US ECONOMICS

US-CHINA TRADE ISSUES

THE WASHINGTON POST. 04/01/2018. Business. Trade war escalates as China says it will impose tariffs on 128 U.S. exports, including pork and fruit. China imposes tariffs on U.S. goods
By Damian Paletta, is White House economic policy reporter for The Washington Post. Before joining The Post, he covered the White House for the Wall Street Journal.

The Chinese government plans to immediately impose tariffs on 128 U.S. products, including pork and certain fruits, a direct response to President Trump’s recent moves to pursue numerous trade restrictions against Beijing.

If U.S. goods become more expensive in China, Chinese buyers could opt to purchase products from Europe, South America or elsewhere, though White House officials have routinely discounted the likelihood of this.

Beijing’s move could force Trump to decide whether to follow through on expansive trade restrictions he had hoped would crack down on China even if Beijing is now threatening to harm U.S. companies that rely on Asian markets for buyers.

A Twitter post from the “People’s Daily,” an English-language news organization controlled by the Chinese government, said Sunday that “China imposes tariffs on 128 items of imports from the U.S. including pork and fruit products starting Monday as a countermeasure in response to a previous U.S. move to slap tariffs on steel and aluminum imports: Ministry of Finance.”

The Chinese government said the tariffs would effectively serve as retaliation for restrictions Trump announced last month.

In early March, Trump said he planned to apply steep tariffs on steel and aluminum imports. Since then, he has exempted numerous countries, but he has not waived the impact on China.

And in late March, Trump took additional steps toward imposing tariffs on $60 billion in Chinese goods and limiting China’s ability to invest in the U.S. technology industry. He has alleged that the U.S. government had been too complacent in allowing Chinese firms to steal U.S. intellectual property and abuse trade rules. He has accused China of trade practices that led to the closure of 60,000 factories and the loss of 6 million jobs.

His new, unilateral trade steps, though, shocked many U.S. businesses and foreign leaders, particularly because Trump had taken a more cautious approach in his first year, seeming to dial back some of the populist trade rhetoric he made during the 2016 campaign. Beijing promised to respond quickly, however.

In a statement from the Chinese Ministry of Finance, the government said the new tariffs “caused serious damage to our interests.”

Trump has for years accused the Chinese government of unfair trade practices, which he says put U.S. companies at a disadvantage. Many other foreign leaders have agreed that China unfairly subsidizes its businesses and has at times devalued its currency to boost exports, but most have favored a multi-national approach to apply pressure on Beijing.

Trump has expressed disgust for multilateral trade decisions and has favored more adversarial action. For his first year in office, a number of key advisers — including National Economic Council Director Gary Cohn and Secretary of State Rex Tillerson — had tried to persuade Trump to be careful before following through on some of his trade threats, but both men have recently departed, and now Trump is surrounded by advisers who support some of these protectionist decisions.

A number of U.S. business groups have warned that these tariffs could backfire because they could make it harder for American companies to sell goods overseas if other nations retaliate, but Trump and Commerce Secretary Wilbur Ross have expressed skepticism that the impact of these moves would be substantial.

China exported $505 billion in goods to the U.S., and U.S. companies exported $135 billion in goods to China in 2017. Trump says the difference between these two numbers is too large and should be eliminated or at least greatly diminished. His precise approach with Beijing is hard to pinpoint because he has occasionally praised Chinese leader Xi Jinping, while also suggesting that Xi’s administration will not offer concessions that he believes are necessary.

A number of U.S. agriculture firms have warned they could be caught in the middle of a trade war, particularly if Trump follows through on threats against China and Mexico.

The National Pork Producers Council said in late March that its members exported $1.1 billion in pork to China last year, making it the third-largest market.

In addition to pork, the new tariffs from the Chinese government will include U.S. exports of apples, oranges, almonds, pineapples, grapes, watermelons, cranberries, strawberries, raspberries, cherries, and a host of other items.

Trump’s trade approach has been inconsistent, making it difficult for allies and foreign leaders to know what he plans to do. Trump has said his trade threats are meant as a way of negotiating. On Sunday – in Twitter posts – he threatened to withdraw from the North American Free Trade Agreement if Mexico doesn’t do more to stop immigrants from entering the United States.

Those comments caught many by surprise because U.S. Trade Representative Robert Lighthizer has spent months trying to renegotiate NAFTA with Canada and Mexico, and they are hoping to make progress later this year.

China, though, has always been the biggest trade target for Trump. It also appears to be the first country to retaliate to his trade threats, putting pressure on leaders in Washington and Beijing to anticipate each other’s next moves quickly.

The stock market rose sharply during Trump’s first year in office, but it has slid back more than 10 percent since late January amid concerns that Trump’s trade threats could roil world markets. His senior advisers, though, say Trump’s trade approach will help U.S. workers by creating more jobs and boosting U.S. exports abroad.

THE NEW YORK TIMES. APRIL 1, 2018. ASIA PACIFIC. Defying Trump, China Slaps Tariffs on 128 U.S. Products
By CHRIS BUCKLEY

BEIJING — The Chinese government hit back Monday at President Trump’s tariffs on steel and aluminum by acting on a threat to put tariffs as high as 25 percent on imports of 128 American-made products, including pork and seamless steel pipes.

The Chinese Ministry of Commerce indicated that the tariffs, which it first publicly suggested almost two weeks ago, were intended to pressure the Trump administration to back down from a simmering trade war. In addition to imposing additional tariffs on steel and aluminum from China and other countries, President Trump has threatened to put protective duties on other Chinese-made products worth $60 billion.

“We hope that the United States will rescind its measures that violate World Trade Organization rules as quickly as possible,” the ministry said in an online statement about China’s retaliatory tariffs. “China and the United States are the world’s two biggest economies, and cooperation is the only correct choice. Both sides should use dialogue and consultation to resolve their mutual concerns.”

The Chinese retaliation was no surprise. But Beijing appeared to go a step beyond its initial threat last month to counter the United States’ tariffs on steel and aluminum.

The Ministry of Commerce said then that it could impose tariffs in two stages: first, a 15 percent duty on 120 products, including fruit and wine, and then, after further assessing the impact of the United States’ tariffs, a 25 percent tariff on eight other products, including pork, an important moneymaker, especially in farming regions in states that voted for Mr. Trump.

But the latest announcement said the tariffs that will take effect on Monday covered all 128 products, including the 25 percent charge on pork.

The ministry said it had Chinese public opinion on its side after asking for views about the trade measures. Over recent weeks, China’s state-run news media has condemned the Trump administration’s protectionist steps and presented China as the innocent defender of open trade. In fact, China imposes relatively high barriers on many imports and on foreign investment in many sectors.

“Many members of the public voiced their support for the measures and the product list through telephone calls, emails and other means,” the ministry said. “After an assessment, it was decided to implement the measures described on 128 products imported from the United States.”

Mr. Trump’s threatened tariffs on $60 billion worth of other Chinese-made products are likely to prompt more retaliation from China, which could single out more valuable American exports such as soybeans and hurt Apple and other companies that rely heavily on Chinese consumers.

Liu He, a Chinese vice premier and economic adviser to President Xi Jinping, told Steven Mnuchin, the American Treasury secretary, in a phone call just more than a week ago that the two countries should “stay rational and work together to maintain the overall stability of their economic and trade relations.”

But Senator Elizabeth Warren, Democrat of Massachusetts, who has been visiting Beijing, said on Saturday that Chinese officials she met, including Mr. Liu, “have not deviated from their talking points” about the Trump administration’s tariffs.

“America is waking up to the loss of its technological advantage through China’s restrictions on access to its internal markets,” she told reporters. “That is now a place where policy is beginning to change.”

Steven Lee Myers contributed reporting.

THE NEW YORK TIMES. APRIL 1, 2018. BUSINESS DAY. THE WEEK AHEAD. White House to List Chinese Products Facing Tariffs and the March Jobs Report. TRADE. Trump to release list of next tariff targets.
Natalie Kitroeff

The Trump administration is expected this week to announce the list of Chinese products that will be hit with tariffs over what the administration has called the country’s theft of intellectual property. Mr. Trump has said the levies will affect at least $50 billion in imported goods and will most likely focus on cutting-edge tech products of the kind that United States fears losing out on to China. Americans are more likely to feel the impact of these tariffs than those applied to steel and aluminum in March, because they will probably hit consumer products found on store shelves, rather than raw materials used by manufacturers.

FINANCIAL TIMES. 04/01/2018. Chinese trade. China slaps retaliatory tariffs on American food. Beijing to impose duties on 128 US products including nuts, pork, fruit and wine. Analysts say Beijing is reluctant to escalate trade disputes with Washington because its economy still fairly dependent on exports
Tom Hancock in Shenzhen

China has unveiled retaliatory duties on US food imports including pork, fruit, nuts and wine of up to 25 per cent as a response to the Trump administration’s new tariffs on steel and aluminium imports.

