As we continue to work hard to keep you up to date on the current Trade War between the U.S. and China, the U.S. International Trade Commission (USTIC) released The Year in Trade 2017 on August 21, 2018. The report is the USTIC’s 69th annual report submitted to the U.S. Congress under section 163(c) of the Trade Act of 1974 (19 U.S.C. § 2213(c)). The report is one of the government’s most comprehensive reports about developments regarding the administration of U.S. trade policies, trade laws, and trade agreements.

What Does the Report Say About U.S.-China Trade?

  • In 2017, China remained the United States’ largest single-country trading partner based on two-way merchandise trade, accounting for 16.4 percent of total U.S. merchandise trade.
  • U.S. two-way merchandise trade with China amounted to $635.9 billion in 2017, an increase of 10.0 percent over the $578.2 billion recorded in 2016.
  • The U.S. merchandise trade deficit with China remained higher than the U.S. trade deficit with any other trading partner in 2017, amounting to $375.2 billion.
  • Its $28.2 billion increase relative to the year before reflected a $42.3 billion increase in U.S. merchandise imports from China that outpaced a $14.8 billion increase in U.S. merchandise exports to China in 2017 (figure 6.3).
  • China was the third-largest single-country destination for U.S. merchandise exports in 2017, behind Canada and Mexico.
  • U.S. merchandise exports to China amounted to $130.4 billion in 2017, increasing by 12.8 percent, or $14.8 billion, relative to 2016.

On May 18, 2017, the U.S. Administration notified Congress of its intent to renegotiate North American Free Trade Agreement (NAFTA)’s terms so as to modernize and rebalance its provisions. The negotiations began on August 16, 2017, in Washington, DC, with two primary goals: (1) to update NAFTA with modern provisions on digital trade, intellectual property, cybersecurity, good regulatory practices, and treatment of state-owned enterprises; and (2) to rebalance NAFTA and reduce the U.S. trade deficit with Canada and Mexico. Five negotiating rounds were held by the end of 2017. Yesterday, President Trump announced the renaming of the NAFTA to the “US-Mexico Free Trade Agreement,” leaving room for future negotiations with Canada. Below is trade data on the trade relationship between the United States and Canada.

What Does the Report Say about Canada?

  • For the third year in a row, Canada was the second-largest U.S. single-country trading partner in 2017.
  • The value of U.S. merchandise trade with Canada rose 7.0 percent in 2017 to $582.4 billion, accounting for 15.0 percent of total U.S. merchandise trade with the world—a share unchanged from 2016.
  • In 2017, Canada was the United States’ largest single-country export market for goods, taking 18.3 percent of U.S. merchandise exports. U.S. exports to Canada increased by 5.9 percent to $282.5 billion in 2017. Leading U.S. exports to Canada included motor vehicles––vehicles both for passengers and for goods transport––as well as their parts and accessories; civilian aircraft, engines, and parts; crude petroleum; and light oils.
  • U.S. imports from Canada were $300.0 billion in 2017.
  • Leading U.S. imports were crude petroleum, passenger motor vehicles, natural gas, coniferous wood and products, and refined petroleum products.

What Other Topics Does the Report Cover?

  • All U.S. antidumping, countervailing duty, safeguard, intellectual property rights infringement, national security, and section 301 cases active in 2017.
  • Trade Adjustment Assistance and the operation of U.S. trade preference programs, including the U.S. Generalized System of Preferences, the Nepal Trade Preference Act, the African Growth and Opportunity Act, and the Caribbean Basin Economic Recovery Act, including initiatives for Haiti;
  • WTO dispute settlement decisions and other significant activities in the WTO, the Organization for Economic Co-operation and Development, and the Asia-Pacific Economic Cooperation forum;
  • Negotiations on an agreement on fisheries subsidies under the WTO and developments regarding other U.S. FTAs already in effect; and
  • Bilateral trade issues with major U.S. trading partners—the European Union, China, Canada, Mexico, Japan, South Korea, India, and Taiwan.

The report also provides an overview of U.S. trade in goods and services during 2017. Statistical tables highlight U.S. bilateral trade with major trading partners and trade under U.S. trade preference programs and free trade agreements.

How Did the International Trade Community Change?

The Executive Summary states:

  • The rate of global economic growth increased in 2017, rising from 2.5 percent in 2016 to 3.3 percent in 2017.
  • The value of U.S. merchandise exports totaled $1,546.7 billion in 2017, up 6.6 percent ($95.7 billion) from $1,451.0 billion in 2016.
  • The value of U.S. merchandise imports totaled $2,342.9 billion in 2017, up 7.1 percent ($155.1 billion) from $2,187.8 billion in 2016. The largest increase in both U.S. imports and U.S. exports was in energy-related products.

What Were Some Key Trade Developments?

  • The U.S. International Trade Commission (the Commission) conducted two new safeguard investigations during 2017 under the global safeguard provisions in sections 201–204 of the Trade Act of 1974:
    • The first investigation concerned imports of crystalline silicon photovoltaic cells (CSPV cells).
    • The second, imports of large residential washers (washers).
  • There were two ongoing investigations in 2017 under section 301 of the Trade Act of 1974:
    • The first investigation was instituted in 1987 and concerned various EU meat hormone directives, which prohibit the use of certain hormones that promote growth in farm animals. In December 2016, representatives of the U.S. beef industry filed a request with the Office of the U.S. Trade Representative (USTR) asking that the additional duties be reinstated, and USTR initiated a process to consider whether to reinstate the additional duties.
    • Because the USTR continued to find China’s 2017 IPR protection and enforcement regime to be insufficient in many regards, the USTR initiated an investigation in August 2017 and was ongoing at the end of 2017. The investigation is considering whether a wide variety of acts, policies, and practices by the government of China related to technology transfer, intellectual property, and innovation are actionable under section 301 of the 1974 Trade Act.
  • In April 2017, the USTR released the 2017 Special 301 Report, which examined the adequacy and effectiveness of intellectual property rights (IPR) protection in more than 100 countries.
    • The 2017 Special 301 Report listed 11 countries on the priority watch list (Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Thailand, Ukraine, and Venezuela) and 23 countries on the watch list.
    • In December 2017, USTR issued the 2016 Out-of-Cycle Review of Notorious Markets report, which highlighted over 25 internet-based markets and 12 countries with physical marketplaces (e.g., shops) that reportedly engage in or facilitate substantial copyright piracy and trademark counterfeiting.

In light of all of the tariff changes, USTR has provided two opportunities for importers to remove their products from the 301 list, which we describe in our previous blog.

The deadline for both the comments and the formal product exclusions are approaching! To start drafting your comment or filling out the formal product exclusion form, contact DTL TODAY at 305-456-3830 or