— The week ahead could be consequential for USMCA passage as the Trump administration is now legally entitled to submit implementing legislation.
— A data flow agreement between the U.S. and EU is under fire again as the European Court of Justice prepares to hear arguments this week that it’s violating European privacy.
— Senior U.S. and Chinese officials will speak this week to continue talks “in earnest,” but President Donald Trump is keeping the tariff threat against Beijing alive.
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Trump Could Submit USMCA Bill This Week: The Trump administration could send its implementing bill for the U.S.-Mexico-Canada Agreement to Congress as early this week, now that more than 30 days have passed since the draft statement of administrative action was submitted on May 30.
The Office of the U.S. Trade Representative did not respond to an email asking about its plans. While the bill technically could have been submitted last week, lawmakers were away for the July Fourth break and Trump was focused on his “Salute to America” event at the Lincoln Memorial.
Pressure builds: The Trump administration has long aimed to have USMCA ratified in Congress before the August recess. But with 12 legislative days left and Democratic concerns unresolved, that window looks unlikely.
Problems with Pelosi: If the White House does submit the bill this week, that would likely provoke a fight with House Speaker Nancy Pelosi, who has warned the administration not to send the legislation before addressing issues her caucus has raised with the labor, environmental, pharmaceutical and enforcement provisions of the pact.
The California Democrat had already criticized the administration’s move to submit the draft statement and final legal text in May as “not a positive step.” However, U.S. Trade Representative Robert Lighthizer wrote to Pelosi in a letter with the draft statement that its submission would not impact the content of the deal’s final implementing language or binding text.
He noted in the letter that the draft was only to “ensure that Congress will have sufficient time to consider the USMCA before the August recess if the leadership deems that appropriate.”
Flashback: Pelosi could do what she did in 2008, when President George W. Bush submitted the implementing bill for a Colombia free trade agreement over her objections: block action by pushing through a rule change to turn off the Trade Promotion Authority’s requirement that Congress vote on the pact within 90 days of receiving it from Trump.
That, in turn, could destroy TPA’s effectiveness for any future agreements, since its main benefit is that it allows the White House to negotiate trade deals that Congress must approve or reject, without making any changes, within 90 days of receiving them.
EU-U.S. Data Agrement In Jeorpady: A data transfer agreement between the European Union and the U.S. could come under legal threat again as EU litigant Max Schrems brings new arguments that U.S. national security agencies have extensive access to Europeans’ digital information.
What’s at stake? The case will center on the legality of so-called standard contractual clauses, complex legal mechanisms that allow thousands of companies to move data freely from Europe to the U.S., Asia and elsewhere. The agreements are used by companies from Google to General Electric to transfer digital information among their various hubs worldwide covering everything from social media posts to payroll information.
On Tuesday, the European Court of Justice will hear new arguments from Schrems, an Austrian activist who brought the data sharing agreement to a halt in 2013 following revelations by former National Security Agency contractor Edward Snowden. The European Commission and industry groups argue the agreements provide sufficient guarantees for EU citizens. A final decision is expected some time next year. POLITICO Europe’s Mark Scott and Laura Kayali have the story.
U.S.-China Call Expected This Week: Lighthizer and Treasury Secretary Steven Mnuchin hope to speak by phone this week with Chinese Vice Premier Liu He, a USTR spokesperson told Morning Trade.
That follows White House chief economic adviser Larry Kudlow’s remark Wednesday that the previously interrupted negotiations would “continue in earnest” this week.
Tariffs still on the table: Trump indicated Friday that imposing more tariffs on Chinese goods is still very much alive, if the two sides can’t reach an agreement. “We had a deal, and they broke it. … I think if they had it to do again, they wouldn’t. Because, right now, we put very big tariffs on, and we have a lot more to put on if we want,” Trump said.
But China says they’ve got to go: There was also a tough message out of Beijing. Chinese Commerce Ministry spokesperson Gao Feng said “all imposed tariffs must be removed” for the two sides to reach a deal, noting that “China’s attitude on that is clear and consistent.”
Fireworks, Tariffs & Trump: Two companies, Fireworks by Grucci and Phantom Fireworks, which would have been hit hard by Trump’s plan to impose a 25 percent tariff on another $300 billion worth of goods, teamed up to provide a free July Fourth fireworks display for Trump’s “Salute to America” show on Friday.
William Weimer, vice president at Phantom Fireworks, told Morning Trade his company donated $500,000 to Grucci to help cover costs. Weimer said those discussions began in March, before Trump announced that he intended to hit almost all remaining Chinese goods with a 25 percent duty. Trump put those plans on hold after each country agreed to resume negotiations during last month’s G-20 leaders summit.
Major supplier: In a June 14 filing with USTR, Weimer said Phantom imports 98.5 percent of the fireworks that it sells from China and that it would be impossible to replace them from other suppliers. It makes little sense to impose a “protectionist” tariff on Chinese fireworks because fireworks are not made in the U.S., Weimer told Morning Trade.
A spokesperson for Fireworks by Grucci estimated the cost of Friday’s show at $750,000, which included $250,000 worth of services and fireworks the company provided. The donation agreement was finalized on June 20, she said. Grucci also performed for Trump’s inauguration. That show was not donated, the spokesperson said.
Chinese Steel Wheels Won’t Be Rolling: The Commerce Department last week announced final anti-dumping and countervailing duties on imports of certain types of steel wheels from China. The products will be hit with anti-dumping duties ranging from of 38.27 to 44.35 percent. Commerce also finalized countervailing duties ranging from exporters 386.45 to 388.31 percent. The U.S. International Trade Commission will make a final injury determination around Aug. 15
Magnesium From Israel: Commerce also made a preliminary determination on dumping margins on imports of magnesium from Israel. Preliminary duties were calculated at more than 193 percent. Imports of magnesium from Israel in 2018 were valued at an estimated $38.9 million.
— Mexico is working closely with the U.S. to try to close a dispute settlement loophole in USMCA, Reuters reports.
— African leaders launch a 55-nation trading bloc covering 1.3 billion people and $3.4 trillion in trade, Reuters reports.
— The U.S. added India to its steel tariff dispute at the WTO, Reuters reports.
— Trump’s tariffs have sped the decline of some of the steel mills he vowed to save, Bloomberg reports.