Presented byGary Stanley & Brian LedgerwoodOffices of Materials IndustriesIndustry & Analysis/International Trade AdministrationU.S. Department of Commerce

Expanding Global Market Opportunities for U.S. Building Materials Exports

Presented atNational Association of Home Builders

International Builders ShowLas Vegas, NevadaFebruary 20, 2019

AGENDA

I. Trade Policy Issues▪ United States–Mexico–Canada Agreement

Modernizing into a 21st Century Trade Agreement▪ Section 232 Tariffs▪ Section 301 Tariffs▪ Trade Negotiations: Japan, the European Union, United Kingdom

II. Identifying Promising Markets for U.S. Building Products Exports▪ Traditional tools▪ Identifying new market demand

▪ “Generation Next” - Shifting the focus to highlight new growth

I. Trade Policy Issues

President’s Trade Policy Agenda – February 2018

5 Major Pillars

1) Supporting Our National Security

2) Strengthening the U.S. Economy – Manufacturing, Jobs

3) Negotiating Better Trade Deals – Ensure U.S. Industry Competitiveness

4) Aggressively Enforcing U.S. Trade Laws – Ensure Level Playing Field

5) Reforming the Multi-Lateral Trade System

United States–Mexico–Canada Agreement (USMCA)

Principal Areas of Interest:▪ Market access (tariffs) – Continued duty-free market access for forest

products ▪ Trade facilitation – Supportive customs rules and border procedures to

smooth trade flows and reduce costs▪ Regulatory –Increase transparency, cooperation, and regulatory

coherence▪ Fair competition – Enforcing trade laws, eliminating market-distorting

subsides and practices, fighting currency manipulation and putting constraints on State Owned Enterprises (SOEs)

Primary Focus: ✓NAFTA generated significant gains for forest products trade✓USMCA Maintains existing benefits & expands trade opportunities

via free and fair trade

Section 232: Steel and Aluminum Tariffs

▪ Section 232 Investigations: The Effect of Imports on the National Security conducted under the Trade Expansion Act of 1962, as amended

▪ February 16, 2018: Steel and Aluminum Section 232 Investigation Reports Released by Secretary of Commerce

▪ March 8, 2018: President Trump exercised his authority to impose:▪ 25% tariff on certain steel imports▪ 10% tariff on certain aluminum imports

▪ Tariffs went into effect on March 23, 2018 for most countries

Product Scope (HS codes) Additional Tariff Country Scope - TariffsCountry Scope –Absolute Quota

Steel

7206.10 through 7216.50; 7216.99 through 7301.10; 7302.10; 7302.40 through 7302.90; and 7304.10 through 7306.90

+25%

+50% for imports from Turkey

All countries of origin except Argentina, Australia, Brazil, and South Korea

Argentina, Brazil, and South Korea

Aluminum7601; 7604; 7605; 7606; 7607; 7608; 7609; 7616.99.51.60; 7616.99.51.70

+10%All countries of origin except Argentina and Australia

Argentina

Section 232: Steel and Aluminum Tariffs

Exclusion Process▪ Individuals or organizations using steel or aluminum articles and engaged in business

activities in the United States may submit exclusion requests. Commerce will evaluate exclusion requests, taking into account national security considerations and whether a product is produced in the United States of a satisfactory quality or in a sufficient and reasonably available amount.

▪ www.regulations.gov Steel: Docket # BIS-2018-002; Aluminum: Docket # BIS-2018-0006

Additional Information ▪ www.commerce.gov/232▪ https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-

aluminum-and-steel▪ https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-

aluminum-and-steel/faqs

Points of Contact▪ Bureau of Industry and Security, U.S. Department of Commerce

Steel: (202) 482-5642, Steel232@bis.doc.govAluminum: (202) 482-4757, Aluminum232@bis.doc.gov

