The latest monthly round-up of updates to key free trade agreements and trade preference programmes involving the US, EU and Canada covers developments in May 2019. Trade agreements, rules of origin, tariffs and schedules are all covered in depth in the re:source by just-style strategic planning tool.
UNITED STATES
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US proposes Section 301 tariffs on apparel exports from China
On 13 May 2019, the Trump Administration said it was considering up to 25% Section 301 punitive tariffs on an additional US$300bn in imports from China. The proposal includes ALL apparel items in HS Chapters 61 and 62. The Office of the US Trade Representative (USTR) will host a hearing seeking input from the public on the proposal on 17 June 2019 before it finalises the product list and tariff rate. Leading US textile and apparel industry associations have called for their member companies to participate in the June hearing, which may last for as long as two weeks. In general, the US textile industry supports the proposal to impose punitive tariffs on Chinese apparel, whereas US fashion brands and retailers strongly oppose the plan.
EUROPEAN UNION
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataUS-EU Free Trade Agreement
EU Trade Commissioner Cecilia Malmstrom on 27 May 2019 told reporters “there is absolutely no possibility to include agriculture” in the proposed US-EU trade agreement. Malmstrom said the Europeans are ready to start negotiations on industrial tariffs with the US side.
On 15 April 2019, EU Member States gave the EU Trade Commission the green light to start formal trade negotiations with the US. However, the EU side demands the trade agreement strictly focuses on industrial goods tariff reduction, excluding agricultural products – which is at odds with the US negotiating objectives. The outlook for the trade talks and the agreement remains highly uncertain.
CANADA
US-Mexico-Canada Free Trade Agreement (USMCA)
On 29 May 2019, Canadian Prime Minister Justin Trudeau formally introduced legislation to the Canadian parliament to ratify the USMCA (also called NAFTA2.0). Prime Minister Trudeau also met with US vice president Mike Pence on 30 May 2019 to coordinate strategy on passing USMCA through the respective legislatures in the US and Canada.
Earlier in May 2019, the Trump administration agreed to restore exemptions Canada and Mexico had on US Section 232 tariffs of 25% on steel and 10% on aluminium. The Section 232 tariff was regarded as a significant political hurdle to ratify USMCA. According to vice president Pence, the Trump administration is making efforts to get USMCA approved by US Congress this summer.
