With help from Gavin Bade
— President Joe Biden kicked off his trip to Europe this week by announcing the United States and other G-7 countries have created a new $600 billion infrastructure financing program for developing countries, as an alternative to China’s nine-year-old Belt-and-Road Initiative.
— Biden also said G-7 countries will ban imports of Russian gold in another effort to punish Russian President Vladimir Putin for his invasion of Ukraine. But Commerce Department statistics show the United States imports little of the precious metal from Russia.
— A closely watched fertilizer trade remedy case is headed toward a final vote next month at the U.S. International Trade Commission.
It’s Monday, June 27. Welcome to Morning Trade. Today is a good day to dream about building a pond on your property, according to my 1974 Popular Science Homeowners Almanac. It would be good for fishing or swimming in the summer and you can skate on it when it freezes in the winter. Considering all that, it’s a wonder more homes don’t have them already.
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G-7 ROLLS OUT ANSWER TO CHINA’S BELT-AND-ROAD INITIATIVE: Biden and other G-7 leaders meeting in Germany on Sunday pledged to provide $600 billion in public and private financing for developing country infrastructure projects over the next five years in a move aimed at countering China’s growing global economic clout.
“What we’re doing is fundamentally different because it’s grounded on our shared values,” Biden said at a summit in the German Alps to announce the launch of the new Partnership for Global Infrastructure and Investment. “It’s built using the global best practices: transparency, partnership, protections for labor and the environment.”
G-7 leaders promised during Biden’s first trip to Europe as president last year to develop an alternative mechanism to finance infrastructure projects in developing countries.
The United States will “mobilize” $200 billion of the public and private capital for the G-7’s answer to China’s multitrillion-dollar Belt-and-Road infrastructure initiative that Beijing launched back in 2013, Biden said. The PGII initiative will prioritize projects in four areas: health and health security, digital connectivity, gender equality and equity, and climate and energy security.
“I want to be clear: This isn’t aid or charity; it’s an investment that will deliver returns for everyone, including the American people and the people of all our nations,” Biden said. “Because when democracies demonstrate what we can do, all that we have to offer, I have no doubt that we’ll win the competition every time.”
What else is on the agenda: G-7 leaders are expected to discuss the war in Ukraine, sanctions on Russia and the global food security crisis during their meeting today and will be joined virtually by Ukraine’s President Volodymyr Zelenskyy.
Biden will fly to Madrid on Tuesday to attend the annual NATO summit before returning to Washington late on Thursday. His itinerary includes a meeting of NATO’s decision-making body, the North Atlantic Council. He also will hold talks with Spanish President Pedro Sánchez and meet with Spanish King Felipe VI.
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G-7 BANS IMPORTS OF RUSSIAN GOLD: The G-7 economic powers will ban imports of Russian gold in a further tightening of the stranglehold Western nations have sought to impose in response to Russian President Vladimir Putin’s brutal war in Ukraine.
Biden announced the action on Twitter as G-7 leaders were on their way to the summit, describing gold as a major Russian export that “rakes in tens of billions of dollars” for the country. However, Commerce Department statistics show the United States imported relatively little “non-monetary gold” from Russia over the past decade.
Last year, the U.S. imported only about $11,000 worth from Russia out of total non-monetary gold imports of nearly $14.5 billion. Most years, gold imports from Russia were zero although 2019 stands out as an exception. That year, the United States imported about $198 million of gold from Russia, out of total non-monetary gold imports of $10 billion.
FERTILIZER CASE REACHES FINAL STAGE: The Commerce Department announced last week final anti-dumping and countervailing duty rates on imports of urea ammonium nitrate solutions from Russia and Trinidad & Tobago, setting the stage for the U.S. International Trade Commission to vote July 18 on whether to approve the duties or not.
The closely-watched case comes as farmers have been dealing with high fertilizer prices as a result of the war in Ukraine that helped put a squeeze on supplies. However, the tight stock situation improved somewhat recently after farmers balked at paying sky-high pressures for the key agricultural input, Bloomberg reported last week.
