News: Business groups brace for Trump tariffs

Monday, October 21, 2024

Business groups brace for Trump tariffs

Oct 21, 2024

With help from Doug Palmer

US Trade Representative Robert Lighthizer (left) speaks as US President Donald Trump and others listen.

Republican nominee Donald Trump is intensifying his tariff proposals in the weeks leading up to the U.S. election. | Brendan Smialowski/AFP via Getty Images

QUICK FIX

— Officials from major business associations are calling on Congress to implement new guardrails on a president’s ability to hike tariffs.

— The families of fentanyl victims have petitioned the office of the U.S. Trade Representative to investigate China’s role in exporting the deadly opioid to the United States.

— USTR Katherine Tai is Brazil-bound this week for the annual G-20 trade and investment ministers meeting.

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Driving the day

GUARDRAILS WANTED: Representatives from a broad range of technology firms, manufacturers, retailers and agricultural producers are pressing Congress to pursue safeguards that would rein in a president’s ability to impose new tariffs.

The push comes as GOP nominee Donald Trump escalates his proposals to enact sweeping tariffs if elected next month. Those plans have been criticized by economists across the political spectrum, who say the measures would raise costs for average Americans.

“These are active, real-time discussions, because we don't know who's going to win, but we do have to prepare,” Ed Brzytwa, vice president of international trade at the Consumer Technology Association, told Morning Trade.

“We’re reaching out to anyone who will possibly listen to us, Republicans in particular that have already expressed public concern about the sweeping, broad tariffs,” Brzytwa said.

One step back: The former president has called to impose a universal tariff of up to 20 percent, with higher restrictions on China and Mexico.

He went even further last week: "If I'm going to be president of this country I'm going to put a 100, 200, 2,000 percent tariff,” Trump said at the Economic Club of Chicago, referring to tariffs on foreign cars.

Who’s who: The groups pushing lawmakers to take action includes CTA, which represents companies in the technology sector, and members of the Tariff Reform Coalition, which covers U.S. manufacturers, exporters, retailers, agricultural and food producers, and other supply chain stakeholders, led by the National Foreign Trade Council.

Trump hasn’t specified exactly how he would implement the wide-ranging tariff proposals, but representatives for major industry groups are vying to widen support for a range of legislation that would restrict the president’s unilateral trade authority.

For instance, Brzytwa pointed to a measure introduced by Sen. Rand Paul (R-Ky.) known as the No Taxation Without Representation Act, which would curb a president’s ability to implement tariffs without approval from Congress.

Representatives are also pushing to shore up support for the Global Trade Accountability Act, which would subject presidential tariff actions to congressional approval. The legislation was first introduced by Sen. Mike Lee (R-Utah) in 2017 in response to then-President Trump’s threats to impose tariffs on Mexico and China.

The groups are also backing the Article One Act, which would end a presidential declaration of a national emergency after 30 days — unless Congress votes to extend it. (The International Emergency Economic Powers Act gives the president sweeping authority to control economic transactions after declaring an emergency).

Keep in mind: Robert Lighthizer, Trump’s USTR during his first term and a contender for a cabinet position should Trump win in November, has argued that a president has "clear authority" to impose tariffs without needing congressional approval.

REGULATORY REVIEW

FIGHTING FENTANYL: The families of victims of fentanyl overdoses filed a petition last week with USTR requesting a probe into the Chinese government’s supposed role in the export of fentanyl into the United States, according to a statement from Wiley Rein law firm.

Filed under Section 301 of the Trade Act of 1974, the petitioners are pushing for countermeasures from USTR to crack down on China. That could include tariffs and import bans on $50 billion worth of merchandise, excluding Chinese shipments from duty-free entry under the de minimis trade exception and new restrictions on outbound investment, according to a fact sheet.

The fact sheet also notes that if tariff revenue is collected, that money should go directly to U.S. states to “offset their costs associated with combating fentanyl.”

“We are asking USTR to use its authority to press China to act now. Every day, 200 lives are lost — these are 200 American workers,” Wiley National Security practice chair Nazak Nikakhtar told Morning Trade.

Sam Michel, a spokesperson for USTR acknowledged receipt and said “we are reviewing the petition at this time.” The agency has 45 days to decide whether to proceed with an investigation, per Wiley’s statement, posted Friday.

China’s response: Liu Pengyu, spokesperson at the Chinese embassy in Washington, denied the allegations in a statement to Morning Trade and blamed the United States for inaction.

“China stands ready to conduct counternarcotics cooperation with the U.S. on the basis of mutual respect, equality and mutual benefit. Let me stress that the root cause of the overdose lies in the U.S. itself, which calls for more effective measures from the U.S. government,” Liu said.

U.S.-CHINA PANEL DELAY: As of Friday, the U.S. and China still had not agreed on a set of panelists to hear Beijing's complaints about provisions of the U.S. Inflation Reduction Act that it says violates WTO non-discrimination rules.

If the impasse continues, either China or the U.S. could ask Director-General Ngozi Okonjo-Iweala to make that decision. But sometimes discussions over panelists can continue for months before either side takes that step.

Around the World

TAI HEADED TO BRAZIL: USTR Katherine Tai is headed to Brazil for the annual G-20 trade and investment ministers meeting on Thursday between leading developed and developing countries. The meeting brings together some of the U.S.’ biggest trading partners, including China, Canada, Mexico, Japan, South Korea, India and the EU. The African Union last year became the newest member.

This year’s host, Brazil, has laid out an agenda focused on fighting hunger, poverty and inequality, boosting “the three dimensions of sustainable development” (economic, social and environmental) and reforming global governance.

Chief Agricultural Negotiator Doug McKalip will travel with Tai to Brazil and take part Friday in a discussion on inclusive and sustainable growth hosted by APEC business groups. No further details on Tai’s and McKalip’s meetings were available.

A separate G-20 leaders meeting will take place in Rio de Janeiro on Nov. 18 and 19, after the U.S. presidential election. That — along with the APEC summit in Peru the previous week — could be one of President Joe Biden’s last foreign trips before leaving office.

TRADE OVERNIGHT

— EU’s game plan for Trump trade war: ‘Hit back fast and hard,’ POLITICO Pro reports.

— Chinese drone maker DJI sues Pentagon over ‘military’ designation, per POLITICO Pro.

— Lawmakers urge DOJ, DOD probes into McKinsey over China ties, per POLITICO Pro.

— Who could be in Harris’ Cabinet? Here are leading contenders, per POLITICO.

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 ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.