VI Bi-weekly Legislative Update – Increased Push to Pass USMCA & Concerns Over Tariffs

Pushes to Pass USCMA Intensify

Pushes for the passage of the U.S.-Mexico-Canada Agreement (USMCA) have intensified in the past few weeks. Canadian Prime Minister Justin Trudeau is traveling to Washington this week to meet with President Donald Trump on Thursday. Trudeau plans to also meet with House Speaker Nancy Pelosi (D-NY) and Senate Majority Leader Mitch McConnell (R-KY) to partly focus on the USMCA. Trudeau’s objective is to get a better understanding of the legislative outlook for the USMCA so that he can decide whether to push Parliament to immediately vote on Canada’s USMCA implementation legislation before it adjourns this week. This would require Canada to have to vote before knowing how the Trump administration intends to address House Democrats’ concerns with the trade deal. Mexico is also showing signs of trying to satisfy the U.S. and increase its push for swift ratification of the USMCA after the two countries came to an agreement on immigration.  Several Mexico Senate commissions approved a draft law last week and the full Mexican Senate is scheduled vote Tuesday.

Meanwhile, U.S. House Leadership is signaling it is planning to negotiate with the Administration on USMCA passage. Last week, House Democrats formed a nine-member Trade Working Group to resolve Democratic demands for changing certain parts of the agreement. House Speaker Nancy Pelosi named Reps. Earl Blumenauer (D-OR) and Jan Schakowsky (D-IL) to lead the drug pricing team. Reps. Jimmy Gomez (D-CA) and Mike Thompson (D-CA) will be the labor group. Reps. Suzanne Bonamici (D-OR) and John Larson (D-CT) will work on environmental issues. Reps. Terri Sewell (D-AL) and Rosa DeLauro (D-CT) will work on enforcement. House Ways and Means Chairman Richard Neal (D-MA) will be in charge of the entire working group. This week, United States Trade Representative Robert Lighthizer committed to working with Democrats on their enforcement and labor concerns in the USCMA while appearing before the Senate Finance and House Ways and Means Committees.  The USTR gave a clearer picture on how he intends to work both Democrats and Union leaders to develop a monitoring system that would ensure that Mexico implements the labor reform laws it passed in April and Mexican companies comply with those reforms.  Lighthizer made clear he does not want to rush for a USMCA vote, but would rather collaborate with Democrats to make changes and garner their widespread support for the deal.  These are tough negotiators but their appointments show some progress is occurring.

Continued Concerns Over Presidential Use of Tariffs

Senate Republicans continue to be concerned with President Trump’s use of tariffs and so lawmakers have been exploring ways to restrict presidential Section 232 powers. Sen. Rob Portman (R-OH) has introduced “Trade Security Act of 2019” that has nine cosponsors and Pat Toomey (R-PA) “Bicameral Congressional Trade Authority Act” with 18 bipartisan cosponsors. Both bills also have companion legislation in the House with strong cosponsor support. Senate Finance Chairman Chuck Grassley (R-IA) has said for weeks that he wanted to introduce a veto-proof bill that would rein in the President’s Section 232 powers and may borrow provisions from both the Toomey and Portman bills. At this time, Grassley says he continues to “work with his colleagues on a bill” but has declined to comment on a potential hearing.

“It is important the U.S. stand up to Chinese mercantilism, but ever-escalating tariffs threaten our nation’s long-term economic stability,” the several Senate lawmakers wrote in a June 12 letter to Lighthizer.

More than 300 representatives of companies and trade groups from a wide range of sectors are testifying next week warning the Administration that carrying out the President’s plan to impose tariffs on $300 billion more in Chinese imports will hurt consumers and hamper business growth. The Office of the U.S. Trade Representative’s hearing on potential tariffs started June 14 and runs through June 25. More than 600 companies sent a letter to President Trump this week urging him to negotiate a deal with China rather than move forward with tariffs. The hearing comes as the prospects for negotiations between the U.S. and China are reinvigorated. President Trump and Chinese state media confirmed Tuesday that he and President Xi will meet on the sidelines at the G20 summit at the end of this month.

To see previous legislative updates, click here.