In a case brought by CF Industries Nitrogen of Deerfield, Ill., and two of its subsidiaries, the Commerce Department last week set final anti-dumping duties ranging up to about 123 percent on imports of urea ammonium nitrate solutions from Russia and about 112 percent from Trinidad & Tobago. It also announced final countervailing duty rates of about 6 to 10 percent on the imports from Russia and about 2 percent from Trinidad & Tobago.
However, the duties will only take effect if the ITC votes that CF Industries has been materially harmed, or is at least threatened with material harm, by the lower-priced imports. The United States imported about $263 million of the urea ammonium nitrate from Russia last year and $231 million from Trinidad and Tobago.
SENATE DUO PRESSES COMMERCE ON MASK TARIFFS: Sens. Tammy Baldwin (D-Wisc.) and Mike Braun (R-Ind.) sent a letter on Thursday to Department of Commerce Secretary Gina Raimondo, calling for an investigation into whether Chinese-made masks and related products are being sold in the United States at unfairly low prices.
The senators charged that “unfair competition [from China] is putting significant financial pressure on American manufacturers, driving many out of business, and threatening, for example, our ability to scale up the production of high-quality masks, such as N95 respirators, in the event of a new variant.”
Though self-initiated investigations are rare, the Commerce Department took such action last month in case involving into Chinese quartz-surface products, the senators said..The department also self-initiated similar investigations into common alloy aluminum sheet during the Trump administration — the first case to do so in more than two decades at the time.
NEW PLEA FOR CHINA TARIFF RELIEF: Six House Democrats wrote to Biden on Friday, asking him to lift at least some of the Trump-era tariffs on imports from China, particularly for products used in shipping and transportation.
“Shortages of shipping containers and chassis are among the challenges contributing to rising shipping and transportation costs,” wrote Reps. Abigail Spanberger (Va.), Kim Schrier (Wash.), Marilyn Strickland (Wash.), Chrissy Houlahan (Pa.), Susan Wild (Pa.) and Scott Peters (Calif.). “Other products that are critical to shipping logistics, such as various train and truck parts, are also impacted by Section 301 tariffs, exacerbating shortages and driving up shipping costs,” they added.
The lawmakers’ request for targeted relief for logistics and transportation also comes after messaging from the administration that the tariff decision will not be an all-or-nothing choice.
ELLARD’S ADVICE TO TRADE NEWBIES: The topic of WTO Deputy Director General Angela Ellard’s speech on Friday to graduates of the Advanced Master Program at the University of Bern’sWorld Trade Institute was “The Role of Multilateralism in the World of Polycrisis.”
But it was her advice at the end that caught our eye.
“You don’t need to make all your career choices now, once and for all,” the former senior aide on the House Ways and Means Committee told the trade neophytes. “Most likely, you will go through several iterations and reinventions in your lifetime, each of which will require different skills.”
For example: “I started in a law firm where the scorched-earth approach to litigation was common,” Ellard recalled. “When I worked for the Congress as Chief Trade Counsel, getting anything through Congress required building coalitions and consensus along and across party lines. And now, at the WTO, I see my role as a facilitator, listening to Members and helping them arrive at a meeting of the minds.”
Poetic license: Fresh from a somewhat successful ministerial meeting earlier this month, Ellard also seemed to borrow a phrase from a recent Bloomberg article to sum up the six-day roller coaster experience that ended at 5 a.m. on Friday, June 17th.
Standing in the WTO’s courtyard, facing Lake Geneva, “we saw a beautiful sunrise, which we like to think symbolizes the break of a new dawn for the WTO and multilateralism,” she said.
— The U.S. is preparing to escalate its complaints that Mexico’s state-favoring energy policies violate the nations’ free-trade agreement, Bloomberg reports.
— China has proposed a free-trade bloc among the five BRICS countries in a bid to enhance economic ties within the decade-old grouping, as its geopolitical rivalry heats up with the United States, The South China Morning Post reports.
— China’s ambassador to Australia sees a chance for the two countries to repair relations, Reuters reports.
— With Merkel gone, Germany gets tough on Brexit, POLITICO reports.
— Japanese farmers are frustrated by the slowly weakening yen, Reuters reports.
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