Product Exclusions Ending; Aluminum 232 Tariffs Going to 25%; Begins March 12
President Donald Trump signed an executive order Feb. 10 that will hike tariffs on imported aluminum to 25%, ends quota arrangements with the EU, South Korea and Brazil in steel and aluminum, and curtails both product exclusions and the exemptions for Canada and Mexico.
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The action will expand past the products covered by existing Section 232 tariffs to some downstream products.
Reporters at the White House who participated in a background briefing said fabricated structural steel and pre-stressed concrete strand are among the products that will be newly covered.
The European Commission issued a statement ahead of the action that said: "The EU sees no justification for the imposition of tariffs on its exports. We will react to protect the interests of European businesses, workers and consumers from unjustified measures."
The return of tariffs for exempt and quota countries will take effect March 12. Current general approved exclusions will be terminated, and the product exclusion process will end, the official said on background.
The action "applies a strict melted and poured standard to prevent circumvention," the official said, but did not explain if that was to distinguish semifinished aluminum and steel from China and Russia, which is subject to even higher tariffs, undergoing substantial transformation in another country, or whether metal smelted or melted and poured in Mexico or Canada could still enter duty free.
The text of the proclamation was not published by press time.
RSM chief economist Joseph Brusuelas noted on social media that Canada would be hurt most of all, since the U.S. imports $11.2 billion worth of steel and $9.5 billion worth of aluminum from Canada. Mexico exports $6.5 billion in steel and less than $700 million worth of aluminum, he wrote.
The American Primary Aluminum Association, who originally pushed for a global 10% tariff on aluminum under Section 232, didn't respond to a request for comment.
The larger Aluminum Association trade group, which never supported the action, didn't issue a comment after Trump's remarks over the weekend on hiking the tariff on imported aluminum, but had responded to his earlier threat to impose 25% tariffs on all Canadian imports, which would have the same effect.
Its leadership said that U.S. aluminum production and fabrication "relies on imports of upstream aluminum, both smelted and scrap, from Canada."
Canadian aluminum shouldn't be hit with 25% tariffs, the group said, rather Canada and Mexico should harmonize their tariffs on imported aluminum products.
"The U.S. industry sources around 2/3 of the primary aluminum it uses every year from Canada, since all U.S.-based smelters, even running at full capacity, cannot produce nearly enough metal to meet demand. And about 90% of U.S. scrap imports come from either Canada or Mexico. It would take billions of investment over decades to make the United States fully self-sufficient for its metal needs," the association said.