Beijing said the additional duties on 128 kinds of products of US origin would be introduced from Monday “in order to safeguard China’s interests and balance the losses caused by the United States additional tariffs”, according to a statement posted online late on Sunday.

The highest additional tariffs of 25 per cent will be imposed on top of existing duties on imports of US scrap aluminium and various kinds of frozen pork, the statement said. An additional 15 per cent tariff will apply to dozens of US foods including fresh and dried fruits such as cherries, nuts such as almonds and pistachios, and wine and various kinds of rolled steel bars.

The list was consistent with measures proposed by Beijing last month when it said it was planning tariffs on $3bn of US imports. The response was seen as relatively measured because it left out key US exports to China such as soyabeans, of which the US exported about $14bn last year.

The new duties are specifically in retaliation for steel and aluminium tariffs announced by the Trump administration early in March, not for the 25 per cent levy on up to $60bn of annual imports from China that President Donald Trump promised later last month. That leaves open the prospect that Beijing could make a tougher response in the future.

Analysts say Beijing is reluctant to escalate trade disputes with Washington, with its economy still fairly dependent on exports, and it would appear to have more to lose in any trade war because it runs a surplus with the US.

But some influential commentators in China have called for a more robust response to the US’s next set of tariffs, the details of which are yet to be announced but which are expected to be aimed at strategic sectors such as robotics, which Beijing is promoting as part of its industrial policy.

Retaliating against soyabean shipments could have a big impact on US farmers, many from states that voted for Mr Trump in the 2016 presidential election. But it would also involve significant pain for China. The country relies heavily on the US for the product, which is used as an animal feed.

The Trump administration justified its aluminium and steel tariffs on national security grounds. Chinese steel groups at the time warned that the impact of the US tariffs would fall disproportionately on other countries, although a number of US allies have pushed for exemptions.

China accounts for less than 1 per cent of American steel imports.

Beijing’s focus is to prevent the EU and Japan from joining the US side in trade disputes, Arthur Kroeber of Gavekal Dragonomics, a Beijing-based research group, wrote in a commentary last month.

“China knows it can hold its own in a commercial conflict with any individual rival, including the US. But a concerted effort by the industrial democracies to constrain China’s mercantilist development programme would cause it much more pain,” he said.

FINANCIAL TIMES. 04/02/ 2018. Chinese trade. China’s targeted tariff retaliation threatens Trump heartland. Levies on agricultural specialty products designed to hurt US farming communities
Lucy Hornby

Beijing - Ginseng fetches more in China when it is sold in boxes emblazoned with the stars and stripes of the American flag. That makes the prized medicinal root a fitting symbol for a trade skirmish that could disproportionately impact farming communities in the US heartland.

China’s tit-for-tat retaliation for Washington’s tariffs on steel and aluminium will affect roughly $3bn in US products, and comes as both sides prepare for the Trump administration’s threatened tariffs on high-tech Chinese manufacturing.

American trade promoters have warned that Chinese retaliation could hit large-volume US exports, especially soyabeans, grown in heartland states that voted for the New York real estate developer. Beijing’s more targeted tariffs are likely to have a similar effect, while hurting China far less in return.

Of the 128 items on the Chinese list, almost 90 are luxury agricultural products such as dried fruit, nuts and ginseng. Another 32 items involve specialised steel products used in oil and gas production and transport — an area in which influential Chinese state-owned mills have invested in recent years. The others target pork and scrap aluminium.

“Each item is small, not a great volume, but it shows China’s attitude. If the US persists, China has the ability to reciprocate,” says Zhang Monan, senior fellow at the China Center for International Economic Exchanges. The $3bn in trade affected by Sunday’s announcement pales in comparison with the $14bn annual trade in soyabean shipments from the US to China, she notes.

With such a targeted response, it appears that China is attempting to fend off a much broader US action on electronics and other manufactured goods that are a mainstay of the Chinese industrial economy. Liu He, China’s US envoy, is in regular talks with White House officials to head off Mr Trump’s threats to act unless the bilateral trade deficit narrows by $100bn.

Imposing tariffs on soyabeans, the primary ingredient for cooking oil and pig feed in China, would ultimately raise inflation on the mainland. By contrast, the specialty products targeted in this round of tariffs have little impact on poorer Chinese but could impact certain US communities.

Take ginseng. Centuries ago, overharvesting wiped out the Asian variant on the Korean peninsula and north-east China. After sharp-eyed Jesuits noted a similar plant in the American woodlands, fur traders including legendary pioneer Daniel Boone made a fortune selling ginseng to Qing Dynasty China. The wild plant is now rarely seen in American mountain forests, but its farmed variant is a mainstay for 140 families in Marathon county, Wisconsin.

“American” ginseng is now also grown in north-east China, thanks to seeds and technology transferred from growers in Wisconsin, the source of 95 per cent of farmed US ginseng. In fact, China is the world’s largest producer, by far. But ginseng shipped from America still fetches a 30 per cent premium to Chinese-grown “American” ginseng, largely due to higher quality.

“It’s a good thing. I for one, representing the ginseng industry, welcome the tariff on American ginseng,” says Ding Liqi, secretary-general of the ginseng chamber of commerce in Jilin province where 70 per cent of the Chinese crop is grown. “It’s definitely a great opportunity for local ginseng producers.”

By chance or by design, targeting agricultural specialty products reverberates as sharply as soyabeans would in the rural communities where Donald Trump carried the vote. In Wisconsin overall, Mr Trump beat Hillary Clinton by less than 1 percentage point, but in Marathon County he carried the day with 56 per cent, a gain of 4 percentage points over the Republican tally in 2012. Meanwhile, the Democrat share of the vote plummeted.

Tariffs on American pork exports help breeders in China, where pig prices are at a cyclical low. But they hit hard in Iowa, home to one-third of US pork production and the US ambassador to China, former governor Terry Branstad. Every county in Iowa saw sharp gains for Republicans in the 2016 compared with 2012.

Meanwhile, almonds, and other dried fruits and nuts hit by the Chinese tariffs, are staple products of California’s fertile but drought-prone Central Valley. Farmers there voted heavily for Mr Trump despite the state of California as a whole leaning Democrat.

China is the second most important destination for California almonds, according to the state’s almond board. It has overseen a doubling in almond acreage over the past two decades, as orchards replaced thirsty cotton fields.

FINANCIAL TIMES. 03/27/2018. Opinion. Chinese economy. How China can avoid a trade war with the US. Beijing must recognise the shift in American perceptions and make some concessions

MARTIN WOLF

How should China respond to Donald Trump’s aggressive trade policy? The answer is: strategically. It needs to manage a rising tide of US hostility.

Of the events in Washington last week, the appointment of John Bolton as the US president’s principal adviser on national security may well be more momentous than the announcement of a “section 301” trade action against China. Nevertheless, the plan to impose 25 per cent tariffs on $60bn of (as yet, unspecified) Chinese exports to the US shows the aggression of Mr Trump’s trade agenda. The proposed tariffs are just one of several actions aimed at China’s technology-related policies. These include a case against China at the World Trade Organization and a plan to impose new restrictions on its investments in US technology companies.

The objectives of these US actions are unclear. Is it merely to halt alleged misbehaviour, such as forced transfers — or outright theft — of intellectual property? Or, as the labelling of China as a “strategic competitor” suggests, is it to halt China’s technological progress altogether — an aim that is unachievable and certainly non-negotiable.

Mr Trump also emphasised the need for China to slash its US bilateral trade surplus by $100bn. Indeed, his rhetoric implies that trade should balance with each partner. This aim is, once again, neither achievable nor negotiable.

The optimistic view is that these are opening moves in a negotiation that will end in a deal. A more pessimistic perspective is that this is a stage in an endless process of fraught negotiations between the two superpowers far into the future. A still more pessimistic view is that trade discussions will break down in a cycle of retaliation, perhaps as part of broader hostilities.

Which it turns out to be also depends on China. It must recognise the shift in US perceptions, of which Mr Trump’s election is a symptom. Moreover, on trade, the Democrats are far more protectionist than the Republicans.

What are the forces driving this shift? China’s rise has made the US fear the loss of its primacy. China’s communist autocracy is ideologically at odds with US democracy. What economists call “the China shock” has been real and significant, although trade with China has not been the main reason for the adverse changes experienced by US industrial workers. The US has also failed to provide the safety net or active support needed by affected workers and communities.

