The representative's office has now released a list of over 350 items that will no longer be subjected to tariffs following an apparently lengthy review.

The U.S. Trade Representative’s office is reinstating the exclusions for 352 items, it said in a statement on Wednesday. The reinstated exclusions include a wide variety of machinery, manufacturing components and consumer goods, ranging from television-screen parts to backpacks, bicycles and pillows. [...]

The main considerations in whether to reinstate the exclusions were whether a product or comparable product was available from sources in the U.S. or in third countries, and changes in the global supply chain since 2018. They also included efforts by importers or U.S. purchasers to source the product from the U.S. or third countries, and domestic U.S. capacity to produce the product.

In other words, the review found that these tariffs serve no practical purpose beyond raising costs for average consumers. The goods subjected to tariffs were not cutting into the business of American producers in any case and exempting them from tariffs will make no material difference.

If the formal or officially-stated goal of Trump's trade war was to reorganize our economy to produce more of these goods ourselves, it failed. The structure of our economy hasn't changed at all and record-high inflation makes it even less appealing to invest in domestic operations that now cost more than it ever has before.

We spent tens of billions in higher costs stemming from Trump's trade wars and we have nothing to show for it. Ending the lingering trade battles has been politically challenging, but there will be even less public support for any future effort to impose tariffs with no clear, obtainable goal; no end game. China was never going to throw up their hands and surrender to what was ultimately a debate over own sovereignty from their point of view.

Now, as much as they would like to, the White House has not found a feasible way to end Trump's trade war with China that labor unions will support and that leaves the administration with the unenviable task of maintaining the legal framework for keeping tariffs in place.

A so-called "review of necessity" is required by law to continue the trade war and the Biden administration has now initiated that review of tariffs on over $300 billion in goods.

From Bloomberg:

The evaluation, officially known as a “review of necessity,” so far has attracted little attention. It relates to Section 301 of the Trade Act of 1974, the law that President Donald Trump used to hit China with the tariffs starting in July 2018.

The law states that the tariffs expire four years after they were imposed, unless the U.S. Trade Representative’s office analyzes their effectiveness and consequences. The review needs to happen within 60 days of their potential end, which is July 6 for the first group of $34 billion in Chinese goods, with the majority set to expire in the following months.

While it does not seem likely that Trump's legacy trade war with China is going to end anytime soon, it is possible that this "review of necessity" will facilitate tariff exemptions for a significant number of goods.

Any honest review is going to find that very few of the tariffs are actually necessary or that any of them have provided a material benefit to Americans. Moreover, the office of the United States Trade Representative (USTR) recently solicited public comments on exemptions for over 500 imported goods that are subject to tariffs. The trade office has not acted on any of those exemptions, but action could be paired with the "review of necessity."

With no real demonstrable necessity for continuing the war, the Biden administration's rhetoric will likely center around China's failure to comply with the terms of Trump's "phase one" deal that never has and never will receive a second phase.

It's true enough that China hasn't complied and isn't going to, but that's all they've got. I don't envy the White House aides responsible for writing that rhetoric because there's nothing about this that isn't stupid. We're going to continue a trade war that isn't actually helping anyone just because it's not politically acceptable to end it. Everyone knows it's stupid except the trade unions still mired in protectionist rhetoric that's almost as old as I am.

American and European officials agreed to end Trump's trade war by accepting a quota system that will only apply tariffs to excess goods above a certain threshold and the same approach could be used to end Trump's tariffs on Japanese metal.

In fact, Commerce Secretary Gina Raimondo literally said they'll take the "same approach."

The U.K. and Japan “are important allies to us, and we do want to see if we can work through the trade issues,” Raimondo said in an interview in Chicago on Monday. “I’ll take the same approach into those negotiations as we had with the EU, which is yes, we want to work with our allies and remove trade irritants; however, we have to protect the steel and aluminum industry in America and the workers in those industries.”

The Trump administration imposed a 25% steel tariff, along with a 10% duty on aluminum imports, in March 2018 on a range of nations, using the section 232 national-security provision in a 1962 trade law.

