By Ari Hawkins

Presented by Autos Drive America

With help from Camille Gijs and Sarah Anne Aarup 

—  The White House is expected to tout progress toward resolving a steel and aluminum dispute with Brussels at a senior-level meeting with EU chiefs on Friday. The gathering comes as transatlantic industry raises pressure on the partners to reach a long-term solution to avoid the return of Trump-era tariffs.

— Washington set up a joint effort to facilitate digital trade with Vietnam as the Office of the U.S. Trade Representative faces scrutiny over a lack of perceived transparency related to the U.S.-led Indo-Pacific Economic Framework.

Happy Monday, Oct. 16, and Welcome to Morning Trade!! As a secret pop-culture fiend, I’m incredibly envious of all of the cosplayers who were out on the streets of New York City this Comic-Con. The Mushroom Kingdom’s Toads will forever have my heart. Send us your trade news at: [email protected], [email protected] and [email protected]. You can also follow us on X: @_arihawkins, @gavinbade and @tradereporter.

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International trade drives the American economy forward. For more than 60 years, Autos Drive America members have played a critical role in the global trade ecosystem, helping to spur new investments and provide rewarding career opportunities for American workers. Last year, international automakers exported nearly 700,000 vehicles assembled in America to more than 130 countries—including 65 different models of cars and trucks. Learn about how international automakers are Investing in US at AutosDriveAmerica.org.

U.S. President Joe Biden, center, arrives with Ursula von der Leyen, president of the European Commission, left, and Charles Michel, president of the European Council, for a European Union (EU) leaders summit in Brussels, Belgium, on Tuesday, June 15, 2021. | Thierry Monasse/Bloomberg via Getty Images

TRANSATLANTIC CRUNCH TIME: The Biden administration is hosting EU chiefs at a summit this Friday, as officials on both sides of the Atlantic scramble to hammer out a long-running steel and aluminum dispute amid rising pressure and geopolitical friction on multiple fronts.

The transatlantic summit will take place in Washington, and be attended by European Commission President Ursula von der Leyen and European Council President Charles Michel. The gathering comes as negotiators hustle to avert the reimposition of Trump-era tariffs on billions of dollars worth of transatlantic commerce.

First in Morning Trade: The U.S. Chamber of Commerce and the Confederation of European Business, known as BusinessEurope, released a joint statement today urging officials at the summit to resolve disputes and enhance cooperation for the sake of the $7.1 trillion EU-U.S. economic relationship and global industry.

“The October 20 U.S.-EU Summit is a timely opportunity to underscore both the importance of resolving outstanding disputes and reaching a coordinated response to pressing geopolitical and economic challenges,” said Marjorie Chorlins, the Chamber’s senior vice president for Europe.

“We call on our leaders to firmly reject protectionism, pledge to avoid discrimination and regulatory overreach, and engage with stakeholders to develop practical outcomes,” she said.

Looking ahead: European ambassadors from Belgium, Denmark, Ireland, Norway and Portugal are confirmed to participate in a panel tomorrow for a conversation on transatlantic trade and investment, which is part of Chamber activities in the run-up to Friday’s summit.

Deadline delayed: Despite European ambitions to resolve long-standing disagreements by this week’s summit, officials from both countries remain deeply divided over key aspects of the dispute, and already agreed to push back the self imposed deadline from the end of October to January.

Nevertheless, officials from the United States and Europe are expected to release a joint statement during the summit, which will tout limited progress toward reaching a long-term solution, and could officially confirm the self-imposed deadline’s extension, according to two persons familiar with negotiations, who spoke to Morning Trade.

The United States and the European Union are also set to commit to de-risk from China, in a softening of Washington’s position toward Beijing, per our colleagues in Brussels.

Keep in mind: The U.S. was adamant about the need to “decouple” from China until April, when national security adviser Jake Sullivan gave a speech on the topic, arguing that Washington was “de-risking and diversifying, not decoupling. We’ll keep investing in our own capacities, and in secure, resilient supply chains.”

And TTC in December: A draft document, dated Oct. 13 and seen by POLITICO, also confirms that the EU-U.S.Trade and Technology Council summit will take place in December. It’s set for somewhere in the U.S. but a location for the event, which will bring together senior European Union and American officials including EU trade chief Valdis Dombrovskis and Secretary of State Antony Blinken, has yet to be determined.

PUTIN TO VISIT XI AS TIES DEEPEN: Russian President Vladimir Putin will meet Chinese counterpart Xi Jinping in Beijing this week — a rare international visit by the Russian leader, per Suzanne Lynch. During the Oct. 17-18 visit to Beijing, Putin will attend a forum marking 10 years of the Belt and Road Initiative, China’s global infrastructure program that has helped boost its influence worldwide. Representatives from more than 100 countries are expected to attend the forum in Beijing, including Hungarian Prime Minister Viktor Orbán.

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U.S. EYES NEW PROJECT AS IPEF SCRUTINY MOUNTS: The U.S. Agency for International Development and Vietnam’s Ministry of Industry and Trade agreed to set up a project to facilitate Digital trade, building off of the U.S.-Vietnam Comprehensive Strategic Partnership announced last month.

The Vietnam Digital Trade program is the first to be launched between the countries, and advances the U.S.-led Indo-Pacific Economic Framework for Prosperity, according to a press release, which kicked off its sixth negotiating round in Malaysia on Sunday

USAID’s three-year project will support “implementation of policy frameworks that facilitate digital trade, in consultation with the private sector. Regulations that are responsive to private sector needs remove trade bottlenecks and increase regulatory transparency, helping to shape an e-commerce sector where enterprises of all sizes can benefit,” the agency said.