Furthermore, the deal reached when China joined the WTO in 2001 is no longer acceptable. As Mr Trump states, the US wants strict “reciprocity”. Finally, many business people argue that China is “cheating”, in pursuit of its industrial objectives.

Experience shows that the complaints will never end. A decade or so ago, complaints were about China’s current account surpluses, undervalued exchange rate and huge accumulations of reserves. All these have now been transformed: the current account surplus itself has fallen to just 1.4 per cent of gross domestic product. Now complaints have shifted towards bilateral imbalances, forced transfers of technology, excess capacity and China’s foreign direct investment. China is successful, big and different. Complaints change, but not the complaining.

How might China manage these frictions, exacerbated by the character of Mr Trump, yet rooted in deep anxieties?

First, retaliate with targeted, precise and limited countermeasures. Like all bullies, Mr Trump respects strength. Indeed, he respects China’s Xi Jinping.

Second, defuse legitimate complaints or ones whose redress is in China’s interests. Liberalising the Chinese economy is in China’s own interests, as the astonishing results of 40 years of “reform and opening up” demonstrate. China can and should accelerate its own domestic and external liberalisation. Among the widely shared complaints of foreign businesses, is over pressure to transfer know-how as part of doing business in China. Such “performance requirements” are contrary to WTO rules. China needs to act decisively on this.

Third, make some concessions. China could import liquefied natural gas from the US. This would reduce the bilateral surplus, while merely reallocating gas supplies across the world. But doing the same thing for commodities in which China is the world’s dominant market would be far more problematic, since it would hurt other suppliers. Mr Trump may well want China to discriminate against Australian foodstuffs or European aircraft. That way lies the end of the liberal global trading system.

Fourth, multilateralise these discussions. The issue of surpluses in standard products like steel cannot be dealt with at a purely unilateral or bilateral level. As a rising global power, China could play a central role in trade liberalisation, thereby strengthening the system and increasing the world’s stake in the health of the Chinese economy. Operating at such a global level brings another potential benefit: it is hard for great powers to negotiate bilaterally, since they tend to view concessions to each other as humiliating.

In the global context, however, a concession can be seen as a benefit to everybody. Finally, by operating under the rubric of the WTO, China puts Europeans in a difficult position. Europeans share US anxieties over China’s policies on intellectual property, but they also believe in the rules. If China took the high road, Europeans might feel compelled to support it.

We are in a new era of strategic competition. The question is whether this will be managed or lead to a breakdown in relations. Mr Trump’s trade policy is a highly destabilising part of this story. China should take the longer view of it, for its own sake and that of the world.

REUTERS. APRIL 1, 2018. China hammers U.S. goods with tariffs as 'sparks' of trade war fly

Ben Blanchard, Tony Munroe

BEIJING (Reuters) - China has increased tariffs by up to 25 percent on 128 U.S. products, from frozen pork and wine to certain fruits and nuts, escalating a dispute between the world’s biggest economies in response to U.S. duties on imports of aluminum and steel.

The tariffs, to take effect on Monday, were announced late on Sunday by China’s finance ministry and matched a list of possible tariffs on up to $3 billion in U.S. goods published by China on March 23.

Soon after the announcement, an editorial in the widely read Global Times newspaper warned that if the United States had thought China would not retaliate or would only take symbolic counter-measures, it could “say goodbye to that delusion”.

“Even though China and the U.S. have not publicly said they are in a trade war, the sparks of such a war have already started to fly,” the newspaper said.

The Ministry of Commerce said it was suspending its obligations to the World Trade Organization (WTO) to reduce tariffs on 120 U.S. goods, including fruit and ethanol. The tariffs on those products will be raised by an extra 15 percent.

BLOOMBERG. April 2, 2018. China Urges More Trade Talks as Tariffs on U.S. Goods Begin

• Beijing previously announced it would target 128 U.S. products
• Next step in trade rift expected to be U.S. actions on IP

China urged trade talks with the U.S. to prevent greater damage to relations while saying that previously announced retaliatory measures on American imports took effect Monday.

The U.S. didn’t respond to China’s March 26 request for consultation on Washington’s steel and aluminum tariffs, the Commerce Ministry said in a statement Monday, adding that officials have widespread public support for tougher measures and repeating Beijing’s stance that disputes should be resolved with dialogue. China previously planned to seek compensation for trade lost because of the U.S. metals actions.

“A lot of people have expressed their endorsement to the measures via phone and email, and they support the government to take actions to defend the interest of the nation,” the ministry said of responses during a public comment period that ended March 31. “Some people suggested even stronger measures.”

That followed a statement Sunday from the Customs Tariffs Commission saying that previously announced tariffs on 128 kinds of imported goods originating in the U.S. would take effect from Monday. The reciprocal tariffs are valued at about $3 billion, which represents a tiny fraction of its U.S. imports.

Those are in response to the U.S. tariffs on metal that President Donald Trump announced in March on national security grounds. Beijing said the move violated World Trade Organization rules. The U.S. has since announced some exceptions for allies, including Australia and Canada.

White House Press Secretary Sarah Huckabee Sanders told Fox News Monday that Trump is “ doing exactly what he said he was going to do” in order to reduce the U.S. trade deficit with China.

"The president knows that we’re billions of dollars in a trade deficit with China,” she said. “He’s tired of us being taken advantage of. They’ve taken our intellectual property, and the president’s going to fight back and he’s going to push back, but we want to be able to work with them to make sure we’re getting a good deal."

China said Sunday the tariffs “caused serious damage” to its interests.

Items on Beijing’s original hit-list, issued on March 23, included fresh and dried fruits, ginseng, nuts, wine, and pork, as well as certain steel products, and its value matches its exports of steel and aluminum to the U.S. So far, high-volume agricultural exports to China, such as soybeans, haven’t been swept into the mix.

China said earlier it could impose tariffs in two stages: a 15 percent duty on 120 products, and a 25 percent tariff on eight other products, including pork, after further assessing the impact of American tariffs. Sunday’s announcement covered all 128 products simultaneously.

“This shows China has the tool box to counter the unfair trade actions from Washington,” said Li Yong, a senior fellow at the China Association of International Trade in Beijing. “It’s very measured, and with no intention to escalate tension.”

Beyond the actions on metals, the Trump administration is preparing to propose a list of other Chinese products to be targeted with tariffs. Trump announced in March that the U.S. will impose duties on about $50 billion in Chinese goods to punish Beijing for what Washington sees as widespread violations of American intellectual property.

U.S. Trade Representative Robert Lighthizer has until April 6 to release the list. U.S. Commerce Secretary Wilbur Ross said on March 28 that an announcement on the measures will come “very shortly.” China has said it has a plan to act further if the import levies on its goods go ahead.

— With assistance by Miao Han, and Ros Krasny

THE WHITE HOUSE. March 22, 2018. FOREIGN POLICY. President Donald J. Trump is Standing Up for American Innovation

Under my Administration, the theft of American prosperity will end. We’re going to defend our industry and create a level playing field for the American worker — finally.

President Donald J. Trump

PROTECTING AMERICAN COMPETITIVENESS: President Donald J. Trump is taking action to address Chinese policies and practices that are harming American innovation.

• The President has directed his Administration to consider a range of actions to respond to China’s acts, policies, and practices involving the unfair and harmful acquisition of U.S. technology.
• President Trump’s Administration will propose for public comment adding 25 percent additional tariffs on certain products that are supported by China’s unfair industrial policy.
• Sectors subject to the proposed tariffs will include aerospace, information communication technology, and machinery.
• USTR will confront China’s discriminatory technology licensing practices through a World Trade Organization (WTO) dispute proceeding.
• The Department of Treasury, in consultation with other agencies, will propose restrictions on investment by China in sensitive U.S. technology.

A THREAT TO AMERICAN INNOVATION:  President Donald J. Trump based his actions in large part on the findings of the Section 301 investigation conducted by his Administration.

