On 31 May 2018, President Trump issued two significant Proclamations related to the Section 232 duties on steel and aluminum he had put into effect last March. Specifically, the Proclamations impact the temporary exemptions from those duties the President had established in respect of imports from Argentina, Australia, Brazil, Canada, Mexico, South Korea and the member states of the EU. In essence, the Proclamations effect the following changes as from 1 June in respect of imports from those countries:
- The 25% duty becomes effective in respect of imports from Canada, Mexico and the EU member states.
- The duty does not apply to imports from Argentina or Brazil (for which quotas are established), or from Australia (in addition to imports from S. Korea which had previously been excluded).
- The 10% duty becomes effective in respect of imports from Canada, Mexico, Brazil and the EU member states (It had previously taken effect in respect of imports from S. Korea).
- The duty does not apply to imports from Argentina (for which a quota is established) or Australia.
Canada's Response and Request for Comments by 15 June
Canada has proposed countermeasures that will take effect on 1 July 2018 and is seeking written comments on these measures by 15 June 2018. Canada's proposed countermeasures will impact imports of certain US origin goods, including, among others, steel and aluminum products, food products, articles of plastic and paper products. Click here to read our full client alert on this topic.
Other Affected Countries
Other affected countries also announced plans to establish retaliatory tariffs on US products. Mexico, for example, specified flat steel, lamps, pork, processed meat, apples, grapes, cranberries and cheeses. The EU had previously indicated its target list includes products such as bourbon, motorboats, cranberries and jeans.
Retaliatory tariffs had previously been notified by other countries – including India, Japan, Russia and Turkey – whose products had not been exempted from the Section 232 duties. China’s retaliatory duties – on products such as aluminum waste, scrap, pork, fruit and nuts – have been in place since last April.
These Section 232 developments regarding metals come on the heels of the US Department of Commerce’s 23 May announcement of its launch of another Section 232 investigation – this one into whether imports of cars, SUVs, vans, light trucks, and automotive parts impair the national security interests of the United States.
Most members of the WTO take the position that these Section 232 actions are not based on “national security” issues but rather constitute “safeguards” to control imports, meaning they are subject to the WTO Agreement on Safeguards. Several counties have already filed WTO disputes on the subject.
The activation of the Section 232 tariffs in respect of Canadian and Mexican steel and aluminum products will most likely impact the ongoing NAFTA negotiations.
Meanwhile, on 29 May the White House re-confirmed that it is proceeding with its Section 301 actions targeted at China. Among other measures, the US “will impose a 25% tariff on $50 billion of goods imported from China containing industrially significant technology,” the list of covered imports to be announced by 15 June. See our previous Section 301 alerts here and here.
How We Can Help
This is an opportune moment for businesses with integrated international supply chains to review and possibly adjust their sourcing and trade compliance strategies. We have a dedicated team of international trade and commercial experts who are able to help companies navigate these changes.