Trump Officials to Probe Produce Imports, Raising the Risk for More Tariffs in 2020
On September 1, the Office of the US Trade Representative, working with the Departments of Commerce (DOC) and of Agriculture (USDA), announced a number of actions aimed at supporting domestic producers of seasonal/perishable produce. Their plans – which include new trade actions targeting certain fruit and vegetable imports – could have widespread impacts on produce prices and in how the US government responds to allegations of unfair subsidies supporting foreign-grown fruits and vegetables.
As part of the report, USTR announced:
Plans to launch a Section 201 global safeguards investigation into imports of blueberries.
Continued bilateral negotiations with Mexico over the next 90 days to address concerns regarding US imports of Mexican strawberries, bell peppers, and other seasonal/perishable products.
USTR’s plans to work with domestic producers to launch an investigation by the US International Trade Commission (ITC) into strawberry and bell pepper imports, which could lead to “expedited” Section 201 investigations on these imports later this year.
DOC and USDA each also pledged to take actions aimed at supporting domestic producers of seasonal/perishable products, including efforts to promote domestic growers and to educate growers on unfair foreign subsidies.
Section 201 investigations are conducted by the ITC, which examines whether domestic industries have been seriously injured or threatened with serious injury as a result of increased imports. Notably, these actions do not require domestic parties to allege any unfair actions by the foreign producer (such as “dumping,” or selling merchandise for less than fair value, or benefiting from unfair foreign government subsidies). If the ITC finds in the affirmative, the President himself will decide what relief, if any, should be imposed. This relief could take the form of tariffs or quotas targeting foreign imports, either of which are almost certain to increase prices of the affected goods.
The joint agency actions comes after years of concerns voiced by domestic industry and congressional stakeholders that existing trade actions do not adequately address concerns with unfair imports of these goods, including as part of negotiations to modernize the North American Free Trade Agreement under its successor deal, the US-Mexico-Canada Agreement now in force.
For sovereign governments and businesses that may have questions related to Section 201 investigations and US trade enforcement proceedings, our team can help draft and submit comments during the investigation, work to secure congressional support for our arguments and counsel on the political dynamics underpinning any presidential action targeting foreign imports.