Section 232 Tariffs

The process for importers to get product exclusions from Section 232 tariffs on steel and aluminum items is too slow, and too burdensome, according to 39 members of the House of Representatives, from both parties, who have suggestions for how to change it. Their letter, sent May 7 to the Department of Commerce, says that retroactive relief from tariffs should date back to the date of submission, not the date of posting, unless the submission was not initially complete. In that case, the lawmakers say, the refund should be from the date the submission was complete, rather than the date it was publicly posted.

The chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee told Commerce Secretary Wilbur Ross that his replies on how the department weighed the issues before recommending Section 232 tariffs were incomplete -- and said that if his next letter isn't an improvement, the committee may have to consider compelling his testimony. The letter, sent May 3, gave Ross two weeks to reply. "Clearly, these tariffs will have a much more far-reaching effect on downstream industries and consumer prices than explained in your response," Senators Ron Johnson, R-Wis., and Claire McCaskill, D-Mo., wrote. They said Ross failed to provide detailed cost-benefit analyses on the tariffs' effects, or analyses of prior tariffs' effects on downstream industries or prices. They also said he declined to say how the agency is going to measure success of the tariffs.

President Donald Trump's proclamations on the latest extensions to country exemptions on the Section 232 tariffs (see 1804300064) will be published in the Federal Register on May 7. The proclamations on steel and on aluminum say that while Canada, Mexico and the European Union face a June 1 deadline to agree to "satisfactory alternative means" to ameliorate the national security threat their imports cause, Australia, Brazil and Argentina do not have an expiration date on their exemptions. The president said since those countries have reached agreements in principle, he didn't think a deadline was necessary. But if those agreements are not finalized promptly, he reserves the right to impose tariffs.

The International Trade Commission released Revision 4 to the 2018 Harmonized Tariff Schedule, making several changes related to recently imposed Section 232 tariffs on aluminum and iron and steel products. The updated tariff schedule includes a series of new tariff subheadings in chapter 99 used to administer quotas on South Korean steel that form part of that country’s exemption agreement, as well as new language in the subchapter notes to chapter 99 on the Section 232 tariffs. The changes took effect May 1.

Argentina and Brazil recently agreed to deals resulting in permanent exemptions from Section 232 tariffs on iron and steel products and aluminum products. Argentina will be exempt from tariffs on both aluminum and steel after agreeing to new quotas on each. Brazil, on the other hand, remains subject to 10% aluminum tariffs after rejecting quantitative restrictions, though it will get an exemption from the 25% tariff on steel.

Extended exemptions from Section 232 tariffs on aluminum and steel left some countries and importers relieved, but others uncertain as to what is around the corner on June 1. Announced the evening of April 30 just hours before the deadline, the proclamations on steel and aluminum announce full, if undefined, exemptions for Argentina, Brazil and Australia, the final details of a steel exemption for South Korea, and a delay until the beginning of June 1 for Canada, Mexico and the European Union.

President Donald Trump extended exemptions from Section 232 duties on steel and aluminum until June 1 for the European Union, Canada and Mexico. He also announced the U.S. has reached agreements in principle on exemptions from tariffs for Brazil, Argentina and Australia, alongside a final agreement on steel tariffs with South Korea.

Only one of the allies that have so far avoided tariffs on their steel and aluminum exports to the U.S. has agreed to reducing the volume of those exports -- and Commerce Secretary Wilbur Ross says all will have to if they don't want to face tariffs. "If people don't have the tariffs, and they don't have the quota, that would defeat the whole purpose of the [Section] 232s," he said, which is to boost aluminum and steel production domestically. Since the temporary tariff exemptions for the European Union, Canada, Mexico, Brazil, Argentina and Australia end May 1, it remains to be seen if countries in talks with the U.S. will get another extension.

Discussions of auto rules of origin are getting more specific as NAFTA talks continue, according to Canada's Foreign Minister Chrystia Freeland, who spoke to reporters outside the headquarters of the Office of the U.S. Trade Representative on April 25. "We are starting to get into a more detailed conversation, which is absolutely necessary, given the fiendish complexity of rules of origin for cars -- and I think it's a really good thing we're starting to dig into the details," she said. Some say that the U.S. has compromised very little on its higher rules-of-origin demands (see 1804230048), as U.S. Trade Representative Robert Lighthizer is not convinced by auto companies' complaints.

Benefits under the Generalized System of Preferences (GSP) mostly won't apply to goods subject to recently implemented tariffs on solar panels, washing machines, aluminum and steel, said CBP in on its website. President Donald Trump imposed new Section 201 safeguard tariffs on imports of large residential washers and solar cells and modules in January and Section 232 tariffs on steel and aluminum in March.