Three West Virginia lawmakers asked CBP to reconsider its classification of steel profiles that are the subject of a petition with the agency (see 1904020048). Sens. Shelley Moore Capito (R), Joe Manchin (D) and Rep. Carol Miller (R) said in May 2 comments that a misclassification of the goods allows for importers of such products from the United Kingdom and Germany to avoid the Section 232 tariffs. Steel of West Virginia, which filed the petition, told the lawmakers that "steel special profiles represent an important part of Steel of West Virginia's product line, and their misclassification has hindered the company's ability to remain competitive and placed West Virginia jobs at risk." CBP "should take prompt action to ensure that these products are classified under the appropriate tariff category, ensuring the current Section 232 duty is being fairly collected," the lawmakers said.
After a day when the stock markets responded as if President Donald Trump's May 5 tweet about raising tariffs on Chinese goods was an empty threat, U.S. Trade Representative Robert Lighthizer told reporters from a number of national outlets that the new tariff rate -- jumping from the current 10 percent to 25 percent -- would take effect at 12:01 a.m. on May 10.
Calling the Section 232 exclusion process for steel and aluminum products "a master class in government inefficiency," Rep. Jackie Walorski, R-Ind., sent a letter to Commerce Secretary Wilbur Ross pointing out patterns of denials that she suspects mean the Commerce Department puts the burden of proof on requesters, not on the producers who object.
A bill was reintroduced that would require Congressional approval for any White-House initiated tariff change -- effectively curtailing future Section 201, 301 and Section 232 tariffs, as well as a not-yet-used authority to raise tariffs on all goods from a country where we run a trade deficit.
The Coalition for a Prosperous America recruited about 50 companies and a few local trade groups, such as the Tooling, Manufacturing and Technologies Association of Farmington Hills, Michigan, to sign a letter opposing Section 232 reform. Two bills have been introduced in both chambers that would give Congress more say on when the national security tariffs are levied. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, is working on a way to bridge the two bills. His bill would allow the president to implement tariffs for a period of time, but they could not continue without congressional approval. The letter, sent April 30, said giving Congress the authority to approve the tariffs rather than disapprove them "would be unprecedented and would effectively kill the Section 232 law." The letter notes that the 1962 law that allows these tariffs "expressly recognizes that our nation’s economic welfare is critical to national security."
International Trade Today is providing readers with some of the top stories for April 22-26 in case they were missed.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, wrote an opinion piece published in The Wall Street Journal April 28 that reiterated his often-expressed view that without the end of steel and aluminum tariffs on Canada and Mexico, the new NAFTA will not be ratified. He wrote: "If these tariffs aren’t lifted, USMCA is dead. There is no appetite in Congress to debate USMCA with these tariffs in place." Mexico and Canada have placed retaliatory tariffs on U.S. products, including agriculture, and Grassley said the Mexican tariffs on pork have lowered the value of each hog by $12.
The World Trade Organization formally adopted the Russia-Ukraine panel ruling, the first time the WTO tackled the national security exception from the General Agreement on Tariffs and Trade (see 1904120022). The case has implications for the Section 232 tariffs on steel and aluminum, which have hit U.S. allies as well as strategic competitors. The panel had found that the Russian Federation had met the requirements for invoking the national security clause in restricting transit of goods across its territory to Ukraine, because Russian seizure of Ukrainian territory (Crimea) counts as a time of international emergency.
Some experts are expecting President Donald Trump to announce a tariff plan in mid-May for autos -- even if he suspends implementation, as he did initially for Europe and NAFTA partners on steel and aluminum. But a new analysis says he has many ways to put off revealing his cards. The Section 232 statute gives the president the option to deliberate for an additional 180 days after the first 90-day deadline -- that would move the decision date to Nov. 14. Peterson Institute for International Economics economist Jeremie Cohen-Setton wrote that there are other options for Trump to keep holding the possibility of tariffs over European negotiators' heads without laying out exactly what would be taxed and at what level. He could ask for a supplemental analysis, or another agency to weigh in, which in past actions delayed a decision by more than a year and a half. He could terminate this investigation, but then quickly restart it. "A Section 232 investigation on oil was, for example, first initiated in 1973, then in 1975, and again resurrected in 1978," Cohen-Setton wrote.
The Senate Finance Committee chairman said that both China and the U.S. will step down Section 301 tariffs and the retaliatory tariffs in phases, with each side lifting the tariff at roughly the same time if they believe the other side is complying with a trade deal in good faith. He said the reductions will probably be done in tranches. "Over how long a period of time, I don't know," Sen. Chuck Grassley, R-Iowa, told reporters on a call on April 24. "But there won't be a 100 percent reduction of tariffs on the day the agreement's signed."