Lawyers: Broadness of Section 232 Tariffs, or Phase-In, Can Be Influenced
Trade restrictions in pending Section 232 investigations for copper, lumber, semiconductors, pharmaceuticals, critical minerals, heavy-duty trucks, commercial aircraft and engines, polysilicon and drones are a foregone conclusion, but "exactly what those trade measures will look like" has not been decided, Steptoe's Jeff Weiss said during a firm webinar.
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"That is going to be a function of the advocacy that goes into it," he said, both from domestic stakeholders and from members of Congress. More tailored measures, or phased-in measures, are possible.
Weiss said importers should submit comments, but "the informal process is even more important."
Steptoe has been meeting both with the executive branch and with Congress members and staff on these investigations.
"We understand there are several other potential investigations in the queue," he added.
Weiss and colleague Eric Emerson spoke at a July 16 webinar called: "US Trade Policy in Flux: Tariffs, Litigation, Dealmaking, and What Comes Next."
Weiss noted that categories that are carved out from reciprocal tariffs, such as electronics, semiconductors, lumber products, medicines and so on, are subject to Section 232 tariffs or could be subject to them after 232 remedies are devised.
"It may be that that was just a temporary respite," he said.
Weiss said the Section 232 statute gives the Commerce Department as long as nine months to finish a study, but in this administration, it's expected the studies will take far less time, as there are no public hearings, and the comment periods tend to be shorter.
"We’re expecting to hear the final outcome on a number of these before the August break," he said.
He said the copper report would have been released already, but he doesn't think the Commerce Department was recommending 50% tariffs, so after the president said that would be the rate, "I think there has to be some discussion; some changes to the remedy."
Weiss once was assistant general counsel in the Office of the U.S. Trade Representative, and was the lead U.S. lawyer in the 2006 softwood lumber agreement between the U.S. and Canada that replaced antidumping and countervailing duties with a managed trade regime.
He said that as a former government official, he can say the best scenario is when two trading partners come in together, saying they have a solution to an irritant.
He said the first question people should expect in a meeting with a government official -- if I fulfill your request, "who's going to come in and complain?"
Weiss and Emerson also gave advice to importers trying to manage the ever-changing rates.
Weiss said companies should adjust supply chains where there is too much dependence on a certain supplier or country, and understand who bears the responsibility for sudden increases in duties in contracts, and to pay attention to duty liability in future contracts.
"It is difficult to know what changes to make [when] the numbers keep changing, and the rules keep changing," he said.
Emerson called it "surprising how even some very sophisticated companies haven’t put [incidence of duty clauses] into their agreements, even now."