Imposing tariffs on European goods in the name of "national security" never made sense because they're our allies, but that is even more true of our relationship with Japan.

Trump centered the vast majority of his foreign policy around the idea that China is public enemy number one and he imposed tariffs on China as a result of that, but imposing tariffs on Japanese goods is counterintuitive. Japan is arguably our most important defense partner in the world and that is certainly true of any policy aimed at countering China which is within spitting distance of Japan. And yet, Trump imposed tariffs on Japan in a signal that they're a threat to our national security.

The Biden administration is not that stupid, but almost no one is.

It's anyone's guess how long it will take to reach an agreement on ending Trump's tariffs on Japan, but the trade war with Europe ended much quicker than I expected it to once the ball was rolling. It's as if no one wanted it in the first place.

A deadline of today to either end or escalate Trump's trade war did not leave then much other choice, but the president announced yesterday that he had reached a deal with European officials to lift American tariffs on metal and Europe's corresponding retaliatory tariffs on American goods.

What was somewhat unexpected was the inclusion of aluminum under the deal, not just steel.

The move immediately removes tariffs on the European Union on a range of US products that were put in place by former President Donald Trump. Biden said the move would lower costs for American consumers, strengthen the US steel industry and create good-paying union jobs.

As part of the deal, the US and the EU announced their commitment to negotiating a carbon-based sectoral arrangement on steel and aluminum trade by 2024. The President said the agreement would "incentivize emission reductions in one of the most carbon-intense sectors of the global economy."

They also committed to working to restrict access to their markets for dirty steel -- steel that has another material along with it -- from countries like China. They will also limit access to countries that dump steel in their markets, which Biden said harms workers, the industry and the environment.

There is one big exception to this good news and while I can't necessarily say it's funny, I'd be lying if I said I wasn't amused.

President Biden's deal is with the European Union's trading bloc and, as you know, Britain is no longer a member of the trading bloc and tariffs on exports of British metal will still apply.

Trade body UK Steel said a deal for British producers was "sorely needed".

The tariffs, which came into force in 2018, nearly halved British steel exports to the US, Gareth Stace, director general of UK Steel, said.

The US is the second-largest market for British-made steel. But the new deal will put UK producers at a competitive disadvantage compared to European rivals who will be able to ship their products to the US without paying import taxes.

Who remembers when Prime Minister Boris Johnson said a trade deal with the U.S. could make up for losing free access to the European market?

The Biden administration previously removed Trump's tariffs on other European goods that he imposed in response to the 16-year-old dispute over subsidies for Airbus. The administration is no longer threatening to impose tariffs on European goods in response to taxes on digital services and removing the tariffs on metal means Trump's trade war is effectively over now. It's history.

Now, not coincidentally, Politico reports that European officials are ready to make a deal in the coming days and that coincides with President Biden's trip to Europe.

The contours of a deal now appear to be forming around Europe accepting tariff rate quotas. This would secure an immediate removal of the Trump-era tariffs but would mean that high duties on European metal would kick in again if EU exports surpassed a certain level. EU officials had regarded these kinds of measures as blackmail under Trump, but are now accepting there may be no other way out of the standoff.

In a meeting with trade diplomats on Thursday, the European Commission was optimistic that a deal could be reached, two people in the meeting said. But diplomats did not receive more details of any future settlement, as the Commission does not want to undermine the negotiations with Washington.

In addition to Biden's trip to Europe, a Monday deadline of November 1st for either imposing further tariffs or reaching a settlement is increasing pressure on both sides to accept a compromise.

I would be very surprised if Biden returns home without a deal and, once a deal is reached, the Biden administration can turn all of their attention toward either ending or deescalating Trump's trade war with China and other countries.

It's not the sole or even the biggest reason, but lingering trade wars are one reason why the price of virtually everything has increased. Free trade reduces inflation.

The Biden administration had not formally abandoned the plan to impose those tariffs, but they were called off at the last minute because the taxes won't exist in the near future. The taxes on digital services are being replaced by a universal minimum tax.

Austria, Britain, France, Italy, Spain will get to keep their digital taxes in place until a global tax agreement comes into force in 2023, under the plan jointly announced with Washington.

