Commerce aide: Auto probe decision could come in ‘weeks’

With help from Doug Palmer, Megan Cassella and Hans von der Burchard

COMMERCE AIDE: AUTO PROBE DECISION COULD COME IN ‘WEEKS’: A senior Commerce Department official wrapped up a daylong hearing on whether to impose tariffs or other import restrictions on autos and auto parts by indicating a decision could come soon.

“We will, in the coming weeks, conduct a thorough, fair and transparent investigation that takes into account all the relevant facts, all the input from stakeholders, all the economic analysis that’s been provided to us before reaching a final determination,” Nazak Nikakhtar, assistant secretary of Commerce for industry and analysis, said at the close of the hearing.

Commerce Secretary Wilbur Ross launched the Section 232 investigation on May 23; under the statute, the department has until Feb. 17, 2019, to complete the probe and give recommendations to President Donald Trump. However, that would delay any presidential action until after the midterm elections, which is the opposite of what Trump wants.

What they said: Industry witnesses, including parts manufacturers and two major auto associations representing both domestic and foreign brand companies, urged the department not to determine that auto and auto imports pose a national security threat. Major trading partners such as the EU and Canada warned the United States that it could face retaliation on potentially hundreds of billions of dollars’ worth of exports if Trump hits their auto and auto part exports with new duties.

Foreign officials from Mexico, the province of Ontario, Turkey, Japan, South Korea, Malaysia, South Africa and Taiwan also made their case for why their exports should not be hit with duties. U.S. officials had no questions for the foreign witnesses, but were told the Trump administration valued their testimony and good relations with their countries. “We will absolutely take each and every one of your points into serious consideration,” a Commerce official said.

To read more about the hearing, click here.

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TOOMEY LOOMS LARGE OVER EX-IM’S FUTURE: Kimberly Reed, Trump’s pick to lead the Export-Import Bank, sailed through her confirmation hearing before the Senate Banking Committee on Thursday — unlike original pick Scott Garrett, whose nomination was ultimately rejected late last year.

Reed did not draw fire from a single senator, including Sen. Pat Toomey (R-Pa.), a staunch Ex-Im opponent who could soon become chairman of the committee. “I may support her,” Toomey told Pro Financial Services’ Zachary Warmbrodt after the hearing.

But it could still be an uphill battle until Ex-Im is back on its feet with a full quorum able to approve deals worth more than $10 million. Toomey, who has described Ex-Im as a form of corporate welfare, said in an interview after the hearing that he was going to continue the hold he has on nominees to serve on the agency’s board.

“I am not going to support restoring a quorum at this point,” he said. “I might support her because as president she could begin implementing important reforms. A quorum would allow the bank to just go back to business as usual and engage in large-scale transactions.” Read the full story here.

ERNST KNOCKS NAVARRO: TARIFFS HAVE REAL EFFECTS: Iowa Republican Sen. Joni Ernst took White House trade adviser Peter Navarro to task on Thursday for his comments dismissing the economic impact of the China trade war as a “rounding error,” saying they “disregard the people whose livelihoods depend on global trade.”

“In Iowa alone, more than 456,000 jobs are supported by trade, and these new tariffs are threatening $977 million in state exports. That is no ‘rounding error,’” she said in a statement. “Those are real people – Iowans – who are waiting for terms to be negotiated, for new deals to be finalized. We need to lessen the pressure on these hard-working farmers, and let them sell their goods.”

Her comments came just a few hours after Navarro and Kevin Hassett, chairman of the White House Council of Economic Advisers, sought to downplay the effects of the tariffs in back-to-back interviews on CNBC.

“My point is that it’s much less disruptive than these headlines would suggest,” Navarro said, “and it’s much more constructive as we see the adjustments made in terms of where investment is going to go and where we’re going to build.” More here.

MALMSTRÖM: PLURILATERAL CAR DEAL NO EASY FIX TO TRADE TENSIONS: EU trade Commissioner Cecilia Malmström on Thursday cast doubt on whether a plurilateral deal on cars could solve trade tensions with Trump. “This is one of many” proposals that European Commission President Jean-Claude Juncker will bring to Washington, she said. “For it to work, you would have to include the mass” of car-producing countries worldwide, she argued. “I don’t know if they do.”

Malmström excluded the option of unilaterally cutting car tariffs with the U.S. because such reductions would have to be shared with other countries, producing “a lot of free-riders.”

Malmström also criticized recent U.S. actions, such as the metal tariffs and the blockage of the World Trade Organization’s Appellate Body, saying they “undermine decades of U.S. foreign policy and Western partnership.” Speaking at an event organized by the German Marshall Fund of the United States, she said that “the EU-U.S. relationship is essential to the stability of trade flows” worldwide and provided 15 million jobs on both sides of the Atlantic.