• In August, President Trump’s Administration launched an investigation into Chinese acts, policies, and practices related to technology transfer, intellectual property, and innovation.
• The U.S. Trade Representative (USTR) led the investigation under Section 301 of the Trade Act of 1974, which gives the USTR broad authority subject to Presidential direction to eliminate unfair trade practices or policies that burden U.S. commerce.
• This was the first Section 301 investigation since 2013.  USTR led an extensive investigation based on a thorough analysis of evidence and comments received from academics, think tanks, law firms, trade associations, and American companies and workers.
• The investigation concluded that China uses foreign ownership restrictions, such as joint venture requirements and administrative review and licensing processes to force or pressure U.S. companies to transfer technology to Chinese entities.
• China requires foreign companies that access their New Energy Vehicles market to transfer core technologies to a joint venture and disclose development and manufacturing technology for the entire vehicle.
• The investigation concluded that China forces U.S. companies seeking to license technologies to Chinese entities to do so on non-market based terms.
• China imposes contractual restrictions on the licensing of intellectual property and foreign technology into their country, but does not put the same restrictions on contracts between two Chinese enterprises.
• The investigation concluded that China directs and unfairly facilitates investments and acquisitions to generate large-scale technology transfer from U.S. companies to Chinese entities.
• A Chinese government-backed fund helped Apex Technology Co., a Chinese investment consortium, acquire a U.S. computer-printer maker which had previously sued Apex over patent infringement.
• The investigation concluded that China conducts and supports cyber intrusions into U.S. companies to access their sensitive commercial information, such as trade secrets.
• In 2014, the U.S. charged five Chinese military hackers for cyber espionage committed against U.S. corporations and a labor organization for commercial advantage.
• An interagency analysis estimates that China’s unfair acts, policies, and practices cause tens of billions in damages to the United States each year.

CONFRONTING UNFAIR TRADE: President Trump has made clear that his Administration will confront unfair trade practices that harm American commerce.

• Since taking office, President Trump has sought to confront unfair trade practices that have harmed American commerce for far too long.
• The President’s Administration conducted 82 antidumping and countervailing duty investigations in 2017.
• This was a 58 percent increase in investigations over 2016.
• In January, the President announced new safeguard tariffs on imported large residential washing machines and solar cells.
• The President’s decision to implement the tariffs was based on recommendations by the bi-partisan, independent International Trade Commission.
• President Trump’s Administration has successfully litigated WTO disputes targeting unfair trade practices and upholding our right to enact fair trade laws.
• In February 2018, USTR won a WTO compliance challenge against China’s unfair antidumping and countervailing duties on U.S. poultry exports, and China announced the termination of those duties.
• In November 2017, the United States won a WTO dispute regarding Indonesia’s unfair import licensing regime restricting U.S. agricultural exports.
• In October 2017, a WTO compliance panel found that U.S. tuna labeling rules designed to inform consumers about safe fishing practices were consistent with WTO standards.
• In September 2017, the WTO rejected allegations by the European Union that Boeing was receiving prohibited subsidies.
• In June 2017, a WTO compliance panel rejected almost all claims by the European Union that alleged U.S. subsidies to Boeing were causing serious prejudice to Airbus, instead finding that 28 of 29 challenged programs were consistent with WTO rules.

THE WHITE HOUSE. March 22, 2018. ECONOMY & JOBS. Remarks by President Trump at Signing of a Presidential Memorandum Targeting China’s Economic Aggression

THE PRESIDENT:  Well, thank you everybody.  This has been long in the making.  You’ve heard many, many speeches by me and talks by me, and interviews where I talk about unfair trade practices.  We’ve lost, over a fairly short period of time, 60,000 factories in our country — closed, shuttered, gone.  Six million jobs, at least, gone.  And now they’re starting to come back.  You see what’s happening with Chrysler, with Foxconn, with so many other companies wanting to come back into the United States.

But we have one particular problem.  And I view them as a friend; I have tremendous respect for President Xi.  We have a great relationship.  They’re helping us a lot in North Korea.  And that’s China.

But we have a trade deficit, depending on the way you calculate, of $504 billion.  Now, some people would say it’s really $375 billion.  Many different ways of looking at it, but any way you look at it, it is the largest deficit of any country in the history of our world.  It’s out of control.

We have a tremendous intellectual property theft situation going on, which likewise is hundreds of billions of dollars.  And that’s on a yearly basis.  I’ve spoken to the President.  I’ve spoken to representatives of China.  We’ve been dealing with it very seriously.

As you know, we’re renegotiating NAFTA.  We’ll see how that turns out.  Many countries are calling to negotiate better trade deals because they don’t want to have to pay the steel and aluminum tariffs.  And we are negotiating with various countries — Mr. Lighthizer, Mr. Ross.

We are just starting a negotiation with the European Union because they’ve really shut out our country to a large extent.  They have barriers that — they can trade with us but we can’t trade with them.  They’re very strong barriers.  They have very high tariffs.  We don’t.  It’s just not fair.

NAFTA has been a very bad deal for the United States, but we’ll make it better or we’ll have to do something else.  The deal we have with South Korea is a very one-sided deal.  It’s a deal that has to be changed.

So we have a lot of things happening.  But in particular, with China, we’re going to be doing a Section 301 trade action.  It could be about $60 billion but that’s really just a fraction of what we’re talking about.

I’ve been speaking with the highest Chinese representatives, including the President, and I’ve asked them to reduce the trade deficit immediately by $100 billion.  It’s a lot.  So that would be anywhere from 25 percent, depending on the way you figure, to maybe something even more than that.  But we have to do that.

The word that I want to use is “reciprocal.”  When they charge 25 percent for a car to go in, and we charge 2 percent for their car to come into the United States, that’s not good.  That’s how China rebuilt itself.  The tremendous money that we’ve paid since the founding of the World Trade Organization — which has actually been a disaster for us.  It’s been very unfair to us.  The arbitrations are very unfair.  The judging has been very unfair.  And knowingly, we always have a minority and it’s not fair.

So we’re talking to World Trade, we’re talking to NAFTA, we’re talking to China, we’re talking to the European Union.  And I will say, every single one of them wants to negotiate.  And I believe that, in many cases — maybe all cases — we’ll end up negotiating a deal.

So we’ve spoken to China and we’re in the midst of a very large negotiation.  We’ll see where it takes us.  But in the meantime, we are sending a Section 301 action.  I’ll be signing it right here, right now.  I’d like to ask Bob Lighthizer to say a few words about the 301 and where we are in that negotiation.

And we’re doing things for this country that should have been done for many, many years.  We’ve had this abuse by many other countries and groups of countries that were put together in order to take advantage of the United States, and we don’t want that to happen.  We’re not going to let that happen.  It’s probably one of the reasons I was elected; maybe one of the main reasons.  But we’re not going to let that happen.

We have, right now, an $800 billion trade deficit with the world.  So think of that.  So let’s say we have 500 to 375, but let’s say we have 500 with China, but we have 800 total with the world.  That would mean that China is more than half.  So we’re going to get it taken care of.  And, frankly, it’s going to make us a much stronger, much richer nation.

The word is “reciprocal.”  That’s the word I want everyone to remember.  We want reciprocal — mirror.  Some people call it a mirror tariff or a mirror tax.  Just use the word reciprocal.  If they charge us, we charge them the same thing.  That’s the way it’s got to be.  That’s not the way it is.  For many, many years — for many decades, it has not been that way.

And I will say, the people we’re negotiating with — smilingly, they really agree with us.  I really believe they cannot believe they’ve gotten away with this for so long.

I’ll talk to Prime Minister Abe of Japan and others — great guy, friend of mine — and there will be a little smile on their face.  And the smile is, “I can’t believe we’ve been able to take advantage of the United States for so long.”  So those days are over.

Ambassador Lighthizer, thank you.

AMBASSADOR LIGHTHIZER:  Well, thank you very much, Mr. President.  First of all, for those of you who don’t know, Section 301 is a statute that gives substantial power, authority to the President to correct actions in certain circumstances where there’s unfair acts, policies, or practices by our trading partners.

In this case, the area is technology.  Technology is probably the most important part of our economy.  There’s 44 million people who work in high-tech knowledge areas.  No country has as much technology-intensive industry as the United States.  And technology is really the backbone of the future of the American economy.

Given these problems, the President asked USTR to conduct a study.  We conducted a thorough study.  We had hearings.  We reviewed tens of thousands of pages of documents.  We talked to many, many business people.  We had testimony, as I say.

And we concluded that, in fact, China does have a policy of forced technology transfer; of requiring licensing at less than economic value; of state capitalism, wherein they go in and buy technology in the United States in non-economic ways; and then, finally, of cyber theft.

The result of this has been that the President has analyzed it — we have a 200-page study which we will put out — and he has concluded that we should put in place tariffs on appropriate products — we can explain later how we concluded what products they are; that we would put investment restrictions on China with respect to high technology; and that we’ll file a WTO case.  Because one of the actions here does involve a WTO violation.

This is an extremely important action, very significant and very important for the future of the country, really, across industries.  And I would really like to thank you very much, Mr. President, for giving me the opportunity to work on it.

THE PRESIDENT:  Thank you very much, Bob.  Secretary Ross.

SECRETARY ROSS:  Intellectual property rights are our future, and it’s no accident that in June of this year, the U.S. Patent and Trademark Office will issue its 10 millionth patent — 10 million patents.  There’s no country in the history of the world that remotely approaches that.