Under the agreement announced on Thursday, any digital taxes the countries collect from such firms after January 2022 that exceed what they would have to pay under the new rules would be credited against the firms' future tax liabilities in those countries.

In exchange, the United States agreed to drop its planned tariff retaliation against the five countries on the grounds that their taxes discriminated against American companies.

It's no surprise that the Biden administration is not going to escalate Trump's trade war when they're so close to finally ending it, but I understand why the threat of doing so was kept in place even if the rationale behind it is preposterous.

The idea that a tax on digital services discriminates against Americans doesn't hold up when you consider that these are global corporations who service more users outside of the United States than inside. They may be owned by Americans, but they are not exclusively American companies. Facebook has over 2 billion active users across the world and only 200 million of them are Americans. There's almost twice as many Facebook users in India than the United States.

Even if that were not the case, I do not like the idea of telling other countries who they can and cannot impose taxes on within their own borders. That's a threat to sovereignty that could be turned back against us in the future.

The Biden administration let the Trump regime's threat linger for appearances, not for substance.

According to Bloomberg, the Biden administration's trade representative Katherine Tai will offer to lift tariffs on European metal under a higher threshold than previously proposed. This would allow most imports to escape tariffs.

The proposal is apparently designed to both end the war and appease labor unions.

The updated proposal involves so-called tariff-rate quotas that Bloomberg reported last month, but provides for a bigger quantity of steel to enter the U.S. before higher duties kick in, according to two of the people who asked not to be identified because the discussions are private. TRQs allow countries to export specified quantities of a product to other nations at lower duty rates, but subjects shipments above a pre-determined threshold to a higher tariffs. [...]

U.S. steelmakers and workers generally support some sort of tariff-rate quota, with the head of the United Steelworkers, Tom Conway, saying in June he would support such a move.

Since the tariffs started in 2018, U.S.’s steel mills have been producing at their highest levels since the Great Recession, and their owners are on track to book their fattest profits yet, thanks to record high prices.

Higher prices have been good for rich individuals who actually own commodities and futures in metal, but not so much for the rest of us.

With a breakdown in supply chains threatening the entire global economy at this point, I would not be surprised to see a tentative deal to finally end Trump's trade war with Europe announced in the very near future.

Sources who spoke to Bloomberg say the US and EU are still far apart, but we literally can't afford to fight trade wars on multiple fronts and I suspect the breakdown in supplies is why the Biden administration is also moving forward to unwind Trump's trade war with China. Our trade deficits are surging because of higher prices and Trump's tariffs are contributing to higher prices beyond what we would experience under the disruption to supply chains alone.

This is not directly related to the cost of metal, but to some extent it is. The price of beef at my grocery has literally doubled and one factor contributing to the higher cost is a shortage of farm equipment and the metal that goes into it.

New Ag Supply in Kansas is pleading with customers to order parts now for spring planting. And in Iowa, farmer Cordt Holub is locking up his machinery inside his barn each night, after thieves stole hard-to-find tractor parts from a local Deere & Co dealership.

Farmers say they are scrambling to find workarounds when their machinery breaks, tracking down local welders and mechanics. Growers looking to buy tractors and combines online are asking for close-up photos of the machine's tires, because replacements are expensive and difficult to find, said Greg Peterson, founder of the Machinery Pete website which hosts farm equipment auctions.

According to Politico, the two sides are now considering a compromise to end Trump's tariffs on metal that would include setting a quota for imports rather than imposing tariffs on all imports.

“Everybody wants this to go away because it’s a leftover from Trump and stands in the way of better EU-U.S. relations,” one EU trade diplomat said, capturing the overall mood of suing for peace in Brussels. The backdrop to the conciliatory tone is a new diplomatic format — the Trade and Tech Council — where Washington and Brussels are trying to put the antagonism of the Trump era behind them to cooperate in areas such as robotics, microchips and artificial intelligence. Its first session was held on September 29. [...]

Brussels also understands the pressure Biden is facing from the steel industry, unions and a part of his party, especially ahead of the upcoming midterm elections.

