| | | | |  | | By Ari Hawkins and Doug Palmer | Presented by the National Foreign Trade Council (NFTC) | | | | | — The Office of the U.S. Trade Representative said its annual National Trade Estimate report better reflects its congressional mandate, as business groups accuse the Biden administration of ceding U.S. leadership on digital trade. — Transportation Secretary Pete Buttigieg said efforts to reopen the vital shipping lanes at the Port of Baltimore are underway, but did not provide a timeline. — The Alliance for Automotive Innovation is advising the Biden administration against the sale of U.S. Steel to its domestic rival Cleveland-Cliffs, citing climate commitments, should a proposed sale to a Japanese company fall through. It’s Monday, April 1. Welcome to Morning Trade! It's the trade team’s favorite holiday, which happens to coincide with a decision to impose 700 percent tariffs on all American imports … Just kidding! Stay vigilant out there today, dear readers. Got some trade news to share? Reach us at: ahawkins@politico.com, gbade@politico.com and dpalmer@politico.co m. You can also follow us on X: @_AriHawkins, @GavinBade and @tradereporter.
| | | | A message from the National Foreign Trade Council (NFTC): At the U.S.-EU Trade and Technology Council (TTC) this week, the Biden Administration has an opportunity to stand up for American job creators by pressing for alignment around an open, global digital economy and pushing the European Union to reject policies that discriminate against U.S. companies. Learn more about how a shared transatlantic economic agenda that addresses the EU’s discriminatory practices supports more than 18 million American jobs and bolsters U.S. national security HERE. | | | | | | | 
U.S. Trade Representative Katherine Tai said her agency's annual report on trade barriers exceeded its statutory purpose by calling out other countries' actions that are valid exercises of sovereign policy authority. | Jeff Chiu/AP | DIGITAL DIVIDE DEEPENS: USTR Katherine Tai defended the office’s new National Trade Estimate report released Friday, which she said more closely reflected its congressional mandate. The report drew immediate criticism from business groups, which said the agency under the Biden administration is undermining U.S. leadership over digital trade. What’s new in 2024? This year's report refers to trade barriers as “government measures that unduly impede the international exchange of goods and services.” In 2023, the annual report categorized those barriers as any action from a government that restricts trade, investment and cross-border data flows, among others. Fewer digital trade barriers: In one notable change, USTR reduced the number of trading partners where it found digital trade barriers by more than a dozen in the 2024 report, from about 38 in the 2023 report. A precise comparison is difficult though because sometimes USTR mentions “digital” issues under other headings, such as intellectual property. Still, the countries where USTR no longer has a distinctly-labeled digital trade barrier section include Australia, Brazil, Brunei, Ecuador, Israel, Japan, Jordan, Laos, Malaysia, Mexico, Norway, Panama, Philippines, South Africa and Switzerland. On the other hand, they listed a digital trade barrier in one country, El Salvador, that was not listed in 2023. Fewer local content concerns: Similarly, the report lists only four countries — China, Ghana, Laos and Ukraine — where it still has concerns about “local content” policies that favor domestic companies at the expense of foreign suppliers. That’s down from 19 last year. USTR dropped local content concerns that it included in its 2023 edition for Algeria, Argentina, Australia, Brazil, Brunei, Côte d’Ivoire, Honduras, India, Indonesia, Kenya, South Korea, Nigeria, Russia, South Africa and the United Arab Emirates. Such policies often take the form of government procurement or foreign investment or market access requirements. “It’s clear there’s a de-emphasis on local content and data localization,” an industry official said, speaking on condition of anonymity. “While the report still lists some barriers, USTR has removed critical language setting U.S. intentions to address these policies and detailing important context around the high stakes for the U.S. if these policies persist.” Defending the new approach: A U.S. trade official, who also spoke on condition of anonymity, said many of the digital barriers were dropped because it was unclear whether they actually raised surveillance or trade agreement compliance concerns that justify a commitment of U.S. resources to try to address. “There will be plenty of measures that businesses don't like; that's not the threshold for including it. We have to have an analysis of why that measure warrants U.S. government action to take it down,” the official said. In addition, in an era when many countries are concerned about non-market competition and underpricing by China, the revamped NTE report simply recognizes that “localization requirements are one way to incentivize supply chain diversification,” the official said. Finally, in USTR’s press release, Tai referred to some past inclusions that the agency now believes went too far in labeling a foreign government action as a trade barrier: Those “include efforts by South Africa to render its economy more equitable in the post-Apartheid era; import licensing requirements for narcotics and explosives; and restrictions on imports of endangered species,” she said.
