An effort to add an amendment to the Senate farm bill that would require approval from Congress for Section 232 tariffs to go into effect was stopped on June 27. Sen. Sherrod Brown, who said steel towns in his home state of Ohio have been devastated, blocked a vote on the amendment sponsored by Sen. Bob Corker, R-Tenn. Brown, a Democrat who largely supports President Donald Trump's approach on trade, said that Canada and Mexico "are primary targets for transshipment" of unfairly traded steel from China, and said that everyone has "seen the tricks China uses to get around the antidumping and countervailing duty laws."
Mara Lee
Mara Lee, Senior Editor, is a reporter for International Trade Today and its sister publications Export Compliance Daily and Trade Law Daily. She joined the Warren Communications News staff in early 2018, after covering health policy, Midwestern Congressional delegations, and the Connecticut economy, insurance and manufacturing sectors for the Hartford Courant, the nation’s oldest continuously published newspaper (established 1674). Before arriving in Washington D.C. to cover Congress in 2005, she worked in Ohio, where she witnessed fervent presidential campaigning every four years.
U.S. Trade Representative Robert Lighthizer released a lengthy criticism of retaliatory tariffs, saying U.S. tariffs on aluminum and steel are "wholly legitimate and fully justified" and that other countries "concocted a groundless legal theory" that the U.S. tariffs are safeguards rather than national security-based. "Faced with massive excess capacity that puts the very future of our steel and aluminum industries at risk, President [Donald] Trump took certain measures that he deemed essential to the national security of the United States," Lighthizer said in the June 26 statement. "These measures were implemented only after long and careful analysis, and after all trading partners had the chance to address our concerns."
The administration said it will wait for Congress to pass the Foreign Investment Risk Review Modernization Act, an update to current laws on the Committee on Foreign Investment in the United States rather than making its own restrictions on Chinese investment in American firms. As part of the Section 301 investigation, the treasury secretary was supposed to make recommendations on restrictions by June 30. President Donald Trump announced June 27, "I have concluded that [FIRRMA] legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity."
The American Institute for International Steel and two companies filed a lawsuit June 27 at the U.S. Court of International Trade over the constitutionality of Section 232 of the 1962 Trade Expansion Act. The suit claims that Section 232 is unconstitutional because it delegates such broad authority to the president and there is no judicial review to those broad powers. "The lawsuit seeks a declaration that the law relied on by President Trump to impose that tariff is unconstitutional, as well as a court order preventing further enforcement of the 25% tariff increase," AIIS said in a news release. The trade group also asked that a three-judge panel hear its case, because that would allow an appeal to go straight to the Supreme Court.
Lawmakers should vote for legislation to limit the president's ability to impose Section 232 tariffs, more than 60 national business groups and more than 200 local chambers of commerce and similar organizations pleaded with the Senate in a letter sent June 26. Sen. Bob Corker, R-Tenn., led a charge to give Congress a way to roll back the Section 232 tariffs on steel and aluminum and to block similar tariffs on imported cars, trucks and auto parts, but it stalled because Senate leaders said such a measure has to originate in the House of Representatives, as it affects revenue.
Whether the material was imported from South Korea, which is not eligible for exclusions at all; whether the filer was a law firm, an experienced importer, a one-time importer or a manufacturer -- the denial memos all read exactly the same. All of the denials say the application was not complete enough "to verify the product description and/or [Harmonized Tariff Schedule] code," and the requester can apply again without prejudice.
Harley-Davidson said retaliatory tariffs against its motorcycles in Europe cannot be passed on to consumers without massively impacting sales, so it will work on increasing capacity at its plants outside the U.S. to serve the European market. Harley-Davidson motorcycles sold into the European Union have faced a 31 percent tariff since June 22; before that, there was a 6 percent tariff. In a regulatory filing June 25, the Milwaukee-based company said it will have to eat between $30 million and $45 million in tariffs for the rest of 2018. It estimated it will take nine to 18 months to complete a ramp-up in capacity in other factories. The company has factories in India and Brazil, and is in the process of opening a factory in Thailand.
The one-year clock for product exclusions to the Section 232 tariffs starts the day the decision memo was signed, not the date a request was posted for comment, a Commerce Department spokesperson said June 25. So, for example, a request that was posted for comments on April 20 that the Bureau of Industry and Security approved on June 19 will apply until June 19, 2019. That one year starts on the date the deputy assistant secretary of export administration signed the memo, which was June 19, not on the original date of posting the request and not on the date the decision became public.
Two Republican senators who are retiring this year believe some of their colleagues will take a stand against the protectionist approach of the Trump administration. "Republicans need to stand up to tariffs," Sen. Jeff Flake, R-Ariz., said during a June 24 interview. "We're in the nascent stages of a full-scale trade war, and the president simply seems to want to escalate." He said until a bill (see 1806220014) that would require a vote on Section 232 tariffs moves, "I think myself and a number of senators, at least a few of us, will say, 'Let's not move any more judges.'"
On the same day that European tariffs went into effect in retaliation for U.S. steel and aluminum tariffs, President Donald Trump tweeted that if the European Union doesn't drop those tariffs and other trade barriers soon, "we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!" The Commerce Department is conducting an investigation into whether auto and auto parts exports are a threat to national security. While speaking to reporters at a convention on June 21, Commerce Secretary Wilbur Ross said the investigation should be complete in late July or in August.