Last week, global trade leaders gathered in Wisconsin for a critical world commerce meeting. U.S. Trade Representative Jamieson Greer met with counterparts for the first time since the Trump Administration put sweeping tariffs on dozens of these trade partners. As Representative Greer referred to in his remarks, “Consider that it was back in 2016 that the leaders of all our countries committed at the G20 to address excess industrial capacity. It has been ten years—excess industrial capacity is an even greater distortion in the global economy now than it was then. This is why, starting last year, the United States took action, using a combination of tariffs and bilateral deals to reduce our trade deficit, make resilient our supply chains, and bring fairness, reciprocity, and balance to the global economy…”
“Excess industrial capacity” was a key issue for Greer as he headed into this meeting. Thursday, leaders had not been able to reach an agreement regarding this issue. Representative Greer said while no deal was reached, the meeting was still productive, saying, “Nearly all countries agreed that this is an issue that required action. And nearly all countries agreed that our current system of trade remedies and responses is inadequate to solve this problem.”
The White House has accused trading partners of producing such a large swath of goods that it surpasses demand. The Administration claims this is bringing prices down and skewing the competition. It also believes China is the leading offender of this, but has also opened investigations into Norway and Bangladesh.
Steel was one of the top commodities in discussion last week, leading to members of the Global Forum on Steel Excess Capacity to release the “Milwaukee Framework.” The pledge includes a promise to “develop and enhance supply chain transparency through the collection and publication of steel trade data, including ‘country of melt and pour.’”
This wasn’t the only issue on display in Milwaukee last week. The unrenewed USMCA (U.S.-Mexico-Canada Agreement) brought in a fresh swath of tensions between trade leaders from the U.S. and Canada.
Greer said those issues remain unresolved: “The reality is there are a handful of outstanding issues that are quite difficult to resolve…”
This all was happening while on the East Coast, Trump Administration attorneys were appearing in a trade court in New York, arguing the validity of its Section 301 tariffs. These tariffs can be implemented due to the Trade Act of 1974 and allow the administration to investigate unfair trade practices and impose tariffs if it finds that American businesses were harmed. In a series of lawsuits filed by small businesses, they argue the White House didn’t have the evidence required by the law to justify these duties.
Presidents from both parties have implemented 301 tariffs, including on countries such as China. At one point in Wednesday’s hearing, the three-judge panel at the U.S. Court of International Trade considered sending the matter back to Trade Representative Greer to retry its investigation and tariffs.
This is the third time in less than two years Trump’s attorneys have been fighting the legality of the president’s tariffs. The U.S. Court of International Trade also did not say when it intends to rule on these tariffs.