With help from Doug Palmer, Eric Wolff and Adam Behsudi

THE YEAR OF RECKONING FOR TRUMP’S TRADE AGENDA: President Donald Trump entered the White House nearly a year ago promising aggressive action on trade policy and brimming with threats, but he did not deliver the punch many expected in 2017. That could change early this year, as the NAFTA talks come down to the wire, the administration’s investigation of Chinese trade policies ripens, and a number of tariff and trade decisions pile up on Trump’s desk, Pro Trade’s Doug Palmer reports this morning.

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January alone brings an impressive slate of trade deadlines and events, including a USTR hearing this week on a case involving imports of residential washing machines. Commerce Secretary Wilbur Ross faces a pair of statutory deadlines this month to deliver reports describing how imports of steel and aluminum represent a threat to U.S. national security. And in late January, the sixth round of talks to renegotiate NAFTA will take place in Montreal.

“We’re kind of on a knife’s edge in terms of timing,” said Chad Bown, senior fellow at the Peterson Institute for International Economics. “We’re going to know the answer very, very soon, if U.S. trade policy is going to change dramatically.”

Trump also has his finger on the trigger in no less than four major upcoming enforcement actions, and he must decide by April 1 whether to request a three-year renewal of trade promotion authority, which is vital to getting future trade deals through Congress.

Doug’s 2018 lookahead story is here, and Adam Behsudi lays out a timeline of major upcoming trade events here.

IT’S TUESDAY, JAN. 2! Welcome to Morning Trade, where your host is wishing everyone a happy 2018. Have any thoughts or tips on what may be in store for us on trade this year? Let me know: mcassella@politico.com or @mmcassella.

THIS WEEK: KORUS TALKS COME TO WASHINGTON: USTR will take a step toward fulfilling Trump’s promise to revamp the Korea-U.S. Free Trade Agreement when it holds formal talks in Washington on Friday, to begin discussing “potential amendments and modifications” to the five-year-old deal.

Michael Beeman, assistant U.S. trade representative for Japan, Korea and APEC, will take the lead for the U.S.

The negotiations come after officials from the two countries met twice last year to discuss U.S. concerns surrounding the agreement. Trump has repeatedly criticized the deal and threatened to withdraw from it unless South Korea agrees to changes to improve U.S. market access for exports and to bring trade between the nations into balance. Administration officials have focused in particular on the U.S. trade deficit in autos with Seoul.

But U.S. officials have so far not followed trade promotion authority procedures required to pursue major changes to the deal, suggesting they do not anticipate the talks will result in changes to U.S. law that would require congressional approval. Friday’s talks follow the recent completion of “related domestic procedures” in South Korea, USTR said in announcing the meeting.

OHIO, MICHIGAN LAWMAKERS WANT WASHING MACHINES HIT WITH TARIFF HAMMER: Republican and Democratic House members from Ohio and Michigan are urging the Trump administration to bypass the U.S. International Trade Commission’s recommendation and proceed to the toughest possible actions that U.S. companies Whirlpool and GE want to see imposed on imports of washing machines.

The congressional pressure in the ongoing global safeguard case was applied through three separate letters sent last month, preparatory to USTR’s hearing Wednesday to consider the appropriate action for Trump to take.

The U.S. International Trade Commission in November recommended that Trump restrict imports of washing machines and major components for a three-year period through a system of tariff-rate quotas, which would allow in up to 1.2 million units before imports are hit with a 50 percent tariff. The recommendation fell short of Whirlpool and GE’s desire to see a straight 50 percent tariff on imports and a strict quota on parts and components.

Whirlpool and GE, which have headquarters and manufacturing facilities concentrated in Michigan and Ohio, accuse South Korean companies Samsung and LG of “country hopping” to avoid duties imposed through previous trade cases. Samsung and LG argue that any major trade restrictions will only make it harder for them to get two large washing machine factories in South Carolina and Tennessee up and running.

Ohio Republican Rep. Jim Jordan urged U.S. Trade Representative Robert Lighthizer in a Dec. 19 letter to take “the strongest remedies necessary to deter manufacturers from engaging in this sort of production shifting in the future.” The rest of the Ohio delegation was more plainspoken in a separate letter, requesting that Lighthizer consider Whirlpool and GE’s recommendation of a flat 50 percent tariff rather than a TRQ.

Michigan’s House delegation, in a letter from Dec. 15, also pleaded for Trump to take up the petitioners’ proposal: “The proposed remedy, which includes a 50 percent tariff on washer imports coupled with a quota on covered parts, would address long-standing, unfair trade practices by foreign competitors and encourage greater economic investment in our communities.”