Using national security as a justification to impose tariffs is deeply wrong, Malmström warned: It’s a “link that will only serve to make us both poorer and weaker,” she said. Read the commissioner’s entire speech here.

BRADY SAYS MEXICO FIRST: House Ways and Means Chairman Kevin Brady said the Trump administration is pursuing an agreement with Mexico first in NAFTA talks but hasn’t decided if or how Canada fits into those discussions.

“Ultimately whether that will be a bilateral or Canada will join those discussions and make it a trilateral as it is today – I think they’re reserving that decision based on how Canada or if Canada comes to the table on NAFTA,” Brady told reporters on Thursday.

Mexican Economy Secretary Ildefonso Guajardo is traveling to Washington to meet with U.S. Trade Representative Robert Lighthizer on July 26. On Wednesday, Trump reiterated that the U.S. may reach a new NAFTA agreement with Mexico first.

Brady said he and other lawmakers think a final deal to overhaul NAFTA “ought to be done with both Canada and Mexico by the end of the year at the latest.”

China talks stalled: Brady also said that to his knowledge, “no discussions are occurring and no discussions are planned“ with Beijing.

“Unless we are settling in for a very long, protracted trade war with China, I think it is important for our two leaders, President Trump and President Xi, to meet and to craft a trade relationship that is fair and levels the playing field,” he said.

GOOGLE LOOMS OVER TRADE TALKS WITH EU: Brussels was already expecting that the European Commission’s announcement that it will levy a $5.1 billion antitrust fine on Google could complicate U.S.-EU trade talks next week. Trump confirmed such suspicions on Thursday when he fired off a furious tweet: “I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google,” the president wrote. “They truly have taken advantage of the U.S., but not for long!”

DEMOCRATIC GROUP TAKES THE TRADE WAR TO THE MIDTERMS: Democratic super PAC American Bridge is launching a push to force Republican candidates answer to criticism that by aligning themselves with Trump’s trade policies — or at least implicitly, by declining to push back against them — they are effectively leaving voters behind.

Called Trade War Watch, the effort will release a series of digital campaign ads targeting vulnerable Republicans for, as they say, “failing to stand up to Trump’s trade war.” That effort began Thursday with ads targeting Senate candidate Josh Hawley, who is running to unseat Democratic Sen. Claire McCaskill in Missouri, and Kentucky GOP Rep. Andy Barr.

“Republican candidates have effectively abandoned the voters they are campaigning to represent — standing by Trump’s disastrous trade war as farmers, manufacturers, and small businesses in their communities are hurt,” American Bridge spokesperson Amelia Penniman said in a statement announcing the effort. “Trade War Watch will keep a running tab of the casualties of the trade war to make clear to voters that Republicans are not on their side.”

POLL: ROUGHLY HALF OF AMERICANS OPPOSE TARIFFS: Nearly half, or 49 percent, of Americans feel that tariffs on imported goods will be bad for the country, a new Pew Research Center poll found. The survey, conducted July 11-15 among 1,007 respondents, also found that the idea of tariffs was deeply polarizing: Nearly three-fourths, or 73 percent, of Republicans and Republican-leading Independents who responded said they felt increased tariffs would benefit the country, while roughly the same percentage — or 77 percent — of Democrats and Democratic-leaning Independents felt the opposite.

Overall, four in 10 respondents said tariffs would be good for the U.S., while 11 percent said they did not know.

A widening gap: Pew said that the divide between Democrats and Republicans was even more stark than it was in May, when pollsters asked whether the proposal to increase tariffs on steel and aluminum would be good or bad. In that survey, 58 percent of GOP respondents said it would help while 63 percent of Democrats said it would hurt.

The responses also differed by education level, Pew found. More than half, or 56 percent, of college-educated respondents said tariffs would be bad, versus 38 percent who thought they would be good. But those without a college degree were split as to the effects of the tariffs.

INTERNATIONAL OVERNIGHT

— South Korea and Canada discussed how to put up a united front against potential U.S. auto tariffs, Yonhap reports.

— Trump’s tariffs are imperiling a hometown business in South Carolina — BMW, The New York Times reports.

— It will take years to repair the damage caused by Trump’s trade policies, Bloomberg Businessweek reports.

— Canadian Foreign Minister Chrystia Freeland and other ministers are heading to Mexico next week to talk to the incoming government, iPolitics reports.

— Congress is poised to approve legislation that would toughen foreign investment reviews, The Wall Street Journal reports.

— Canada downplays Trump’s comments on wanting to split NAFTA up, Reuters reports.

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