So the steel and aluminum actions we’ve taken deal more or less with the present.  This action on intellectual property rights deals with the future.  So we’re trying to solve both today’s problem and problems that otherwise will be forthcoming.  That’s why these actions are so important and so important in unison with each other.  We will end up negotiating these things, rather than fighting over them, in my view.

THE PRESIDENT:  Mike Pence, would you like to say something?

THE VICE PRESIDENT:  Thank you, Mr. President, and to all our honored guests.  Today’s action sends a clear message that this President and our entire administration are determined to put American jobs and American workers first.

The action the President will take today under Section 301 also makes it clear that the era of economic surrender is over.  The United States of America is taking targeted and focused action to protect not only American jobs, but America’s technology, which will power and drive an innovation economy for decades to come.

It is just one more step of a promise made and a promise kept by President Trump.

THE PRESIDENT:  So we’ll sign right now.  I just want to let everybody know, just for a second time, that we are in the midst of very major and very positive negotiations.  Positive for the United States and, actually, very positive for other countries also.

We have some of our great business leaders — and leaders, period — right behind me.  I may ask Marillyn — Lockheed — the leading woman’s business executive in this country, according to many.  And we buy billions and billions of dollars’ worth of that beautiful F-35.  It’s stealth.  You cannot see it.  Is that correct?

MS. HEWSON:  That’s correct, Mr. President.

THE PRESIDENT:  Better be correct.  Right?

MS. HEWSON:  Absolutely.

THE PRESIDENT:  Marillyn, please say a few words.

MS. HEWSON:  Well, thank you, Mr. President.  I would just say that this is a very important moment for our country, in that we are addressing what is a critical area for the aerospace and defense industry, and that is protecting our intellectual property.  As has been expressed, that is a threat to us if we have that stolen from our companies, because that is the lifeblood of our companies.

And so, we very much welcome this action on the part of the Trump administration and the President of the United States.  Thank you.

THE PRESIDENT:  Thank you, Marillyn.

This is the first of many.  This is number one, but this is the first of many.

(The memorandum is signed.)

Thank you all very much.  Marillyn.  Thank you very much.

MS. HEWSON:  Thank you, Mr. President.

Q    Mr. President, would you still like to testify to the Special Counsel, Robert Mueller?

THE PRESIDENT:  I would like to.  I would like to.

THE WHITE HOUSE. March 22, 2018. ECONOMY & JOBS. PROCLAMATIONS. Presidential Proclamation Adjusting Imports of Steel into the United States
BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

1.  On January 11, 2018, the Secretary of Commerce (Secretary) transmitted to me a report on his investigation into the effect of imports of steel mill articles on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).

2.  In Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel Into the United States), I concurred in the Secretary’s finding that steel mill articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, and decided to adjust the imports of steel mill articles, as defined in clause 1 of Proclamation 9705, as amended by clause 8 of this proclamation (steel articles), by imposing a 25 percent ad valorem tariff on such articles imported from all countries except Canada and Mexico.

3.  In proclaiming this tariff, I recognized that our Nation has important security relationships with some countries whose exports of steel articles to the United States weaken our internal economy and thereby threaten to impair the national security.  I also recognized our shared concern about global excess capacity, a circumstance that is contributing to the threatened impairment of the national security.  I further determined that any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country, and noted that, should the United States and any such country arrive at a satisfactory alternative means to address the threat to the national security such that I determine that imports from that country no longer threaten to impair the national security, I may remove or modify the restriction on steel articles imports from that country and, if necessary, adjust the tariff as it applies to other countries as the national security interests of the United States require.

4.  The United States is continuing discussions with Canada and Mexico, as well as the following countries, on satisfactory alternative means to address the threatened impairment to the national security by imports of steel articles from those countries: the Commonwealth of Australia (Australia), the Argentine Republic (Argentina), the Republic of Korea (South Korea), the Federative Republic of Brazil (Brazil), and the European Union (EU) on behalf of its member countries.  Each of these countries has an important security relationship with the United States and I have determined that the necessary and appropriate means to address the threat to the national security posed by imports from steel articles from these countries is to continue these discussions and to exempt steel articles imports from these countries from the tariff, at least at this time.  Any country not listed in this proclamation with which we have a security relationship remains welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports of steel articles from that country.

5.  The United States has an important security relationship with Australia, including our shared commitment to supporting each other in addressing national security concerns, particularly through our security, defense, and intelligence partnership; the strong economic and strategic partnership between our countries; our shared commitment to addressing global excess capacity in steel production; and the integration of Australian persons and organizations into the national technology and industrial base of the United States.

6.  The United States has an important security relationship with Argentina, including our shared commitment to supporting each other in addressing national security concerns in Latin America, particularly the threat posed by instability in Venezuela; our shared commitment to addressing global excess capacity in steel production; the reciprocal investment in our respective industrial bases; and the strong economic integration between our countries.

7.  The United States has an important security relationship with South Korea, including our shared commitment to eliminating the North Korean nuclear threat; our decades-old military alliance; our shared commitment to addressing global excess capacity in steel production; and our strong economic and strategic partnership.

8.  The United States has an important security relationship with Brazil, including our shared commitment to supporting each other in addressing national security concerns in Latin America; our shared commitment to addressing global excess capacity in steel production; the reciprocal investment in our respective industrial bases; and the strong economic integration between our countries.

9.  The United States has an important security relationship with the EU and its constituent member countries, including our shared commitment to supporting each other in national security concerns; the strong economic and strategic partnership between the United States and the EU, and between the United States and EU member countries; and our shared commitment to addressing global excess capacity in steel production.

10.  In light of the foregoing, I have determined that the necessary and appropriate means to address the threat to the national security posed by imports of steel articles from these countries is to continue ongoing discussions and to increase strategic partnerships, including those with respect to reducing global excess capacity in steel production by addressing its root causes.  In my judgment, discussions regarding measures to reduce excess steel production and excess steel capacity, measures that will increase domestic capacity utilization, and other satisfactory alternative means will be most productive if the tariff proclaimed in Proclamation 9705 on steel articles imports from these countries is removed at this time.

11.  However, the tariff imposed by Proclamation 9705 remains an important first step in ensuring the economic viability of our domestic steel industry and removing the threatened impairment of the national security.  Without this tariff and the adoption of satisfactory alternative means addressing long-term solutions in ongoing discussions with the countries listed as excepted in clause 1 of this proclamation, the industry will continue to decline, leaving the United States at risk of becoming reliant on foreign producers of steel to meet our national security needs — a situation that is fundamentally inconsistent with the safety and security of the American people.  As a result, unless I determine by further proclamation that the United States has reached a satisfactory alternative means to remove the threatened impairment to the national security by imports of steel articles from a particular country listed as excepted in clause 1 of this proclamation, the tariff set forth in clause 2 of Proclamation 9705 shall be effective May 1, 2018, for the countries listed as excepted in clause 1 of this proclamation.  In the event that a satisfactory alternative means is reached such that I decide to exclude on a long-term basis a particular country from the tariff proclaimed in Proclamation 9705, I will also consider whether it is necessary and appropriate in light of our national security interests to make any corresponding adjustments to the tariff set forth in clause 2 of Proclamation 9705 as it applies to other countries.  Because the current tariff exemptions are temporary, however, I have determined that it is necessary and appropriate to maintain the current tariff level at this time.

12.  In the meantime, to prevent transshipment, excess production, or other actions that would lead to increased exports of steel articles to the United States, the United States Trade Representative, in consultation with the Secretary and the Assistant to the President for Economic Policy, shall advise me on the appropriate means to ensure that imports from countries exempt from the tariff imposed in Proclamation 9705 do not undermine the national security objectives of such tariff.  If necessary and appropriate, I will consider directing U.S. Customs and Border Protection (CBP) of the Department of Homeland Security to implement a quota as soon as practicable, and will take into account all steel articles imports since January 1, 2018, in setting the amount of such quota.

13.  Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

14.  Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States (HTSUS) the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.

Now, Therefore, I, Donald J. Trump, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended, section 301 of title 3, United States Code, and section 604 of the Trade Act of 1974, as amended, do hereby proclaim as follows:

(1)  Imports of all steel articles, as defined in clause 1 of Proclamation 9705, as amended by clause 8 of this proclamation, from the countries listed in this clause shall be exempt from the duty established in clause 2 of Proclamation 9705 until 12:01 a.m. eastern daylight time on May 1, 2018.  Further, clause 2 of Proclamation 9705 is amended by striking the last two sentences and inserting the following two sentences:  “Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all steel articles imports specified in the Annex shall be subject to an additional 25 percent ad valorem rate of duty with respect to goods entered, or withdrawn from warehouse for consumption, as follows:  (a) on or after 12:01 a.m. eastern daylight time on March 23, 2018, from all countries except Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the European Union, and (b) on or after 12:01 a.m. eastern daylight time on May 1, 2018, from all countries.  This rate of duty, which is in addition to any other duties, fees, exactions, and charges applicable to such imported steel articles, shall apply to imports of steel articles from each country as specified in the preceding sentence.”.

