With help from Doug Palmer and Megan Cassella
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— President Donald Trump partially delayed his escalation of tariffs on a wide range of Chinese imports until later this year, lessening chances U.S. consumers will feel the impact during the holiday shopping season.
— A new study finds that countries that want to impose tariffs on electronic transmissions could see bigger losses to their economy compared to any gain from tariff revenue.
— Arizona’s senators are sending a bipartisan appeal to the Commerce Department to reverse course on a tomato trade agreement they argue would lead to job losses in Arizona.
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TRUMP SAVES CHRISTMAS FROM HIS OWN TARIFFS: In a seeming acknowledgment that his tariffs affect U.S. consumers, Trump on Tuesday postponed until Dec. 15 new tariffs on Chinese goods like computers, clothes, smartphones and other consumer items “so that they won’t be relevant for the Christmas shopping season.”
The administration’s delay on imposing a 10 percent tariff would apply to a list of Chinese imports worth $155 billion. Phones ($39.9 billion), laptops ($39.1 billion) and toys and games ($21.3 billion) represent the top categories of products, according to Panjiva, S&P Global Market Intelligence.
The list of goods that are still scheduled to be hit with a tariff on Sept. 1 are valued at nearly $110 billion, the research group found.
And the Fourth of July (for now): The list of items that got a temporary reprieve include fireworks, eliciting a cheer from the National Fireworks Association. “Fireworks importers, distributors, and retailers are small family-run businesses who operate seasonally and can’t afford any costs of doing business,” said the group’s secretary, Steve Houser.
Two major fireworks companies, Fireworks by Grucci and Phantom Fireworks, teamed up last month to donate $750,000 worth of services and material for Trump’s July 4th “Salute to America” show on the National Mall. “Our hope is the President finally excludes fireworks from tariffs altogether. It’s not right to ask Americans to pay a boom tax when we celebrate our Nation’s birthday,” Houser said.
How USTR broke it down: The list of imports that will be hit by tariffs on Sept. 1 are products where less than 75 percent of 2018 U.S. imports came from China. The Dec. 15 list contains products where the U.S. in 2018 imported 75 percent or more of from China, according to a White House communication obtained by Morning Trade. USTR didn’t return a request for comment on how the lists were divided.
The U.S. Trade Representative’s Office also removed products from the list based on health, safety, national security and other factors. A USTR spokesman said those items covered 25 product categories, including car seats, shipping containers, cranes for ports, certain types of fish and Bibles and other religious literature.
A ‘productive’ call: U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke this week with their Chinese counterparts, which Trump said was a “very good talk.”
“A very, very productive call. I think they want to do something. I think they’d like to do something dramatic. I was not sure whether or not they wanted to wait until a Democrat has a chance to get in,” he said to reporters on Tuesday.
He again asserted that China “would really like to make a deal,” even though the two sides have not yet come to an agreement in the on-again, off-again negotiations dating to the early days of his administration in 2017.
HUAWEI ON K STREET: Blacklisted Chinese telecommunications firm Huawei hired longtime GOP lobbyist Michael Esposito, the founder and president of Federal Advocates, to lobby for the company on telecom issues before the Trump administration, according to new disclosure documents. Esposito serves on an advisory board to the chair of the Republican National Committee and as a member of the Trump Victory Finance Committee. He declined to comment when asked by POLITICO to elaborate on his work on behalf of Huawei.
STUDY: MORE LOSS THAN GAIN FROM TARIFFS ON DATA TRANSMISSIONS: A new study is warning that countries considering tariffs on digital transmissions could lose more in GDP than they would generate from tariff revenue. The report from the European Centre for International Political Economy, a Brussels-based think tank, is already being cited as evidence to support the continuation of a World Trade Organization moratorium against tariffs on international electronic transmissions.
Developing countries like Indonesia, India and South Africa are looking more seriously at implementing digital transmission tariffs, which could impose import duties on streaming services and other Internet traffic. The ECIPE study found that Indonesia, which has already established but not enacted a digital transmission tariff, could lose up to 160 times as much GDP as it would collect in tariffs. The future of the WTO moratorium and the ability of countries to impose tariffs on digital transmissions could become a major point of debate leading up to the next ministerial meeting in 2020.
ARIZONA SENATORS PAN COMMERCE’S TOMATO PROPOSAL: Arizona Sens. Martha McSally and Kyrsten Sinema raised complaints about a proposed agreement from the Commerce Department to suspend an anti-dumping investigation on imports of tomatoes from Mexico.
The lawmakers in an Aug. 13 letter to Commerce Secretary Wilbur Ross argue that a requirement to inspect every shipment of Mexican tomatoes at the border would act as a barrier to trade and invite retaliation that would hurt jobs in Arizona. The senators also say the proposal would infringe upon statutory and contractual rights of U.S. companies that buy and sell Mexican tomatoes to be compensated for any rejected shipments.
TRUMP RANTS ABOUT TRADE DEFICIT WITH JAPAN: The president went off on one of his favorite topics — the U.S. trade deficit with Japan — during a speech Tuesday that was supposed to focus on energy policy but veered into many other topics.
“They send us thousands and thousands — millions of cars, we send them wheat. Wheat. That’s not a good deal,” Trump said at a Shell petrochemical plant being built outside of Pittsburgh. “And they don’t even want our wheat, they do it because they want us to at least feel that we’re OK, you know, they do it to make us feel good.”
The remarks come as the United States and Japan are trying to reach a deal on agriculture and autos before the United Nations General Assembly meeting in late September. Trump and Japanese Prime Minister Shinzo Abe will also meet at the G-7 summit in France from Aug. 24-26.
CHINA PLANS SECOND INTERNATIONAL IMPORT EXPO IN NOVEMBER: Companies hoping to get a bigger share of the Chinese import market are expected to flock to Shanghai in November, when the country will host its second annual International Import Expo. U.S. exports to China fell to about $52 billion in the first half of 2019, from $64 billion in the same period last year, amid the ongoing trade war between the two world’s largest economies.
COMMERCE SETS FINAL AD DUTIES ON MEXICAN KEGS: Your next summer blowout could cost a little more after the Commerce Department on Tuesday set a nearly 18.5 percent final anti-dumping duty on imports of refillable stainless steel kegs from Mexico. The U.S. imported about $13.4 billion of the kegs in 2018.
— U.S. businesses are pulling back on hiring as companies see no end in sight to the trade war, The Washington Post reports.
— Koch Industries funded a centrist think tank to change Democratic views on trade, The Intercept reports.
— GM and Ford prepare for a possible economic downturn caused by worsening trade tensions, Reuters reports.
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