BIS Investigations on Copper and Lumber Imports Reflect Intent to Scrutinize Trade More: Attorneys
Two Section 232 investigations launched March 10 by the Commerce Department -- one on copper, the other on lumber -- serve as harbingers of potentially more trade activity to come, attorneys with the law firm Pillsbury said during a webinar on "DC Disrupted: Upcoming Tariffs & Trade Actions," said after notices seeking comments on the investigations had been posted.
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"This foreshadows, I think, other [Section] 232 actions we can see on semiconductors, pharmaceuticals," trade attorney Julian Beach said during the webinar. "We know that the incoming BIS undersecretary and the administration are focused on using 232 as a tool, and that the definition of a product or commodity whose imports may impair the national security will continue to grow [and] expand."
The investigations on the imports of copper and lumber also will involve looking into the derivatives of each sector, according to the Pillsbury attorneys. This might include paper for lumber, as well as associated copper products such as copper concentrates, refined copper and copper alloys, in addition to copper derivatives.
As the Commerce Department undertakes this examination, it will be looking at challenges the copper industry currently is facing, such as the lack of smelting, the foreign manipulation of pricing, unfair practices and potential export risk restrictions, among other factors, according to Pillsbury trade attorney Sahar Hafeez.
Still other trade actions that could be undertaken this spring by President Donald Trump include reciprocal tariffs, potential auto tariffs, more investigations under Section 301 addressing fair trade practices, and potentially longer processes involved when conducting Section 232 investigations, Hafeez said.
As companies grapple with tariff uncertainties, Hafeez said that her law firm has been advising clients to assess their risk and exposure to tariffs by undertaking measures such as knowing what contracts an individual company might have in its supply chain, including whether there are clauses within the contract that discuss changes in trade policy issues.
Companies contacting Pillsbury also have had questions about country of origin rules, according to Hafeez. For country of origin rules under the USMCA, there are specific rules around whether there is a tariff shift and whether the regional value content is met, Hafeez said. There also is the substantial transformation rule, which tests and confers the origin of the product, and there are customs rulings that address conditions describing substantial transformation, she said.
“A lot of importers probably have not considered or given very careful consideration to what they’re declaring on their customs paperwork … [but] it’s very important to think about what you’re declaring as the valuation, because that's what the Customs is going to take the tariff based on,” Beach said.