▪ CBP: traderemedy@cbp.dhs.gov

Section 301 – Tariffs on Imports from China

Trade ActionDate Tariffs

Went Into EffectAdditional Tariffs

Products/Tariff Lines Impacted

Initial $34 Bill. July 6, 2018 25% 818

Addl. $16 Bill. Aug. 23, 2018 25% 279

$200 Bill. Sept. 24, 201810% now; was to increase to 25% on Jan. 1, 2019 – decision delayed until

March 20195,745

▪ U.S. Trade Representative (USTR) investigated government of China’s acts, policies, and practices related to forced technology transfer, intellectual property and innovation under Section 301 of the Trade Act of 1974

▪ Section 301 Investigations launched August 2017. Following a thorough analysis of available evidence, USTR, with the interagency Section 301 Committee, determined that numerous acts, policies, and practices of the government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory, and burden or restrict U.S. commerce. This investigation was updated on November 20, 2018, and found that China had not fundamentally altered its practices.

SECTION 301 – Tariffs on Imports from China

Public Comment Process▪ Each tariff list was open to a 30 day comment period, as well as multi-day public hearings.

Exclusion Process▪ USTR has a process where U.S. stakeholders may request that particular products, on the first

two lists, classified within a covered tariff subheading be excluded from the duties. USTR will issue decisions on a rolling basis.

▪ More info: https://ustr.gov/issue-areas/enforcement/section-301-investigations/request-exclusion

Additional Information▪ USTR Section 301 Investigation & Tariff Response Actions: https://ustr.gov/issue-

areas/enforcement/section-301-investigations/record-section-301-investigation▪ CBP: https://www.cbp.gov/trade/programs-administration/entry-summary/section-301-

trade-remedies; https://www.cbp.gov/trade/programs-administration/entry-summary/section-301-trade-remedies/faqs

Points of Contact▪ USTR: Section 301 Hotline: (202) 395-5725▪ CBP: traderemedy@cbp.dhs.gov

Trade Negotiations:Japan, European Union, & the United Kingdom

On October 16, 2018 - At the direction of the President, USTR Robert Lighthizer notified Congress that the Trump Administration intends to negotiate three separate trade agreements with Japan, the European Union (EU) and the United Kingdom

▪ The USTR is committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers, and businesses

▪ The USTR is following the procedures set out in the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 – referred to as Trade Promotion Authority (TPA) – which requires ongoing consultations with Congress

▪ These consultations ensure that USTR develops negotiating positions with the benefit of Congress’ views

▪ USTR will also publish notices in the Federal Register requesting the public’s input on the direction, focus, and content of the trade negotiations – Public hearings on Negotiating Objectives for U.S.-Japan / U.S.-EU Trade Agreements held on Dec. 10, ‘18 & Dec. 14, ‘18

▪ In accordance with TPA, USTR will publish objectives for the negotiations at least 30 days before formal trade negotiations begin

II. IDENTIFYING MARKETS FOR U.S. BUILDING PRODUCTS EXPORTS

▪ Global opportunity ▪ U.S. products are globally competitive on a

level playing field

▪ U.S. building products export markets are “dense”▪ The vast majority of U.S. exports go to the

Top 7 markets – 73% in 2018*▪ Canada and Mexico dominant + China

increasing export market share▪ In the past 10 years, there have been only

modest changes to the Top 7 market list

▪ Combined and even subsector-specific export trends alone do not tell us enough to identify opportunities

U.S. Building ProductsTotal Annual U.S. Exports

2018 Projected: $88.6 billion(based on annualized Jan-Oct data)

Wood Products2016: $8.3 billion2017: $8.1 billion2018: $8.1 billion projected

Plumbing Products 2016: $1.07 billion2017: $1.09 billion2018: $1.2 billion projected

Asphalt2016: $599 million2017: $610 million2018: $716 million projected

HVAC Equipment2016: $18.3 billion2017: $18.5 billion2018: $18.8 billion projected

Plaster & Gypsum Board 2016: $233 million2017: $207 million2018: $217 million projected

Cement & Concrete2016: $442 million2017: $466 million2018: $475 million projected

