Washington Trade Daily

After many months of on-and-off negotiations, the United States and China have reached a “phase one” trade deal, President Trump announced this morning.
The tariffs Washington was set to impose on Chinese consumer products effective December 15 will not take effect, the President tweeted. But 25 percent tariffs already in place on other Chinese products will remain in place, with 7.5 percent tariffs on much of the remaining products, according to Mr. Trump.
Negotiations on a “phase two” deal will begin immediately, Mr. Trump said.
He defended the agreement, saying that Beijing has “agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.”
A statement from the US Trade Representative’s Office said that the agreement “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The Phase One agreement also includes a commitment by China that it will make substantial additional purchases of U.S. goods and services in the coming years.”
It also includes a strong dispute resolution system, USTR said.
In exchange, the Administration “has agreed to modify its Section 301 tariff actions in a significant way.” The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports, according to USTR.

House Speaker Nancy Pelosi (D-Calif) announced this morning that House Democrats and the Administration have agreed on changes to the US-Mexico-Canada trade agreement, paving the way for a vote.
House Ways and Means Committee Chairman Richard Neal (D-Mass) called the revised USMCA a “template” for future US trade deals, noting that it has the support of organized labor.
“It’s an agreement that Democrats shaped,” he said.
The implementing legislation for the USMCA could be on the House floor as soon as next week, according to Mr. Neal.
The “fast track” Trade Promotion Authority process gives Congress a total of 90 days to consider a trade bill, but lawmakers have the ability to greatly accelerate that timeline.
Chief trade negotiators for the USMCA from all three countries will meet today at noon in Mexico to sign off on the changes, according to Mexican Undersecretary for North America Jesus Seade. US Trade Representative Robert Lighthizer, who has been working with House Democrats for months to come up with language that would gain Democratic votes, Presidential advisor and son-in-law Jared Kushner and Canadian Deputy Prime Minister Chrystia Freeland have converged in Mexico for a meeting with Mexican officials to give final approval to the changes.
Agreement came after intense negotiations over the weekend between Mr. Lighthizer, House Democratic leaders and the Canadian and Mexico negotiators. Both Mr. Lighthizer and Speaker Pelosi also were keen to have organized labor on board.
AFL-CIO President Richard Trumka announced his support this morning, saying that”make no mistake, we demanded a trade deal that benefits workers and fought every single day to negotiate that deal; and now we have secured an agreement that working people can proudly support.”

Facebook followers -- We want to hear from you. What impact -- if any -- do you think impeachment proceedings against President Trump will have on prospects for a House vote on the USMCA?

House Democrats working group on USMCA releases report to Speaker Pelosi on status of negotiations with USTR Lighthizer following final meeting before August break.

Neal Statement on Trade Working Group Progress and Report to Speaker Pelosi WASHINGTON, DC – Today, Ways and Means Committee Chairman Richard E. Neal (D-MA) released the following statement after the House Democrats’ trade working group met with U.S. Trade Representative (USTR) Robert E. Lighthizer:

President Trump says he is "starting the paperwork" today to impose 25 percent tariffs on an additional $325 billion worth of Chinese products in addition to 25 percent tariffs on $200 billion that takes effect at midnight, but still sees possible trade deal this week.

He also insisted that the tariffs are paid by the Chinese, arguing that those who say US businesses and consumers pay are wrong.

Someone didn't take Econ 101.