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Senate Finance Committee Chairman Offers More Details on Trade Priorities for this Year

As previously reported, Republican Senator Chuck Grassley will once again chair the Senate Finance Committee after a 12-year hiatus due to Republican Party term limits for committee chairmen. In a 10 January statement, he formally laid out his committee agenda for the current session of Congress, emphasising both the need to pass needed legislation in a bi-partisan fashion and ensure that the laws passed by Congress “are being faithfully executed by the executive branch.” With regard to congressional oversight, Grassley expects such oversight to “play a key role in guiding committee work and also hold accountable the federal agencies and departments within the committee’s jurisdiction.”

On trade, the senior senator from Iowa highlighted his long-standing commitment to “free and fair trade policies that open up foreign markets to U.S. exports,” noting for example that he has supported every free trade agreement negotiated by the United States and will continue to work with the Trump administration on the implementation of the U.S.-Mexico-Canada Agreement. While Grassley agrees with President Trump that the United States must have fair trade deals that benefit Americans, he opposes alienating U.S. allies “with tariffs disguised as national security protections” especially if they target trade in automobiles and automotive parts. Accordingly, Grassley intends to review the president’s use of Section 232 of the Trade Act of 1962, which grants the executive branch broad legal authority to impose tariffs in the name of national security.  

While Grassley admitted he is “not fond of the Section 301 tariffs on products from China,” he nonetheless agrees with the logic behind the tariffs and will continue to engage with the administration in hopes that the on-going negotiations with mainland China “will result in a change in China’s discriminatory policies and practices and an easing of tariffs and tensions.” Grassley also expressed interest in working closely with the administration and U.S. allies “to strengthen the ability of the WTO to more effectively meet the demands of our global economy.”

In a more wide-ranging extemporaneous press briefing held on 9 January, Grassley said he would advise President Trump to take a hard line with congressional Democrats who have demanded renegotiation of the USMCA, especially its labour and environmental provisions. Grassley indicated he could support side letters to clarify positions or provide more details on these provisions. Enforcement concerns can also be addressed by Congress and the administration, he added. However, Grassley does not believe any of these issues should hold up ratification of the agreement. He added that if the Democrats reach “the point where you got to go back to the negotiating table, I would encourage the president to pull out of NAFTA and hope that they are smart enough not to let that happen.”

The administration has not yet sent the USMCA implementing legislation to Congress, nor has the U.S. International Trade Commission completed its required study of the agreement’s probable economic effects. This report is required for the USMCA to receive the expedited congressional consideration provided under the trade promotion authority law. Sources state that the report could be finished on time if the partial shutdown of the federal government ends soon but could be pushed back if it continues, especially if the USITC uses the full 105 days available. Any delay in the USITC report could then postpone congressional consideration of the agreement.

Grassley would especially like to see the additional Section 232 tariffs on steel and aluminium removed for Mexican and Canadian products. Both countries have imposed retaliatory tariffs on selected U.S. products and Grassley is concerned that Mexican tariffs on pork products are hurting Iowa farmers. He noted that agricultural support for any trade agreement is crucial because farm organisations have a long record of mobilising their members for legislative success, especially regarding the passage of free trade agreements.

Grassley had also met with European Union chief trade negotiator Cecilia Malmström on 9 January.  In response to a question about the possibility of omitting agricultural products from a U.S.-EU trade agreement, Grassley told reporters that “I don’t know how anybody in Europe that wants a free trade agreement with us can expect it to get through the United States Senate if you don’t want to negotiate agriculture.” When asked to comment on a Bloomberg News article that suggested Trump would use his upcoming state of the Union address to push for more authority to impose tariffs on imports, Grassley replied that “we aren’t going to give him any greater authority” because “we’ve already delegated too much.”

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