(2)  Paragraph (a) of U.S. note 16, added to subchapter III of chapter 99 of the HTSUS by the Annex to Proclamation 9705, is amended by replacing “Canada and of Mexico” with “Canada, of Mexico, of Australia, of Argentina, of South Korea, of Brazil, and of the member countries of the European Union”.

(3)  The “Article description” for heading 9903.80.01 of the HTSUS is amended by replacing “Canada or of Mexico” with “Canada, of Mexico, of Australia, of Argentina, of South Korea, of Brazil, or of the member countries of the European Union”.

(4)  The exemption afforded to steel articles from Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the EU shall apply only to steel articles of such countries entered, or withdrawn from warehouse for consumption, through the close of April 30, 2018, at which time Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the EU shall be deleted from paragraph (a) of U.S. note 16 to subchapter III of chapter 99 of the HTSUS and from the article description of heading 9903.80.01 of the HTSUS.

(5)  Any steel article that is admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern daylight time on March 23, 2018, may only be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.  Any steel article that was admitted into a U.S. foreign trade zone under “privileged foreign status” as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by Proclamation 9705, as amended by this proclamation.

(6)  Clause 3 of Proclamation 9705 is amended by inserting a new third sentence reading as follows:  “Such relief may be provided to directly affected parties on a party-by-party basis taking into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate.”.

(7)  Clause 3 of Proclamation 9705, as amended by clause 6 of this proclamation, is further amended by inserting a new fifth sentence as follows:  “For merchandise entered on or after the date the directly affected party submitted a request for exclusion, such relief shall be retroactive to the date the request for exclusion was posted for public comment.”.

(8)  The reference to “7304.10” in clause 1 of Proclamation 9705, is amended to read “7304.11”.

(9)  The Secretary, in consultation with CBP and other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments and effective dates directed in this proclamation.  The Secretary shall publish any such modification to the HTSUS in the Federal Register.

(10)  Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-second day of March, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-second.

DONALD J. TRUMP

THE WHITE HOUSE. March 22, 2018. ECONOMY & JOBS. PROCLAMATIONS. Presidential Proclamation Adjusting Imports of Aluminum into the United States
BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

1.  On January 19, 2018, the Secretary of Commerce (Secretary) transmitted to me a report on his investigation into the effect of imports of aluminum articles on the national security of the United States under section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862).

2.  In Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum Into the United States), I concurred in the Secretary’s finding that aluminum articles are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States, and decided to adjust the imports of aluminum articles, as defined in clause 1 of Proclamation 9704 (aluminum articles), by imposing a 10 percent ad valorem tariff on such articles imported from all countries except Canada and Mexico.

3.  In proclaiming this tariff, I recognized that our Nation has important security relationships with some countries whose exports of aluminum articles to the United States weaken our internal economy and thereby threaten to impair the national security.  I also recognized our shared concern about global excess capacity, a circumstance that is contributing to the threatened impairment of the national security.  I further determined that any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country, and noted that, should the United States and any such country arrive at a satisfactory alternative means to address the threat to the national security such that I determine that imports from that country no longer threaten to impair the national security, I may remove or modify the restriction on aluminum articles imports from that country and, if necessary, adjust the tariff as it applies to other countries as the national security interests of the United States require.

4.  The United States is continuing discussions with Canada and Mexico, as well as the following countries, on satisfactory alternative means to address the threatened impairment to the national security by imports of aluminum articles from those countries: the Commonwealth of Australia (Australia), the Argentine Republic (Argentina), the Republic of Korea (South Korea), the Federative Republic of Brazil (Brazil), and the European Union (EU) on behalf of its member countries.  Each of these countries has an important security relationship with the United States and I have determined that the necessary and appropriate means to address the threat to the national security posed by imports from aluminum articles from these countries is to continue these discussions and to exempt aluminum articles imports from these countries from the tariff, at least at this time.  Any country not listed in this proclamation with which we have a security relationship remains welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports of aluminum articles from that country.

5.  The United States has an important security relationship with Australia, including our shared commitment to supporting each other in addressing national security concerns, particularly through our security, defense, and intelligence partnership; the strong economic and strategic partnership between our countries; our shared commitment to addressing global excess capacity in aluminum production; and the integration of Australian persons and organizations into the national technology and industrial base of the United States.

6.  The United States has an important security relationship with Argentina, including our shared commitment to supporting each other in addressing national security concerns in Latin America, particularly the threat posed by instability in Venezuela; our shared commitment to addressing global excess capacity in aluminum production; the reciprocal investment in our respective industrial bases; and the strong economic integration between our countries.

7.  The United States has an important security relationship with South Korea, including our shared commitment to eliminating the North Korean nuclear threat; our decades-old military alliance; our shared commitment to addressing global excess capacity in aluminum production; and our strong economic and strategic partnership.

8.  The United States has an important security relationship with Brazil, including our shared commitment to supporting each other in addressing national security concerns in Latin America; our shared commitment to addressing global excess capacity in aluminum production; the reciprocal investment in our respective industrial bases; and the strong economic integration between our countries.

9.  The United States has an important security relationship with the EU and its constituent member countries, including our shared commitment to supporting each other in national security concerns; the strong economic and strategic partnership between the United States and the EU, and between the United States and EU member countries; and our shared commitment to addressing global excess capacity in aluminum production.

10.  In light of the foregoing, I have determined that the necessary and appropriate means to address the threat to the national security posed by imports of aluminum articles from these countries is to continue ongoing discussions and to increase strategic partnerships, including those with respect to reducing global excess capacity in aluminum production by addressing its root causes.  In my judgment, discussions regarding measures to reduce excess aluminum production and excess aluminum capacity, measures that will increase domestic capacity utilization, and other satisfactory alternative means will be most productive if the tariff proclaimed in Proclamation 9704 on aluminum articles imports from these countries is removed at this time.

11.  However, the tariff imposed by Proclamation 9704 remains an important first step in ensuring the economic viability of our domestic aluminum industry and removing the threatened impairment of the national security.  Without this tariff and the adoption of satisfactory alternative means addressing long-term solutions in ongoing discussions with the countries listed as excepted in clause 1 of this proclamation, the industry will continue to decline, leaving the United States at risk of becoming reliant on foreign producers of aluminum to meet our national security needs — a situation that is fundamentally inconsistent with the safety and security of the American people.  As a result, unless I determine by further proclamation that the United States has reached a satisfactory alternative means to remove the threatened impairment to the national security by imports of aluminum articles from a particular country listed as excepted in clause 1 of this proclamation, the tariff set forth in clause 2 of Proclamation 9704 shall be effective May 1, 2018, for the countries listed as excepted in clause 1 of this proclamation.  In the event that a satisfactory alternative means is reached such that I decide to exclude on a long-term basis a particular country from the tariff proclaimed in Proclamation 9704, I will also consider whether it is necessary and appropriate in light of our national security interests to make any corresponding adjustments to the tariff set forth in clause 2 of Proclamation 9704 as it applies to other countries.  Because the current tariff exemptions are temporary, however, I have determined that it is necessary and appropriate to maintain the current tariff level at this time.

12.  In the meantime, to prevent transshipment, excess production, or other actions that would lead to increased exports of aluminum articles to the United States, the United States Trade Representative, in consultation with the Secretary and the Assistant to the President for Economic Policy, shall advise me on the appropriate means to ensure that imports from countries exempt from the tariff imposed in Proclamation 9704 do not undermine the national security objectives of such tariff.  If necessary and appropriate, I will consider directing U.S. Customs and Border Protection (CBP) of the Department of Homeland Security to implement a quota as soon as practicable, and will take into account all aluminum articles imports since January 1, 2018, in setting the amount of such quota.

13.  Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

14.  Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States (HTSUS) the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.

Now, Therefore, I, Donald J. Trump, President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended, section 301 of title 3, United States Code, and section 604 of the Trade Act of 1974, as amended, do hereby proclaim as follows:

(1)  Imports of all aluminum articles, as defined in clause 1 of Proclamation 9704, from the countries listed in this clause shall be exempt from the duty established in clause 2 of Proclamation 9704 until 12:01 a.m. eastern daylight time on May 1, 2018.  Further, clause 2 of Proclamation 9704 is amended by striking the last two sentences and inserting the following two sentences:  “Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all aluminum articles imports specified in the Annex shall be subject to an additional 10 percent ad valorem rate of duty with respect to goods entered, or withdrawn from warehouse for consumption, as follows:  (a) on or after 12:01 a.m. eastern daylight time on March 23, 2018, from all countries except Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the European Union, and (b) on or after 12:01 a.m. eastern daylight time on May 1, 2018, from all countries.  This rate of duty, which is in addition to any other duties, fees, exactions, and charges applicable to such imported aluminum articles, shall apply to imports of aluminum articles from each country as specified in the preceding sentence.”.

