December 2019 Government Affairs

U.S.-China Trade Deal Could Come After Presidential Election

President Trump told reporters at the NATO summit in London last week that the United States has no deadline to complete a trade deal with China, and that an agreement might not happen until after the 2020 election in November. The president said that the deal has to be right for the United States before the administration moves forward.

Trade officials familiar with the talks said that the two countries have made progress but are still negotiating over whether existing U.S. tariffs will be removed and over specific levels of Chinese purchases of U.S. agricultural products as part of a “phase one” trade deal. China is reportedly demanding that the United States rescind the 15% tariffs on “List 4” imports, which went into effect on Sept. 1, 2019.

President Trump to Reinstate Steel and Aluminum Tariffs on Argentina and Brazil

On Dec. 2, President Trump and his administration will reinstate Section 232 tariffs on steel and aluminum imports from Argentina and Brazil. These two countries had previously been excluded from Section 232 tariffs after agreeing to import quotas in 2018. The president cited currency devaluation by both countries as the reason for his decision. He did not say when the tariffs would go into effect.

Top House Ways and Means Republican Says Year End-Tax Bill Possible

The House Ways and Means Committee Ranking Member Kevin Brady (R-TX) told reporters last month that there is a decent chance Congress can pass a year-end tax bill if Democrats are willing to keep the package “relatively tight.”

Brady said that a tax bill, which renewed some extenders and included a few corrections to the 2017 Tax Cuts and Jobs Act (TCJA), could possibility pass both chambers by the end of the year. With the federal government due to run out of funding by Dec. 20, there have been discussions in Congress about including tax legislation in a potential year-end spending agreement.

Congressional Appropriators Optimistic About Spending Negotiations  

House Appropriations Committee Chairwoman Nita Lowey (D-NY) told reporters she is optimistic that Congress will be able to pass a long-term spending agreement to fund the government by next week’s deadline. Last month, Congress passed a Continuing Resolution (CR), which kept the government funded at current levels through Dec. 20 as both chambers struggled to come to an agreement on a spending deal for the remainder of fiscal year 2020.

According to Democratic leaders, Republicans’ demands for increased border wall funding continue to be a “major impediment” in the negotiations. Both the House and Senate have yet to pass all 12 appropriations bills required to annually fund the government. If there is no comprehensive agreement by the Dec. 20 deadline, Congress is expected to pass another short-term CR in order to avoid a government shutdown.

Trump Administration and Democrats Close to USMCA Agreement

The Trump administration and congressional Democrats are reportedly close to reaching a deal, which would pave the way for ratification of the United States-Mexico-Canada Agreement (USMCA) on North American trade. Richard Trumka, president of the powerful labor group AFL-CIO, told the Washington Post on Monday that there is an agreement in place on key labor enforcement provisions and that he would be meeting with AFL-CIO’s executive committee to gauge its approval. 

Concerns over USMCA’s labor enforcement provisions have been the biggest hurdle in the negotiations between the Trump administration and congressional Democrats so an agreement on these provisions bodes well for eventual ratification of the USMCA. Once a deal is in place, the president has to officially submit legislative text to Congress where both chambers will have 90 days to vote on passage.