that the Biden administration would act in the interest of the firearm industry," Oliva continued in an email. "This president labeled gun manufacturers as 'the enemy' during the Democratic primary in his run for office and has since used every opportunity to vilify and marginalize this Constitutionally-protected industry." A theoretical defense for an unlikely case: Still, if the United States were to challenge the ban as a violation of the U.S.-Mexico-Canada Agreement, Canada could invoke Article 32.2 of that pact as a defense. That "essential security" provision allows a USMCA member "to apply measures that it considers necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests." Whether the handgun import ban would fall in that category is a matter of debate. But it's unlikely a USMCA dispute settlement panel will ever have to decide the issue, at least during the Biden administration, one trade attorney said. USTR did not respond to a request for comment on Canada's handgun import ban. CHANGING OF THE IPEF GUARD: Longtime USTR official Dawn Shackleford is leaving the agency to take a job at the Commerce Department as executive director for trade agreements, policy and negotiations, beginning at the end of the month. Shackleford most recently served as assistant USTR for Southeast Asia and the Pacific and was the lead USTR negotiator for talks on the proposed Indo-Pacific Economic Framework agreement. Shackleford joined the USTR in 2004, according to her LinkedIn page , and has worked in a number of capacities at the agency. She has spent much of her career working on World Trade Organization issues, along with a stint focused on India. Ellerman in: Starting today, Sarah Ellerman will be acting AUSTR for Southeast Asia and the Pacific and will take over the chief IPEF negotiator role. She previously was Shackleford's deputy. Ellerman joined USTR in 2014, her LinkedIn page shows . Before that, she held various jobs in the Commerce Department's trade division and at the U.S. embassy in Beijing. TAI TO HIT IOWA WITH VILSACK, REP. AXNE: Tai will travel to Des Moines, Iowa, on Thursday for events with Agriculture Secretary Tom Vilsack and Rep. Cindy Axne (D-Iowa), who faces a tough race for reelection this year. USDA SEES RECORD RUSSIAN WHEAT CROP: The U.S. Agriculture Department on Friday boosted its estimate of Russian wheat production to a record 88 million metric tons this year because of higher harvested area and yields. USDA also forecast Russian farmers to export 42 million metric tons of wheat in the 2022-23 marketing year, up from its July forecast of 40 million metric tons. That would be sharply higher than the 33 million tons Russia exported in 2021-22. Although Russia's war has had a devastating impact on Ukraine's wheat production, USDA kept its forecast of Ukraine's wheat output this year unchanged at 19.5 million metric tons. But that's down from the 33 million metric tons it produced last year. USDA raised its estimate of Ukraine's 2022-23 wheat exports to 11 million metric tons, from 10 million previously, following the recent signing of a Russia-Ukraine deal to free up grain trapped in Black Sea ports. Last year, Ukraine exported 18.8 million metric tons of wheat. Better Ukraine corn harvest: USDA said it now expects Ukraine to produce 30 million metric tons of corn this year, up from its previous forecast of 25 million. It also raised its forecast of Ukraine's corn exports to 12.5 million metric tons, from 9 million previously. Last year, Ukraine produced more than 42 million metric tons of corn and exported 24.5 million, USDA said.
| | | | INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY. | | | | | GSP EXPIRATION COSTS ADD UP: American importers have now paid at least $1.7 billion in extra tariffs because of the expiration of a trade preference program that waives duties on thousands of goods from developing countries. The Generalized System of Preferences, or GSP program, was in place for almost half a century before it expired at the end of 2020. Both the House and Senate initially included GSP renewal in their respective Chips bills, but dropped it and other trade provisions as Congress raced to finalize the legislation before the August recess. The top five GSP beneficiary countries included Indonesia, Thailand, Cambodia, Brazil and the Philippines, according to data from the Congressional Research Service. June was the costliest month on record for companies in seven states including Georgia, Iowa, Maine, New Mexico, Virginia and Washington. Importers in 40 states and Puerto Rico have paid at least $1 million in additional duties, data from the Coalition for GSP shows. "By raising costs for American companies, those extra tariffs make China more competitive, increase inflationary pressures in the United States, and reduce GSP's potential development impacts," the business coalition said in a blog post. The GSP received overwhelming support the last time a vote was held in the House in 2017, with a motion to extend the provision passing by a margin of 400-2.
| | | | A message from Save American Solar Jobs:   | | | | | | — A White House official said the U.S. will continue to deepen economic relations with Taiwan, despite objections from China, POLITICO reports. — Some of China's largest state-owned firms will voluntarily delist from the New York Stock Exchange in weeks to come, the latest fallout amid the nation's standoff with Beijing over financial auditing requirements, POLITICO reports. — China is taking steps to accelerate imports of Brazilian corn, bringing on a new supplier of the grain at a time when the war in Ukraine has disrupted trade and tensions with the U.S. are soaring, Bloomberg reports. — China has intensified trade relations with Mongolia, an important link in land-based trade with Russia, The South China Morning Post reports. — Xi Jinping will visit Saudi Arabia this week, The Guardian reports. — Brazil's economy minister has renewed a spat with France over deforestation in the Amazon, and made his point using the F word, AFP reports. — The Brave Commander, a ship chartered by the United Nations, set sail on Sunday to transport Ukrainian wheat to food insecure countries, POLITICO reports. — Turkish exports to Russia hit an eight-year high of $2.91 billion in the first half of 2022, according to state statistics service TurkStat, Bloomberg reports. — The Russian central bank forecasted that the nation's economy will shrink by between 4 percent and 6 percent this year amid pressure from sanctions, POLITICO reports. — Flyers will face more delays and cancellations as a result of extreme weather events from climate change in the coming years, POLITICO reports.
| | | | A message from Save American Solar Jobs: Commerce Secretary Raimondo: Please Reject Meritless and Damaging Solar Tariffs
In June, President Biden effectively lifted a cloud of uncertainty over the U.S. solar industry by using his executive authority to preserve existing trade policy and prevent any new tariffs on solar panel components from being implemented for two years. Now Congress is on the verge of passing a groundbreaking package of investments and tax incentives that would dramatically expand domestic solar manufacturing going forward.
Yet, the U.S. Commerce Department is continuing to consider solar tariffs that could be implemented after the President's tariff moratorium has expired. If not stopped, these tariffs would bring back that cloud of uncertainty over U.S. solar manufacturing, undermining efforts by the President and Congress to promote clean energy jobs and address climate change.
Save American Solar Jobs urges Commerce Secretary Raimondo to reject these meritless and damaging solar tariffs once and for all. | | | THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and soverly@politico.com. Follow us @POLITICOPro and @Morning_Trade. | | | | Follow us on Twitter | | | | Follow us | | | | |
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