(2)  Paragraph (a) of U.S. note 19, added to subchapter III of chapter 99 of the HTSUS by the Annex to Proclamation 9704, is amended by replacing “Canada and of Mexico” with “Canada, of Mexico, of Australia, of Argentina, of South Korea, of Brazil, and of the member countries of the European Union”.

(3)  The “Article description” for heading 9903.85.01 of the HTSUS is amended by replacing “Canada or of Mexico” with “Canada, of Mexico, of Australia, of Argentina, of South Korea, of Brazil, or of the member countries of the European Union”.

(4)  The exemption afforded to aluminum articles from Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the EU shall apply only to aluminum articles of such countries entered, or withdrawn from warehouse for consumption, through the close of April 30, 2018, at which time Canada, Mexico, Australia, Argentina, South Korea, Brazil, and the member countries of the EU shall be deleted from paragraph (a) of U.S. note 19 to subchapter III of chapter 99 of the HTSUS and from the article description of heading 9903.85.01 of the HTSUS.

(5)  Any aluminum article that is admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern daylight time on March 23, 2018, may only be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.  Any aluminum article that was admitted into a U.S. foreign trade zone under “privileged foreign status” as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by Proclamation 9704, as amended by this proclamation.

(6)  Clause 3 of Proclamation 9704 is amended by inserting a new third sentence reading as follows:  “Such relief may be provided to directly affected parties on a party-by-party basis taking into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate.”.

(7)  Clause 3 of Proclamation 9704, as amended by clause 6 of this proclamation, is further amended by inserting a new fifth sentence as follows:  “For merchandise entered on or after the date the directly affected party submitted a request for exclusion, such relief shall be retroactive to the date the request for exclusion was posted for public comment.”.

(8)  The Secretary, in consultation with CBP and other relevant executive departments and agencies, shall revise the HTSUS so that it conforms to the amendments and effective dates directed in this proclamation.  The Secretary shall publish any such modification to the HTSUS in the Federal Register.

(9)  Any provision of previous proclamations and Executive Orders that is inconsistent with the actions taken in this proclamation is superseded to the extent of such inconsistency.

IN WITNESS WHEREOF, I have hereunto set my hand this twenty-second day of March, in the year of our Lord two thousand eighteen, and of the Independence of the United States of America the two hundred and forty-second.

DONALD J. TRUMP

THE WHITE HOUSE. March 22, 2018. ECONOMY & JOBS. STATEMENTS & RELEASES. President Trump Approves Section 232 Tariff Modifications

WASHINGTON – Today, based on ongoing dialogues, President Donald J. Trump authorized the modification of the Section 232 tariffs on steel and aluminum imports to suspend the tariffs for certain countries before they take effect.  These suspensions are based on factors including ongoing discussions regarding measures to reduce global excess capacity in steel and aluminum production by addressing its root causes.

The tariffs on steel and aluminum imports from the following countries are suspended until May 1, 2018, pending discussions of satisfactory long-term alternative means to address the threatened impairment to U.S. national security:

• Argentina;
• Australia;
• Brazil;
• Canada;
• Mexico;
• the member countries of the European Union; and
• South Korea.

By May 1, 2018, the President will decide whether to continue to exempt these countries from the tariffs, based on the status of the discussions.  The European Union will negotiate on behalf of its member countries.

The President retains broad authority to further modify the tariffs, including by removing the suspensions or suspending additional countries.  Any country not currently suspended remains welcome to discuss a possible suspension with the United States based on a shared commitment to addressing global excess steel and aluminum capacity and production.

The Administration will closely monitor imports of steel and aluminum imports from exempted countries, and the United States Trade Representative, in consultation with the Secretary of Commerce and the Director of the National Economic Council, may advise the President to impose quotas as appropriate.  Further action by the President would be needed to implement any quota the President might decide to adopt.

The tariffs proclaimed in Presidential Proclamations 9704 and 9705 will go into effect on 12:01 a.m. on Friday, March 23, 2018.

The process for directly affected parties to apply for an exclusion for specific steel or aluminum products that they need remains in place, as announced in the two Presidential Proclamations and subsequent Federal Register notices by the U.S. Department of Commerce.  Secretary Ross, in consultation with other Administration officials, will evaluate exclusion requests for products, taking into account national security considerations.  In that evaluation, the Secretary will consider whether a product is produced in the United States of a satisfactory quality or in a sufficient and reasonably available amount.

THE WHITE HOUSE. March 23, 2018. ECONOMY & JOBS. STATEMENTS & RELEASES.What They Are Saying: Support For President Donald J. Trump’s Section 301 Trade Actions

Members of Congress

Senate Minority Leader Chuck Schumer (D-NY): “President Trump is exactly right this afternoon to propose a plan designed to punish China for its most flagrant trade abuses. I’ve called for such action for years and been disappointed by the inactions of both Presidents Bush and Obama. I’m very pleased that this Administration is taking strong action to get a better deal on China.”

Sen. Marco Rubio (R-FL): “President Trump’s trade actions against China are the right thing to do. China has used the wealth of the American people to crush human rights and destabilize our economic order. The actions announced today are good first steps toward re-asserting American economic leadership.”

Sen. James Inhofe (R-OK): “This is the first time in a long time that we’ve had a President who knows how to negotiate…. So far the stuff that he’s been doing has worked. I think this is going to work too.”

Sen. Lindsey Graham (R-SC): “I’m very pleased and supportive of President Trump’s efforts to push back against China’s intellectual property theft, dumping, and other unfair trade practices. This pushback by President Trump is long overdue as a nation. I want to congratulate him for carrying out yet another campaign promise to push back against China for their unfair trade practices. If we continue this policy, China will over time change the way they do business which will be a Godsend for the American worker.”

Rep. Mario Diaz-Balart (R-FL): “I commend President Trump for his tough stand against Communist China, which has gotten away with unfair trade practices and intellectual property theft for far too long.  The President’s commonsense measures aim to level the playing field for American businesses, which have been forced to compete against the PRC’s currency manipulations, IP theft, and other dishonest or coercive business practices…. Today’s announcement by the President is a good first step toward protecting American businesses and hard-won innovation.”

Cabinet Members & Administration Officials

Secretary of the Treasury Steven Mnuchin: “China has sought to gain access to intellectual property and cutting-edge technology developed by U.S. businesses through such wrongful practices as systemic, government-driven investment in U.S. companies, unreasonable requirements and limiting restrictions intended to pressure U.S. firms, and cyber-enabled intrusions. This conduct threatens our national interests, undermines the value of U.S. investments and technology, weakens the global competitiveness of our firms, and harms American workers. Today’s actions are designed to counter this conduct and address the threat it presents to U.S. national interests.”

U.S. Trade Representative Robert Lighthizer: “President Trump has made it clear we must insist on fair and reciprocal trade with China and strictly enforce our laws against unfair trade.  This requires taking effective action to confront China over its state-led efforts to force, strong-arm, and even steal U.S. technology and intellectual property. Years of talking about these problems with China has not worked. The United States is committed to using all available tools to respond to China’s unfair, market-distorting behavior. China’s unprecedented and unfair trade practices are a serious challenge not just to the United States, but to our allies and partners around the world.”

State Department Acting Under Secretary for Public Diplomacy and Public Affairs Heather Nauert: “By taking action to address Chinese policies and practices that are harming American innovation, @POTUS is confronting unfair trade practices that harm American commerce.”

Advocacy Organizations, Businesses Leaders, & Policy Experts

Former Deputy Assistant Secretary of the Army Van Hipp: “This is a national security issue that should unite all Americans behind the President’s action today. China’s antics over the years have inflicted real harm to our national security. Fortunately, we have a Commander-in-Chief who understands that and who will do whatever it takes to maintain America’s competitive edge.”

American Enterprise Institute Director of Asian Studies Daniel Blumenthal: “President Trump is finally taking much needed action against Chinese economic aggression. The United States government has long-recognized that the Communist Party of China uses a diverse toolkit of unfair trade practices to steal U.S. technology and intellectual property – the lifeblood of our economy. We have engaged in over a decade of dialogues with the highest levels of the Chinese Communist Party over these and other troubling economic practices. We have made very little progress. It is past time for action, and the Administration should be commended for prioritizing the defense of our national innovation base and finally recognizing the reality that the Communist Party of China has treated us as an economic, military and diplomatic competitor for decades.”

