Tariffs

Effective February 8, 2020, the U.S. will impose tariffs on derivative steel and aluminum imports.

Pursuant to a January 24, 2020 Executive Order, the current steel and aluminum 232 tariffs have been expanded to certain derivative goods. U.S. Customs & Border Protection Guidance has provided documention regarding the goods covered by the additional duties.

Derivative steel products will be covered by new HTSUS subheading 9903.80.03 and derivative aluminum products will be covered by new HTSUS subheading 9903.85.03.

The additional tariffs will be effective for affected goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EST on Feb. 8.

Derivative aluminum articles from Argentina, Australia, Canada, and Mexico, and derivative steel articles from Argentina, Australia, Brazil, Canada, Mexico, and South Korea, will be exempted from these tariffs.

The Bureau of Industry and Security will be establishing a process for requesting exclusions from these expanded tariffs (1) for any derivative article determined not to be produced in the U.S. in a sufficient and reasonably available amount or of a satisfactory quality, and (2) based on specific national security considerations. Exclusion requests may only be made by directly affected parties located in the U.S. Any exclusions granted will be retroactive to the date the request was accepted by the DOC.

Here is the list of steel derivative products subject to the new tariffs.

A lawsuit has already been filed seeking a restraining order against the expansion of the Section 232 steel and aluminum tariffs to derivative products and claiming that Section 232 of the Trade Expansion Act of 1962 is unconstitutional. Many legal experts are commenting that the action in expanding the steel and aluminum tariffs to derivative products does not comply with the requirements of Section 232 and thus is illegal.

Here is the list of the aluminum derivative products subject to the new tariffs.

The Peterson Institute for International Economics (PIEE) did a great policy analysis of the steel and aluminum derivatives tariffs. It is also provides data on its coverage and countries impacted.

On December 13, 2019, the U.S. and China reached a Phase One trade deal. It requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services and currency and foreign exchange.

Importantly, it includes a commitment by China to make substantial additional purchases of U.S. goods and services, most especially agricultural products. The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports. Here is the fact sheet put out by the Office of the U.S. Trade Representative (USTR). Here is the actual agreement.

Here is the Federal Register Notice suspending, until further notice, the additional duty of 15 percent on certain products of China, scheduled to take effect December 15, 2019.

This article originally appeared in the WIIT Summer Communique.

At a recent trade conference, White House officials described the Administration’s trade policy as “bold, creative and disruptive.” President Trump’s use of Section 232 of the Trade Expansion Act of 1962 to impose tariffs and quotas based upon national security concerns is one example of this new approach. Using this tool, on March 8, 2018, President Trump fulfilled a promise and imposed, effective June 1, 2018, a 25% duty on imports of steel products from all countries of origin except Argentina, Brazil and South Korea, which capitulated to quotas. He also imposed a 10% duty on imports of aluminum products from all countries, except for Argentina which also agreed to quotas. Australia was the only country spared tariffs or quotas on their metals. Details on the 232 tariffs appear on Customs & Border Protection (CBP) website.

Did you miss the GWU-CIBER/WITT/DEC 232 program about understanding Trump’s National Security Tariffs? You can watch the full video here.