International Trade Today is providing readers with some of the top stories for June 25-29 in case they were missed.
Importers may need to up their customs bond amounts after the Section 301 25 percent tariffs take effect on goods from China, said Laura Siegel Rabinowitz, special counsel at Kelley Drye, in a June 28 blog post. "While bonds are based on imports for the previous twelve months, the time period is rolling and we expect CBP to be aggressively reviewing imports from China beginning on July 6," she said. Rabinowitz said that after "the Section 232 duties on imported steel and aluminum went into effect recently, CBP sent letters to certain importers giving them thirty days to increase their bonds to be commensurate with the new tariffs."
Russia recently began a World Trade Organization challenge of U.S. Section 232 tariffs on steel and aluminum products, the WTO said in a press release. Russia claims the tariffs violate the 1994 General Agreement on Tariffs and Trade and the WTO safeguard agreement. The country had already announced plans to retaliate. Under WTO rules, Russia may request a panel to decide the case if consultations don’t resolve the dispute in 60 days.
More than 2,000 people and organizations submitted comments on the idea of implementing higher tariffs on imported cars and car parts, with the overwhelming majority rejecting the idea. The National Association of Manufacturers noted that U.S. automotive exports increased eight-old from 1980 to 2017, and that imported parts are vital to automotive manufacturing's price competitiveness.
Canada imposed tariffs July 1 on products from the U.S. in retaliation for Section 232 duties on steel and aluminum products that took effect one month earlier. Tariffs begin at 10 percent and 25 percent on products found in Canada’s final list of tariff subheadings, which has some changes from an initial list released for public comment May 31 (see 1806010022), “and will remain in place until the U.S. eliminates trade-restrictive measures against Canadian steel and aluminum products,” Canada said. “The countermeasures will not apply to U.S. goods that are in transit to Canada on the day on which these countermeasures come into force,” it said.
CBP issued the following releases on commercial trade and related matters:
Whichever way the World Trade Organization decides on the validity of U.S. tariffs and quotas on metals and other countries' retaliatory tariffs, it hurts the rules-based system, said Jennifer Hillman, a Georgetown University law professor and former member of the WTO appellate body. Hillman spoke on a panel at a Global Business Dialogue trade policy association event. If the WTO says that a claim that an action was taken to protect national security -- when there's no war between the parties, and the item is not clearly war materiel, such as ammunition -- then almost any protectionist measure could be justified, she believes.
An effort to add an amendment to the Senate farm bill that would require approval from Congress for Section 232 tariffs to go into effect was stopped on June 27. Sen. Sherrod Brown, who said steel towns in his home state of Ohio have been devastated, blocked a vote on the amendment sponsored by Sen. Bob Corker, R-Tenn. Brown, a Democrat who largely supports President Donald Trump's approach on trade, said that Canada and Mexico "are primary targets for transshipment" of unfairly traded steel from China, and said that everyone has "seen the tricks China uses to get around the antidumping and countervailing duty laws."
The American Institute for International Steel and two companies filed a lawsuit June 27 at the U.S. Court of International Trade over the constitutionality of Section 232 of the 1962 Trade Expansion Act. The suit claims that Section 232 is unconstitutional because it delegates such broad authority to the president and there is no judicial review to those broad powers. "The lawsuit seeks a declaration that the law relied on by President Trump to impose that tariff is unconstitutional, as well as a court order preventing further enforcement of the 25% tariff increase," AIIS said in a news release. The trade group also asked that a three-judge panel hear its case, because that would allow an appeal to go straight to the Supreme Court.
New tariffs on goods from the U.S. exported to Turkey in response to Section 232 tariffs on steel and aluminum took effect on June 21, KPMG said on its website. An official June 25 notice from Turkey described the implementation of the new tariffs, a report from a KPMG firm in Turkey said. The new tariffs apply to the same subheadings listed in a World Trade Organization submission, though some of the tariff amounts differ, according to KPMG. "Retaliatory customs duty will be applicable on imports of US originated automobiles, whiskey, tobacco, coal, cosmetics, machinery equipment, paper and petrochemical products, etc.," the Turkish firm said. "Turkey will impose additional fiscal burden against various US origin goods between 4 percent to 70 percent. At the same time, [whiskey] and automobile importations will be subject to additional fiscal burden at the rate of 70% and 60% with an applicable highest rate."