Metal Products2016: $22.2 billion2017: $22.9 billion2018: $24.5 billion projected

Insulation 2016: $991 million2017: $1.04 billion2018: $1.12 billion projected

Masonry & Stone2016: $211 million2017: $225 million2018: $238 million projected

Electrical Systems & Lighting 2016: $20.5 billion2017: $21.3 billion2018: $22.7 billion projected

Appliances2016: $3.12 billion2017: $3.11 billion2018: $3.12 billion projected

Glass2016: $1.1 billion2017: $857 million2018: $787 million projected

Paints, Adhesives & Plastics2016: $4.1 billion2017: $4.3 billion2018: $4.6 billion projected

Doors & Windows2016: $768 million2017: $751 million2018: $732 million projected

Miscellaneous Other2016: $1.04 billion2017: $1.16 billion2018: $1.24 billion projected

▪ 223 U.S. building product export markets around the globe

▪ Exports evenly split between developed and developing countries

($ volume)

2018 Export Competitiveness Profile

Advanced/DevelopedCountries

50.01%

DevelopingCountries

49.99%

U.S. Building Product Export Destinations

U.S. Building Product Exports: Traditional Major Market Approach Top 7 Markets

2008 Top 7 (67% of total exports) 2018 Top 7 (73% of total exports)

Market % Total Market % Total

Canada 32.08% 1 Mexico 27.28%

Mexico 19.21% 2 Canada 26.98%

China 5.28% 3 China 7.66%

Japan 3.00% 4 Germany 2.99%

UK 2.85% 5 Japan 2.84%

Germany 2.45% 6 UK 2.78%

Korea 2.19% 7 Korea 1.98%

PLUMBING PRODUCTS

2018 U.S. Exports: $1.2 billion

HVAC2018 U.S. Exports:

$18.8 billion

WOOD PRODUCTS2018 U.S. Exports:

$8.1 billion

6 KEY BUILDING PRODUCT SUBSECTORSCOMBINED U.S. EXPORTS 2018: $52.65 BILLION

(= approx. 59.43% of tot. U.S. bldg. prod. exports of $88.6 billion in 2018)

WINDOWS & DOORS

2018 U.S. Exports: $732 million

ELEC. SYSTEMS & LIGHTING

2018 U.S. Exports: $22.7 billion

INSULATION2018 U.S. Exports:

$1.12 billion

$0

$10

$20

$30

$40

$50

$60

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*

Bill

ion

s

PLUMBING WOOD INSULATION HVAC WINDOWS ELEC SYS & LIGHT'G

Growth from $34.2 billion to $52.6 billion since 2009

U.S. Building Product Export Portfolio Growth6 Key Subsectors

17

Major Market ApproachTop Markets: Building Products and Sustainable Construction

HVACR, lighting, plumbing products, wood products, insulation, doors and windows, glass

• U.S. export market rankings (2018)Driven by existing subsector-specific trade data

• Global trends driving opportunity for 7 sub-sectors

• State of global trade

• Exporter challenges and USG resources

• 10 country case studies (market overviews)

www.trade.gov/topmarkets

ITA’s U.S. Commercial Service

• Teach exporting basics

• Assist in developing a company’s export strategy

• Assist in selecting overseas markets and identifying customers

• Promote trade events to bolster brand awareness and market exposure San Juan

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ITA Trade Specialists in 106 U.S. Export Assistance Centers

ITA’s Global Footprint

119 overseas posts in 77 markets

▪ Market intelligence▪ Country Commercial Guides▪ Affordable consulting services:

▪ Customized business matchmaking

▪ International Partner Search

▪ Gold Key Service▪ Other

Thank YouGary Stanley

Director, Office of Materials IndustriesU.S. Department of Commerce

Tel: 202.482.0376Gary.Stanley@trade.gov

Brian LedgerwoodSenior International Trade Specialist

Office of Materials IndustriesU.S. Department of Commerce

Tel: 202.482.3836Brian.Ledgerwood@trade.gov