CANADA, U.K. TAG-TEAM BOEING: Canada and the United Kingdom made a last-ditch attempt to get Boeing to drop its case against Bombardier, which has already resulted in nearly 300 percent tariffs on imports of the Canadian aircraft maker’s C-Series jet. U.K. Prime Minister Theresa May and Canadian Prime Minister Justin Trudeau had previously urged Boeing to reverse course, and publicly threatened to cut off the U.S. aerospace giant from future procurement because of the negative economic impact the trade case may have on Bombardier’s operations in both Canada and the U.K.

But the two governments took the significant step of sending a joint letter that made a similar threat directly to Boeing Chairman and CEO Dennis Muilenburg. It was sent on Dec. 18, the same day the ITC heard final arguments in the case, including from Canadian and U.K. envoys. The trade panel is expected to hold a final vote on Jan. 26.

“The potential impact on jobs in Canada and the United Kingdom makes it difficult to sustain support for the procurement approaches that we have followed in the past, which have been of significant benefit to Boeing,” Canadian Foreign Minister Chrystia Freeland and Greg Clark, British Secretary of State for Business, Energy and Industrial Strategy, wrote in the letter.

Boeing, in a post-hearing brief filed last week, called it an “extraordinarily brazen letter” and called it an effort “to interfere with the integrity of this Commission’s proceedings through coercion and direct threats.”

USITC FILLS LEGAL GAP AS SOLAR TARIFF DECISION APPROACHES: President Trump has until Jan. 26 to decide whether to impose tariffs or quotas on international imports under a “safeguard” provision in U.S. trade law — and the U.S. solar industry has tried its best to sway Trump's decision. The U.S. International Trade Commission closed a key legal loophole over the break, issuing a report that argued the surge in Chinese solar production, which the agency said has harmed U.S. solar production, could not have been foreseen.

"Unforeseen by the U.S. negotiators ... the government of China implemented a series of industrial policies, five-year plans, and other government support programs favoring renewable energy product manufacturing, including CSPV products,” the agency said.

The document, which Lighthizer requested last year, will be critical if a future tariff is challenged under WTO rules. The WTO ruled against U.S. steel tariffs in 2003 in part because it felt the U.S. failed to prove that the rise of cheap steel manufactured overseas was unforeseen.

A LACK OF TRANSPARENCY IN TRUMP’S CABINET: Trump’s top Cabinet officials are carrying out government business under an unusual layer of secrecy, a POLITICO review of the practices of 17 Cabinet heads found. At least eight departments, USTR and Commerce included, routinely decline to release information on their heads’ planned schedules or travel — information that was more widely available during both the Obama and George W. Bush administrations.

From POLITICO’s Emily Holden: “Government watchdog groups and activists who closely follow the departments’ policies say the secrecy is more than just a Trumpian swipe at political enemies and a meddlesome news media: It’s an attempt, they say, to conceal the special access that some powerful interests have gotten in shaping policies that directly affect them.

‘How officials spend their time is the best window into what their priorities are,’ said Austin Evers, a former Obama State Department lawyer who heads the watchdog group American Oversight, which has sued for the calendars of EPA Administrator Scott Pruitt and Education Secretary Betsy DeVos. ‘When public officials resist public disclosure of what they do, people should be skeptical of what they're trying to hide.’”

Read the full story — with contributions from more than two dozen POLITICO employees — here.

LIGHTHIZER’S SCHEDULE SHOWS CLOSENESS WITH WHITE HOUSE: Since USTR does not release regular press guidance providing an overview of what Lighthizer is doing each day, it is impossible to monitor the universe of his meetings and conversations. But a copy of his daily calendar from October, which American Oversight requested and provided to Morning Trade, showed he interacted frequently with House and Senate lawmakers, held some meetings with union leaders and private-sector executives, and made a number of visits to the White House.

For Lighthizer, October included two meetings with Chief of Staff John Kelly, two more with adviser Jared Kushner, one with Peter Navarro, who heads the Office of Trade and Manufacturing Policy, and one with Vice President Mike Pence, the documents show. He also frequently spoke with lawmakers, like prominent Republican Sens. Bob Corker (Tenn.), Pat Roberts (Kan.) and John Cornyn (Texas) as well as Democratic Reps. Rosa DeLauro (Conn.) and Sander Levin (Mich.).

Other conversations included phone calls with AFL-CIO President Richard Trumka and meetings with John Neuffer, the president of the Semiconductor Industry Association, and Mary Barra, the CEO of General Motors.

TRUMP WARNS UKRAINE ON GSP BENEFITS, RESTORES ARGENTINA’S ELIGIBILITY: Ukraine could lose some of its benefits provided under the Generalized System of Preferences program because of a failure to “provide adequate and effective protection” of intellectual property rights “despite years of encouragement and assistance from the U.S. government,” the Trump administration announced just before Christmas. Trump gave Kiev 120 days’ notice to allow the government time to fix the situation.

