Association of Food Industries

2020 President’s Report

Bob Bauer
Association of Food Industries

“Tariff” may not be a four-letter word but it may as well be. AFI and its members have been besieged by tariff issues over the past 12+ months and it’s going to continue for the foreseeable future. One particularly frustrating facet of the tariff mess for me and the rest of the AFI staff is that we’re unable to give members definitive answers and timetables because things are being carried out by the U.S. government in ways not seen before – different procedures, different timetables, different implementation procedures and allowances in the various disputes.

Compare that to, for example, when a new regulation is passed. It’s usually black and white. We boil the legalize down, present it in a way it can be understood, tell members when it will go into effect and offer advice on how to comply.

The tariff actions were a different animal. Members were still in a better position than most because AFI staff was continually monitoring the various disputes, receiving ongoing updates from various sources, making the industry’s concerns known to the Trump Administration and members of Congress and providing members with a summary of the best-available information, including expected dates of new tariff announcements.

BUT – so much was and still is unknown. For example:

  • The items subject to the punitive tariffs in any of the disputes could change with little or no warning.
  • The punitive duty rates could change.
  • A list of possible new products subject to punitive tariffs could be issued, creating yet another round of uncertainty.

Of course, there could be progress as well. In fact, I’m among those who think there will be significant progress in the disputes between both China and the European Union. In fact, it’s possible both will be resolved this year. China’s economy simply can’t withstand the pressure the tariffs are creating and the Trump Administration is coming under increasing fire for the impact the tariffs are having on U.S. consumers and businesses. I think both sides will see it’s time to put together an agreement that in some way lets both sides claim a victory of sorts. The impact of the Coronavirus could bring about an even-faster resolution, though, of course, we’re all hoping something can be done to stem the tide on that fast-spreading illness.

There are moving parts – airplane parts – in the EU dispute as well. The tariffs imposed by the U.S. came as a result of a World Trade Organization ruling in its favor over subsidies paid to Airbus. The EU has a similar case against the U.S. regarding support given to Boeing. While there’s not much motivation for the U.S. to act while it’s the only one able to impose tariffs, the U.S. likely will act soon, so as not to add another issue to those already on Boeing’s plate.

AFI acted quickly when the EU dispute surfaced. We provided templates and guidance to members to help them and their customers submit comments in opposition to the tariffs. We encouraged our members in EU countries to put as much pressure as possible on their governments to work toward a solution. We attended hearings and had discussions with staff at the U.S. Trade Representative’s office. And we supported and encouraged our members to support the Fair Trade Act, which, if passed, will allow for refunds for product that was on the water when the EU tariffs were announced.

While it’s hard to figure out why some products were included on the tariff lists in the China dispute (some of them have little or no exports to the U.S.), it’s a different story for the products on the EU lists. Every product on the proposed lists is on there for a reason. Whether it’s an item with a large footprint in an EU country with an Airbus facility, whether it was a popular product produced largely in the EU and not elsewhere or whether for some other reason, a lot of thought went into what products were put on the lists. Of course, in putting out lists of potential products that far exceeded the value of the amount the U.S. was allowed to impose, the U.S. maximized the unrest it wanted to create surrounding this dispute.

Those types of tactics will continue on both sides. As with the China dispute, I expect both sides will make some concessions and come up with something that makes both look as though won something. In the meantime, AFI will continue to keep members informed as much as possible because we know the information we provide could save members many thousands of dollars – just as it did last year when members brought in products that ultimately became subject to the punitive duties but they beat the clock by following the expected timetable provided by AFI.

Association of Food Industries: Serving the U.S. Food Import Trade Since 1906
3301 Route 66, Ste. 205, Bldg. C • Neptune, NJ 07753
(732) 922-3008 • Fax: (732) 922-3590 • afius.org • info@afius.org