| | | | Access New York bill updates and Congressional activity in areas that matter to you, and use our exclusive insights to see what’s on the Albany agenda. Learn more. | | | | | Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You’ll also receive daily policy news and other intelligence you need to act on the day’s biggest stories. BALTIMORE PORT REMAINS CLOSED, THREATENING SUPPLY CHAINS: It remains unclear how long it will take to clear debris from the Francis Scott Key Bridge collapse, Transportation Secretary Pete Buttigieg says, but efforts to remove the remains of the bridge and reopen the vital shipping lanes at the Port of Baltimore — are underway. “We haven't received a timeline yet, but what I can tell you is the work is now underway,” Buttigieg said Sunday during an interview on CBS’ “Face the Nation,” referring to the bridge reopening. Reminder: The bridge collapsed early Tuesday morning when a cargo ship slammed into a key support pillar. The suspension of traffic at the port, one of the busiest in the U.S. for car shipments, threatens to disrupt the flow of a range of goods. In the short term, congestion could increase at ports all across the country, and shippers and port authorities are already starting to adjust. Ford and General Motors, for instance, both said they would need to divert shipments to other ports during the closure. The bridge collapse also cut off access to two terminals operated by coal supplier CONSOL Energy and freight rail firm CSX. For now — don’t panic: “There’s been some resilience that’s been built into the supply chain after some companies recalibrated during Covid-19,” K. Venkatesh Prasad, head of research at the Center for Automotive Research told Morning Trade, pointing to a roughly three month buffer period before snags reverberate across the supply chain in a major way.
| | | | A message from the National Foreign Trade Council (NFTC):   | | | AUTOMAKERS FLAG CLIMATE THREAT: A group representing major automotive companies sent a warning flare to the White House on Friday, advising against the sale of U.S. Steel to its domestic rival Cleveland-Cliffs should its sale to Japan’s Nippon Steel fall through. “Beyond the antitrust implications, this move would expose the broader manufacturing sector to possible supply chain interruptions or shortages – disruptions that could undermine the administration’s signature initiatives,” John Bozzella, the president and CEO of the Alliance for Automotive Innovation, said in a letter to top White House economic adviser Lael Brainard, underscoring potential threats to Biden’s climate agenda. One step back: Biden said last month that he opposed the Nippon deal, which is under a national security review. Cleveland-Cliffs — which U.S. Steel reportedly turned down as a buyer last year — has been mobilizing against the Nippon Steel acquisition on Capitol Hill. According to The Wall Street Journal, the Biden administration considered negotiating a deal between Cleveland-Cliffs as an alternative, but ultimately decided against it. MOLINA SHARES VIEW ON DISPUTE SETTLEMENT REFORM: World Trade Organization members have a tough task ahead as they strive to fix their broken dispute settlement system, and reconcile the different views of the United States and other members such as the European Union, a key former official said in an interview. However, they made substantial progress over the past year in exploring “a third way” to resolve disputes, said Marco Molina, Guatemala’s former deputy permanent representative to the WTO. Doug and Camille Gijs have more here. U.S. TO CRACK DOWN ON HONG KONG: The Biden administration is imposing new visa restrictions on Hong Kong officials after the city fast-tracked legislation that could severely stifle open discussion and dissent, Secretary of State Antony Blinken said Friday. The measures come amid concerns China is escalating its campaign to crack down on activists abroad.
| | | | SUBSCRIBE TO GLOBAL PLAYBOOK: Don’t miss out on POLITICO’s Global Playbook, the newsletter taking you inside pivotal discussions at the most influential gatherings in the world, including WEF in Davos, Milken Global in Beverly Hills, to UNGA in NYC and many more. Suzanne Lynch delivers the world's elite and influential moments directly to you. Stay in the global loop. SUBSCRIBE NOW. | | | | | | | | | — About one-third of more than 300 Chinese entities BIS placed on its Entity List were added because they bolstered Russia’s industrial base, said Commerce Undersecretary for Industry and Security Alan Estevez. — U.S., Japan, Philippines plan joint South China Sea naval patrols, POLITICO reports. — Space is the new ‘Wild West.’ The EU is dying to step in and regulate, POLITICO reports. — Japan and EU to develop cutting-edge materials for chips and EVs, per Nikkei Asia. THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: dpalmer@politico.com, gbade@politico.com and ahawkins@politico.com. Follow us @POLITICOPro and @Morning_Trade.
| | | | A message from the National Foreign Trade Council (NFTC): With the last U.S.-EU TTC meeting approaching, time is running out for the Biden Administration to stand up for American businesses. The upcoming meetings in Europe present a unique platform for senior U.S. officials to strengthen the transatlantic relationship while strongly opposing discriminatory policies that undermine our shared values, competitiveness and national security.
Decades of bipartisan U.S. trade leadership have enabled American innovators and small businesses, across nearly every sector of the economy, to succeed in the digitally-enabled global marketplace. It’s important for the Biden Administration to signal that it has American innovators’ backs and work with Europe to reject protectionist policies that favor European companies and global competitors in countries like China at the expense of U.S. businesses.
Discover why more aggressive U.S. international economic leadership is critical to national security and the global success of millions of American – and European – small businesses HERE. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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