The move comes as the Biden administration faces mounting pressure from U.S. lawmakers to reach new binding digital agreements, and to improve transparency around negotiations related to IPEF.

Case in point: Rep. James Comer (R-Ky.), the chair of the House Oversight and Accountability Committee, sent a letter to USTR Katherine Tai taking issue with a March letter sent by the Federal Trade Commission and the Department of Justice (DOJ) to USTR regarding competition and digital trade.

“The letter from FTC and DOJ to USTR indicates that U.S. negotiators are now seeking to rewrite established rules for competition and digital trade that enjoy bipartisan support. USTR’s lack of transparency in doing so undermines Congressional confidence in USTR’s handling of IPEF,” Comer wrote.

Bipartisan scrutiny mounts: Sens. Tom Carper (D-Del.) and Todd Young (R-Ind.) urged USTR on Friday to take “immediate action” to forge binding agreements over digital trade and data governance.

The lawmakers added that current digital arrangements such as those in the U.S.-Mexican-Canada Agreement should “serve as a floor, not a ceiling, in crafting enforceable digital trade rules, and the Administration should take immediate action to prioritize the establishment of ambitious and binding obligations.”

WTO WARNS OF HAMAS-ISRAELI IMPACTS: World Trade Organization Director-General Ngozi Okonjo-Iweala said the conflict between Israel and Hamas would have a “really big impact” on trade flows, particularly as it broadens across the region, per Reuters.

"There is uncertainty about whether this is going to spread further to the whole region, which could impact very much on global economic growth," Okonjo-Iweala, who is in Morocco for International Monetary Fund and World Bank meetings, told the outlet on Friday.

JOIN 10/25 FOR A TALK ON THE FUTURE OF GRID RELIABILITY: The EPA’s proposed standards for coal and new natural gas fired power plants have implications for the future of the electric grid. These rules may lead to changes in the power generation mix—shifting to more renewable sources in favor of fossil-fuel plants. Join POLITICO on Oct. 25 for a deep-dive conversation on what it will take to ensure a reliable electric grid for the future. REGISTER NOW.

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House Judiciary Chair Jim Jordan (R-Ohio) on Capitol Hill last week. | Francis Chung/POLITICO

HOW THE HARD-RIGHT MOVES ON TRADE: House Republicans selected conservative Ohio Rep. Jim Jordan as their next nominee for speaker after a whirlwind week on the Hill, who faces grim prospects of overcoming his dozens of skeptics and winning a floor vote set for Tuesday.

Nevertheless, the choice to nominate the founder of the far-right Freedom House Caucus after the exit of conservative Rep. Steve Scalise (La.) could have wide implications on trade and a range of policy areas, and would cement the right-ward shift of the House GOP if elected.

If not Scalise, who? While Jordan pushed for the new version of the North American free trade deal, known as the USMCA, the conservative firebrand has historically favored fierce confrontation over bipartisan compromises, compared to both Scalise and former House Speaker Kevin McCarthy (R-Calif.).

Jordan has expressed reservations about Trade Promotion Authority, legislation Republicans have signaled they would use to nudge the executive branch toward considering new free trade agreements, and praised the expiration of the U.S. Export-Import Bank’s charter back in July of 2015.

Keep in mind: While Jordan won the Republican nomination, the vote underscored deep divisions within the House GOP, and his confirmation remains a long shot. Eighty-one Republicans rejected Jordan in favor of a low-key backbencher, Rep. Austin Scott (R-Ga.), who decided to run hours before the vote.

JOIN 10/24 FOR AN UPDATE ON CHIPS: America is rapidly restructuring its semiconductor supply chain and manufacturing base, thanks in part to billion-dollar initiatives like the CHIPS and Science Act. But who is winning the reward? Join POLITICO Oct. 24 to get an update on CHIPS what other challenges have emerged now that the new era is underway? REGISTER NOW.

— Donald Trump tried to prod Germany to ban the Chinese tech giant, but former Chancellor Angela Merkel defied him. As Germany grows increasingly anxious about China, President Joe Biden is employing a different strategy with Merkel’s successor, John Sakellariadis and Lennart Pfahler report.

— The Commerce Department on Friday announced that it would allow two South Korean companies to sell certain less advanced microchip manufacturing equipment to their factories in China, Gavin Bade reports.

— A group of 30 House lawmakers is urging airlines to resume flights to Israel despite the ongoing conflict in the region, per Oriana Pawlyk.

— Google CEO Sundar Pichai is the latest tech chief to receive a letter from Brussels urging him to be “very vigilant” to ensure Hamas-connected disinformation and illegal content doesn’t spread on YouTube, per Clothilde Goujard.

— The White House is facing accusations that the Biden administration has left the U.S. vulnerable to a disruption of global oil supplies, per Ben Lefebvre.

— China’s foreign minister said Israel has gone too far in responding to last week’s invasion by Hamas, China’s official news agency reported, per David Cohen.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: [email protected], [email protected] and [email protected]. Follow us @POLITICOPro and @Morning_Trade.

A message from Autos Drive America:

Autos Drive America’s member companies—BMW, Honda, Hyundai, Kia, Mazda, Mercedes-Benz, Mitsubishi, Nissan, Subaru, Toyota, Volkswagen, and Volvo—produce some of the most popular and recognizable cars and trucks on the road right here in America. By eliminating barriers to trade and forging new partnerships around the globe, President Biden and his administration can help boost domestic manufacturing, create and sustain new, high-tech career paths, and enable Autos Drive America’s members to drive the American automotive industry forward. Learn more about how open trade policies help American workers and enable international automakers to continue Investing in US at AutosDriveAmerica.org.

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