Argentina was also reinstated to the GSP program in part because of commitments to improve market access for U.S. ag products and improved protection and enforcement of IP rights. And in another trade preference program, Gambia and Swaziland regained eligibility for the African Growth and Opportunity Act, USTR said.

Lighthizer said the moves “sent a clear message that the United States will vigorously enforce eligibility criteria for preferential access to the U.S. market. … Beneficiary countries choose to either work with USTR to meet trade preference eligibility criteria or face enforcement actions,” he said.

LIGHTHIZER ON THE HISTORY OF WINDER: The new year has everyone looking ahead, but in case you missed it, Doug filed an interesting feature over the holiday break on the history of the Winder Building, USTR’s home since 1981. Lighthizer showed some self-deprecating humor in late November, when he hosted current and former USTR employees and other members of the Washington trade community for a presentation on the building’s history, which dates to the late 1840s and is highlighted by Civil War footnotes.

“We are a combination of people who have done a lot for trade and people who are still doing a lot and some who are doing a little bit against trade,” Lighthizer told the audience. “You can decide for yourself which category I’m in.”

By the end of the nostalgia-laden evening, one attendee — former Deputy U.S. Trade Representative John Veroneau, who served in the George W. Bush administration — wondered aloud if the Winder Building shouldn’t be renamed for Montgomery Meigs, Union quartermaster general during the Civil War, who worked in the building. Read Doug’s story here.

TRADE REMEDY CORNER: AD/CVD CASES SURGE IN 2017: The Commerce Department initiated 82 anti-dumping and countervailing duty investigations in the Trump administration’s first year, up sharply from 2016 and the most in at least a decade, figures from the department and the ITC reveal.

The 2017 tally includes one anti-dumping and one countervailing duty investigation into imports of aluminum sheet from China that were “self-initiated” by Commerce, the first time that has happened in either category in at least 25 years.

Commerce launched the remaining 80 cases in response to formal industry petitions, the more traditional route. The final count includes 57 new anti-dumping duty investigations and 25 new countervailing duty investigations, compared with 36 and 16, respectively, in 2016, the figures show.

The number of cases generally varies from year to year, depending on several factors. There were just five new anti-dumping and countervailing cases in 2010, on the heels of the global financial crisis, which triggered a huge drop in both U.S. exports and imports. Since then, the number of new cases has fluctuated between a low of 14 in 2012 and a high of 66 in 2015.

Not every case leads to an anti-dumping duty or countervailing duty order, since the ITC sometimes finds that the domestic industry has not been materially injured or threatened with injury. Commerce issued 33 new anti-dumping orders and 11 new countervailing duty orders last year, compared with 32 and 16, respectively, in 2016.

RIBBON MANUFACTURER SEEKS DUTIES ON CHINESE IMPORTS: Just two days after the last gift was opened on Christmas Day, U.S. ribbon manufacturer Berwick Offray formally filed a petition with the Commerce Department and the ITC asking for anti-dumping and countervailing duties on import competition from China.

“The U.S. plastic decorative ribbon industry and its workers are suffering today as a result of dumped and subsidized imports from China,” Daniel Pickard, a partner at Wiley Rein who is representing Berwick Offray, said in a statement.

Commerce has 20 days, or until mid-January, to decide whether to initiate the case, but few petitions fail to clear that preliminary hurdle. An affirmative decision would set the stage for the first anti-dumping and countervailing investigations of the new year.

INTERNATIONAL OVERNIGHT

— Trump told the New York Times in an interview he has “been soft on China” on trade because of North Korea. Read it here.

— Gary Cohn and Steven Mnuchin are appealing to Trump’s business sense and trying to temper his hardline trade stance by telling him that the stock market is at an all-time high and imposing tariffs on materials like steel and aluminum would hurt it, Axios reports.

— Trump’s “America first” foreign policy is “making China great again,” the New Yorker reports.

— Trump’s record on fulfilling his trade promises is so far a mixed bag, with some fulfilled, some incomplete and some ignored, POLITICO Pro reports.

— Avocado growers in Mexico and the U.S. say that NAFTA renegotiations could benefit both countries, POLITICO Pro reports.

— NAFTA triggered a health crisis in Mexico that has contributed to rising levels of malnutrition and obesity, the Guardian reports in a photo story.

THAT'S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi@politico.com and @abehsudi; mcassella@politico.com and @mmcassella; dpalmer@politico.com and @tradereporter; jlauinger@politico.com and @jmlauinger; and pjoshi@politico.com and @pjoshiny. Also follow us @POLITICOPro and @Morning_Trade.