“Obviously there are very difficult questions, importantly, what you can actually do — and here I’m speaking a little bit like an American — to keep your steel industry, or your building industry, alive in the face of this overcapacity and not at the same time penalize the Europeans,” Rupert Schlegelmilch, who handles EU-U.S. relations at the European Commission’s trade department, said at a recent event.

Ideally, there would be no tariffs and no quotas, but key constituencies of the Democratic party require their pound of flesh even if the flesh is laced with poison.

The point at which the self-interest of predominately white labor unions in the Midwest becomes detrimental to international relations and the entire economy is the point at which they lose me, but I digress. At the end of the day, they are doing what they were created to do and it's up to the Biden administration to balance their interests with greater interests for everyone else.

I don't envy the White House. Their job in this situation is to find the outcome that upsets the least number of parties but it's encouraging that European diplomats understand the political pressures the Biden administration is dealing with.

If Trump's tariffs on European metal are suspended, that will be the end of his trade war with Europe.

Just one day after Tai's announcement, the USTR published a listed of nearly 550 imports from China that will be exempted after a period of public comment.

WASHINGTON, Oct 5 (Reuters) - The U.S. Trade Representative's office said on Tuesday it is seeking public comments on plans to revive a targeted tariff exclusion process for imports from China, specifically whether to reinstate previously extended exclusions on 549 import product categories.

USTR said it would accept public comments from Oct. 12 through Dec. 1 on possible exclusions for a list of products that includes industrial components, thermostats, medical supplies, bicycles and textiles.

I wrongly assumed that we would not see significant action taken to unwind the trade war until after the new year, but the White House apparently believes the matter is more urgent than I expected.

With American companies facing shortages of labor and basic goods, it probably should not come as any surprise that common industrial components and textiles made the initial list of goods that will be exempted from Trump's tariffs.

The Trump regime slapped tariffs on Chinese goods ranging from water hoses to kiddie pools because the availability of cheap imports supposedly harmed our national security by weakening American industries, but has anyone seen the kiddie pool industry take off in the last three years?

I'm using the most ridiculous example, of course, but you get the point. Trump's trade war was suppose to secure or altar the structure of our economy, but it never did and never will. Our trade deficit hit an all-time record high last month even with all of Trump's tariffs on Chinese goods still on the books.

The U.S. trade deficit raced to a record high in August, boosted by imports as businesses rebuild inventories, the latest sign that economic growth slowed in the third quarter.

The trade deficit surged 4.2% to $73.3 billion last month, the highest since the government started tracking the series, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast the trade gap widening to $70.5 billion.

When adjusted for inflation, the goods trade deficit increased $1.9 billion to $101.8 billion in August. The report followed on the heels of government data last Friday showing high inflation sharply cutting into consumer spending in July, with a moderate rebound in August.

Rising inflation, shortages, and a drop in consumer spending are all very good reasons to end the trade war. This is an easy sell.

For the first time, President Biden's trade representatives, Katherine Tai, has explicitly said some tariffs on Chinese goods could be lifted in the near future.

WASHINGTON, Oct 4 (Reuters) - Top U.S. trade negotiator Katherine Tai on Monday pledged to begin unwinding some tariffs imposed by former President Donald Trump on goods from China while pressing Beijing in "frank" talks in coming days over its failure to keep promises made in the Trump trade deal and end harmful industrial policies. [...]

Tai said she would pursue a virtual meeting with Chinese Vice Premier Liu He to discuss the trade deal "soon" while starting a "targeted" process to revive exclusions for certain Chinese imports from punitive U.S. tariffs, with additional exclusion processes possible in the future.

Tai also said she wouldn't rule out imposing new tariffs to punish China for not adhering to Trump's "phase one" trade deal, but I think we can say with near certainty that that's not going to happen. She's saying that because she has to say it; because the Biden administration cannot afford to appear weak even if the legacy of Trump's trade war is still hurting far more than it helps.

With inflation running rampant and consumer prices skyrocketing ahead of the holidays, there's no better time than now to end Trump's farcical trade war. A handful of exclusions from tariffs will only make a dent, but it's a start.