American Enterprise Institute Resident Scholar Derek Scissors: “Whether looking forward or backward, China’s coercive practices with regard with technology and intellectual property call for strong American action. Looking backward, China has engaged in by far the world’s largest campaign to steal trade secrets. It has also pressured foreign companies for years to ‘cooperate’ with Chinese firms in developing and applying technology, which translates to handing technology to future competitors. Looking forward, China describes global technological leadership as a top priority. China claims it will respect foreign intellectual property while seeking this leadership but that promise has been made and broken many times before. The Trump Administration correctly recognizes that the US is long overdue in responding to Chinese technology and trade secret theft.”

Center for the National Interest Director of Defense Studies Harry Kazianis: “When looked at as part of this bigger picture, we can see the new tariffs on Chinese products are the beginnings of a comprehensive U.S. strategy that’s in our national interest and that will protect American jobs and our economy from China’s unfair practices.”

Center for a New American Security, Asia-Pacific Security Program Senior Advisor and Senior Director Patrick Cronin: “The truth is that preserving the so-called liberal international order requires real reciprocity. Yet an accumulation of market distortions, state-owned enterprises, intellectual property theft, and other predatory trade and investment practices by China have made it more difficult to do business on a level playing field. The Trump Administration’s bold actions on Thursday amount to a measured strategic response to China’s growing economic aggression. Since the issuance in December of a new National Security Strategy in which major-power competition rose to top priority, Washington has made clear that it will no longer neglect the right to economic self-defense.”

Center for Strategic and International Studies Senior Fellow for Asian Security Zack Cooper: “China’s intellectual property theft and other unfair trade practices undermine not only the U.S. economy, but also U.S. national security. Economic competition must take place within a rules-based system that rewards hard work and innovation. China’s intellectual property theft unfairly erodes U.S. competitiveness and weakens U.S. industries, including the defense industrial base. Therefore, it is critical that the United States work with allies and partners to change Chinese leaders’ decision calculus in order to safeguard our workers, industries, innovations, and independence.”

Coalition for a Prosperous America Chairman Daniel DiMicco and CEO Michael Stumo: “Our bipartisan coalition of manufacturing, agricultural and labor members strongly supports the President’s bold actions. Beijing has engaged in ‘economic aggression’ for more than 20 years and the largest IP theft in the history of the world economy. Government-owned firms have repeatedly hacked America’s leading companies and stolen proprietary technology to build China’s economy. Several CPA members have had their intellectual property stolen by Chinese firms. US companies that attempt to do business in China are forced to sign coercive agreements that require the transfer of key technologies in return for short-term market access. Additionally, their new Cybersecurity Law requires foreign companies already in China to surrender their data and IP. These are aggressive actions by a nation taking full advantage of American companies and workers and are destructive to both our economic and national security. It is past time for America to defend itself with our strategic response to their Strategic Policy of ‘economic aggression.’”

The Daily Beast Columnist Gordon Chang: “Chinese leaders, officials, and bureaucrats have for decades waged a campaign to undermine our companies, industrial base, and economy. This has been the fundamental challenge of our time. American leaders first ignored the comprehensive assault on our society and then to no avail appealed to Beijing to act responsibly. We now have no choice but to impose costs and President Trump’s action today is a critical step in the right direction.”

Former Deputy Undersecretary of Defense for East Asia and Pacific Affairs Richard Lawless: “The measures announced today reflect a considered and deliberate approach on the part of the Trump Administration to pro-actively address a range of critical national security issues defined by China’s determined acquisition of critical American technology, intellectual property and market position. These U.S. policy initiatives are long overdue and address a new reality – China’s success in leveraging the international trade system to systematically penetrate and occupy selected high technology sectors, and do so in a manner that will allow Chinese firms to dominate these sectors over future generations. These are no small ambitions on the part of China’s state-directed actors, reflecting as they do a well-constructed and sustained effort to elevate China writ large to dominate positions across a number of technology and product sectors. Most of the impacted sectors involve America’s defense industrial base, the core unpinning of our long-term national security. In a parallel effort to strip US and friendly foreign firms of essential technology and know-how, China state entities require companies desiring to operate in China proper to ‘share’ or transfer this information to domestic firms, resulting in the loss of leadership and market position for the extorted foreign firms. It is time to shine a laser beam of truth on these undertakings and execute an active defense posture that protects American strategic interests. That process has now begun.”

General Atomics Aeronautical Systems President David Alexander: “American innovation is a key pillar of our strength as a nation, but unabated theft of US defense technology erodes our national security and economic competitiveness. We applaud President Trump’s commitment and follow through to shore up the United States’ defenses against Chinese intellectual property theft and economic aggression.”

General Dynamics Chairman and CEO Phebe Novakovic: “In the aerospace and defense industry, our technological innovations drive our ability to deliver superior platforms and systems. Theft of these innovations poses a threat to our industrial base and to our national security. We support the Administration’s commitment to addressing the issue of state-sponsored intellectual property theft.”

Hudson Institute Director of the Center for Chinese Strategy Michael Pillsbury: “The President’s bold action today sends a powerful signal to China’s leaders that the United States is committed to upholding its economic and national security interests against the pervasive threat of Intellectual Property theft. President Trump and his Administration have acted carefully but with determination to preserve the cornerstone of U.S. innovation and competitiveness and to protect American national security.”

IronNet Cybersecurity President and CEO and Former Director of the National Security Agency Keith Alexander: “The theft of American intellectual property by China is one of the greatest transfers of wealth in history. This loss of our country’s intellectual capital from cyberattacks could impact our country for generations. And we should be using every element of our national power to prevent this activity and to protect companies and the government in cyberspace. The measures the White House has announced today are an important step to address this critical national security issue.”

Leidos Chairman and CEO Roger Krone: “Across sectors, there is an urgent need to protect our economic and national security interests. The Administration is taking tangible steps to not only protect US companies in the marketplace, but also to protect billions of dollars of research and development that can make the difference in the battlefield as well as in the balance of global trade. Our goal is to ensure that in a decade we will not look back to see a loss of market share, industrial capacity and billions of dollars in research and development that were all taken right under our noses.”

Lockheed Martin Chairman, President, and CEO Marillyn Hewson: “Lockheed Martin welcomes the Trump Administration’s focus on the critical need to protect U.S. defense and aerospace industry intellectual property.”

National Bureau of Asian Research President Richard Ellings: “The Administration is acting to protect American interests in the face of coordinated political and commercial pressure from China to take the intellectual property of American companies and force their transfer of technology. Our system must respond as an integrated whole to this challenge, and so charging the secretary of the Treasury to limit Chinese investment in the U.S. economy where it runs counter to American national security interests is a good first step.”

National Defense Industrial Association President and CEO Gen. Herbert “Hawk” Carlisle (Ret): “NDIA supports the Administration’s specific and targeted response to this threat. We see these actions as the first steps in a strategy that includes sustained, robust engagement with our international allies and partners. This will ensure U.S. actions have the maximum influence on China, bringing it into harmony with international norms and practices to ensure a reciprocal, fair environment for U.S. and allied industries and to secure a peaceful, productive and prosperous future.”

Northrop Grumman Chairman and CEO Wes Bush: “Northrop Grumman applauds the President’s focus on protecting US intellectual property and strengthening our national security.”

Raytheon Chairman and CEO Thomas Kennedy: “Ongoing cyber threats and IP theft undertaken by state sponsors pose a national security issue for our country and weaken the competitiveness of American industries and workers. The public-private partnership supported by the Administration – and the penalties outlined today – are key to our collective ability to defend against future threats.”

Sasakawa Peace Foundation USA Chairman and Former Director of National Intelligence Dennis Blair: “It has been almost five years since the Intellectual Property Commission recommended strong action, rather than words, to stop the flow of America’s precious innovative edge to China. We welcome the President’s action today. This is the first time foreign intellectual property thieves face real consequences beyond hearing lectures. This is a solid first step towards dealing with Chinese economic aggression against this country. It is unlikely to be the last.”

U.S.–China Economic and Security Review Commission Member Michael Wessel: “Intellectual property is fundamental to the national and economic security of our country. For far too long, U.S. Administrations have essentially stood by while China, by hook or by crook, has harvested our intellectual property. This action makes clear that we’re not going to simply have more dialogue about the threats to our economy, our manufacturing base and our jobs. China’s direct and coercive theft of our intellectual property has had a huge cost to our country and the 301 response makes clear that we aren’t going to continue to allow it to happen.”

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LGCJ.: