November 16, 2018

BDI: The United States after the Midterms – The future of U.S. trade policy

The Democratic Party has won the majority back in the House of Representatives. A Democratic upheaval, the so-called “blue wave“, did, however, not materialize. The Republicans were even able to build on their majority within the Senate. A change of course by U.S. President Trump is not in the cards. The United States will thus remain a difficult partner, in particular in trade.

Around 200 million registered American voters had the opportunity to cast their votes and make their voices heard in the midterm elections. In this election, all 435 seats of the House of Representatives and 35 seats in the Senate, as well as 36 posts for state governors, were up for vote. Once the last polling places were closed, it was clear that the Democrats had retaken the majority in the House of Representatives with currently 229 seats – the Republicans have consequently lost 34 seats. Eight seats are at this time still too close to call. The Democrats have additionally won governorships in seven states. The Senate, however, remains in the control of the Republicans, who were able to increase their majority from 51 to a total of 53 seats.

The new 116th Congress will come together for the first time in early January 2019. In the meantime, both parties will hold their own leadership elections.

The unprecedentedly high turnout in the midterm elections demonstrates that this election served also as an assessment regarding President Trump and his controversial policy choices: particularly the immigration reform, the wall at the US-Mexico border, and the attempted repeal of President Obama‘s health care reform, the Affordable Care Act. In traditional swing states such as Florida and Virginia, the voter turnout has not been this high since the late 1990s.

More Headwinds from the Democrats Expected
With the newly acquired blue majority in the House, the White House is likely to be more closely monitored and accountable in the near future. The Democrats will, without doubt, complicate the implementation of the Trump agenda and block controversial legislative initiatives, such as the border wall or the repeal of Obamacare. At the same time, the Democrats cannot afford to be perceived as a blocking party. They also need their own legislative successes. Are bipartisan initiatives, such as in the field of infrastructure, likely to succeed in the next two years? This remains to be seen. The fact that the Democrats do not wish to assist President Trump with any legislative successes before the next presidential election in 2020 certainly does not help such prospects.

No Change of Course in Sight for U.S. Trade Policy
Despite the election results, a foreseeable change in the general trajectory of U.S. foreign trade policy under President Trump is unlikely. The most relevant trade topics for the next few months will be the ratification of the US-Mexico-Canada Agreement (USMCA); the planned free trade agreements with Japan, the United Kingdom, and the European Union; the current trade dispute with China, and Trump’s dedication to tariff imposition.

The composition of committees to be led by Democrats in the House are certainly decisive for the course of the next two years. The chairmanships of the “Ways and Means Committee” and “Foreign Affairs Committee” are of particular importance, considering their focus on trade and international relations. One consideration for leadership of the “Ways and Means Committee” is the trade-moderate Democrat Richard E. Neal (D-MA). In the Senate, the most relevant groups are the “Finance Committee” and the “Committee on Foreign Relations”. It is expected that the Republicans Orrin Hatch (R-UT) and Bob Corker (R-TN) will be replaced by Chuck Grassley (R-IA) and Jim Risch (R-ID), respectively. Grassley voiced concerns earlier in the year regarding the escalating trade conflict between the United States and China and, in particular, its impact on agriculture in Iowa. Risch has, on the other hand, altered his own position – once very critical of the course of U.S. President Trump, he now generally demonstrates approval of his agenda.

Source: BDI

November 07, 2018

U.S. Chamber statement on the Midterm Elections

Donohue: “Divided Government Does Not — And Cannot — Mean Gridlock”

U.S. Chamber of Commerce President and CEO Thomas J. Donohue issued the following statement on the outcome of the midterm elections:

“The Chamber congratulates all successful House and Senate candidates on their election victories.

“Throughout our history, the Chamber has worked with all types of majorities to advance a pro-growth policy agenda. While the composition of Congress may change, our objective never does: We’re focused on working with both political parties to push for policies that grow the American economy, create good jobs, and advance free enterprise.

“Divided government does not — and cannot — mean gridlock. We urge each and every leader to find the middle ground on issues including immigration, infrastructure, and trade.

“Now is the time for our elected leaders to train their focus on what can be achieved to keep up America’s economic momentum. There is much to do and no time to waste.”

Source: USCC

November 07, 2018

BusinessEurope: EU-US after midterm elections: business expects transatlantic solutions

Now that the US midterm elections have taken place, the EU and the US must concentrate all efforts on solving critical problems in their transatlantic relationship, especially in trade-related policy areas.

BusinessEurope President Pierre Gattaz commented: “I hope that now after the US midterm elections we can concentrate on transatlantic solutions that work for both sides. European companies expect concrete results on many topics of common interest, including joint work on the reform of the WTO, addressing overcapacity and state subsidies and promoting regulatory cooperation in key sectors of our economies. We have a common interest in eliminating tariffs, not imposing additional duties on each other’s exports.”

He added: “Companies need a stable and predictable trade and investment environment. Constant disruption is not good for investment, jobs and innovation neither in the EU nor in the US. We need modern trading rules and a reformed World Trade Organisation. The EU and the US should work together to achieve this. Now is the time to act and get concrete results.”

Source: BusinessEurope

Image: Fotosearch