CHINA IMPORT DECLINE BROAD-BASED: A closer look at last week’s Commerce Department trade data shows the 26 percent drop in U.S. goods imports from China in the first four months of 2023 was broad-based. Imports from China declined in 86 of 98 categories in January through April, compared to the same period last year, according to the Census Bureau’s online data tool. The top five categories — electrical machinery and parts; nuclear energy equipment; toys, games and sporting goods; furniture and lighting fixtures; and plastics — slid from nearly $110 billion in combined imports in January-April 2022 to $84 billion in January-April 2023. Those five categories accounted for more than half of total imports in both periods. Twelve categories showed an increase in imports from China in the first four months of 2023, but none of those were among the top 30 import categories last year. One small category running against the downward tide is “animal, vegetable or microbial fats and oils,” where imports from China were up more than 575 percent at $154 million. Who would have guessed? In comparison: U.S. imports from all countries, including China, in the first four months of 2023 totaled about $1 trillion. That’s only about 5 percent less than in the same period last year. So, imports from China are falling faster than from most other sources. China’s share of U.S. goods imports was 13.3 percent in January through April, compared to 16.5 percent in 2022 and the peak level of 21.6 percent in 2017. As noted above, this year’s share for China could be lowest since 2004, when it was 13.4 percent. So, which regions gained as China lost market share? There was no single big winner, but Europe and the Americas region collectively saw increased shipments to the United States. Imports from the rest of Asia also fell only 6 percent in the first four months of 2023, compared to the 26 percent plunge for China. And amid that decline from Asia, some countries — such as India and Singapore — increased their share of the U.S. import market. IPEF premium?: What, you might be thinking, about the 13 countries that are part of the proposed Indo-Pacific Economic Framework with the United States? Well, combined imports from those countries fell only 4 percent in the first four months. They totaled $215 billion during that period, compared to imports from China, which totaled $132 billion. In fact, the trade data shows the group has already benefited from U.S.-China trade frictions, even though negotiations on IPEF are far from complete. U.S. imports from the group surpassed imports from China in 2019 and have increased their lead every year since. WAYS AND MEANS TO VOTE FIRST ON TAIWAN PACT: USTR launched trade negotiations with Taiwan last year, and concluded an initial agreement covering relatively non-controversial areas such as trade facilitation and good regulatory practices in May. However, the White House did not intend to submit the agreement to Congress for a vote, asserting it has sufficient authority to negotiate and implement the pact on its own. That is the same stance it has taken in regards to the proposed Indo-Pacific Economic Framework agreement with 13 other countries, despite protests from Congress, which says it has the right to vote on trade pacts under Article 1, Section 8 of the U.S. Constitution. Against that backdrop, bipartisan leaders of the House Ways and Means and Senate Finance committees announced legislation Friday containing two important components: First, it would approve the May deal struck with Taiwan. Secondly, it would impose new congressional consultation and transparency requirements on the administration for negotiations with Taiwan on other potential agreements covering agricultural, digital trade, labor, environment and other areas laid out in a negotiating mandate last year. The House Ways and Means Committee plans to vote Tuesday on the legislation as part of a markup of tax legislation. “(I)t is imperative that we act now in a bipartisan manner to support this early agreement with Taiwan, require that Congress be consulted on and approve any future trade steps with Taiwan, and ensure any such future agreements like this are only established through robust Congressional consultation and a vote of approval,” Ways and Means Chair Jason Smith (R-Mo.) said in a joint statement with other congressional trade leaders. My Morning Trade colleague Gavin Bade broke the news Friday and POLITICO Pros can read his report here. MANCHIN SLAMS EV TAX CREDIT GUIDANCE: In comments submitted to the Treasury Department this morning, Sen. Joe Manchin (D-W.Va.) blasted the Biden administration’s interpretation of the domestic sourcing requirements for electric vehicle tax credits in the Inflation Reduction Act. Manchin — who has previously vowed to go to court over Treasury’s guidance for Section 30D of IRA — wrote that the proposed rule “deviates from the will of Congress” in at least three respects. Those are: Treasury’s creation of a “50 percent of value added test” to determine whether a vehicle meets the critical minerals sourcing requirement in the law, its “constituent materials” definition that eases some requirements for sourcing battery minerals, and its broad interpretation of free trade agreement that allows countries like Japan to qualify for the credit if they ink a critical minerals pact with the U.S. Manchin had previously expressed support for the Japan agreement, along with similar trade pacts the Biden administration is negotiating with the EU and U.K. The comment period for the proposed rule, Reg. 120080-22, closes Friday. TAI ON TRIPLE TAP THIS WEEK: U.S. Trade Representative Katherine Tai, just back from a trip to Europe, has at least three public events this week to talk about the Biden administration’s trade agenda, beginning with a conference this morning sponsored by the Foreign Policy for America Foundation. Then, she’s up twice on Thursday. First, for a 20-minute on-stage interview at POLITICO’s Global Tech Summit in London. We assume that is taking place by remote video link since she’s also scheduled to speak at the National Press Club in Washington early that afternoon at an event hosted by the Open Markets Institute on the future of U.S. trade policy. GREEN TRADE TV WEEK: You can binge all your favorite environmental trade topics over the next four days by visiting the World Trade Organization’s website. The approximately 20 discussions during the WTO’s fourth annual “Trade and Environment Week” include a session Tuesday organized by China on the role of trade in the clean energy transition. Later on Tuesday, the United States is hosting a discussion on how “remanufacturing” can help address climate change. The EU hosts a session Wednesday on its carbon border adjustment mechanism. Other WTO members, such as India and Australia, also get in the act with discussions on sustainable forest management and green hydrogen. TAI’S FRIENDSHORING FIELD TRIP TO LATVIA: USTR Katherine Tai hopped over to Riga after the Organization for Economic Cooperation and Development meeting in Paris to drive home the friendshoring message, tying together defense and “economic security.” “Given the challenges that we are facing right now in the world economy — I named the pandemic, the Russian war in Ukraine, but also the climate crisis, the digital transformation of our economies and our societies — … our focus is to work especially closely with those with whom we are the most like-minded,” Tai said at a press conference on Friday alongside Latvia’s President-elect Edgars Rinkēvičs. Security above all: Rinkēvičs really drove home the message on the importance of U.S. defense cooperation — in a clear sign of the Baltic country’s apprehension about its neighbor Russia, which has only grown since Moscow invaded Ukraine. “We have excellent cooperation in defense and security. And I am grateful for all the support over the course of the last couple of years [that] has been provided to Latvia, [especially now]. We want to see that economic cooperation is part of overall security cooperation,” Latvia’s president-elect said. Oh so timely: Brussels is drawing up plans to bring more security into its economic policy, with the European Commission set to unveil its economic security strategy on June 20. If you haven’t read it yet, here's a scene-setter on how Commission President Ursula von der Leyen’s plan might ruffle some free-trade feathers. ON A SADDER NOTE: Tai mourned the death last week of AFL-CIO chief economist Bill Spriggs, who died of a stroke at the age of 68. Spriggs was the first Black to hold the top economic position at the nation’s largest labor group and also served as an assistant secretary of labor during the Obama administration. “Bill left an indelible mark on trade policy,” Tai said in a statement. “His groundbreaking research on the impact of trade on workers, including and especially Black and Brown workers, continues to drive our new story on trade. … Simply said, Bill embodied our worker-centered trade policy.”
| 
No comments:
Post a Comment