The new General Approved Exclusions from Section 232 tariffs on steel and aluminum will be deployed in ACE as of 7 a.m. Dec. 29, CBP said in a Dec. 23 CSMS message. The Commerce Department announced the new GAEs in a Dec. 14 notice (see 2012100047). The GAEs exclude 108 entire Harmonized Tariff Schedule classifications from the tariffs on steel and 15 classifications from the aluminum tariffs, CBP said. “GAEs may be used by any importer and have no quantitative limit,” it said. “Exclusions are effective starting December 29, 2020, and no retroactive relief will be granted.”
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
New licensing requirements for aluminum products are now set to begin Jan. 25, 2021, under a Commerce Department final rule creating a new Aluminum Import Monitoring and Analysis System. Similar to the Steel Import Monitoring and Analysis System in place since 2005, the new scheme requires importers of aluminum or their customs brokers to submit information in an online portal to obtain an automatically issued license, then submit the license number with entry summary documentation.
Tomas Baert, head of trade and agriculture at the European delegation in Washington, said the European Union is looking for a “strong and united front with the United States” on trade as the region and the world recover from the fallout of the COVID-19 pandemic. Baert, who was speaking on a webinar Dec. 15 hosted by the European American Chamber of Commerce, said that while the Trump era was marked with “turbulence and tension” in trade, Europe feels like it escaped mostly unharmed, since there were not “massive tariffs” imposed on exported cars, trucks and auto parts, as was threatened.
House Ways and Means Committee Chairman Richard Neal, D-Mass., says that the new administration should prioritize a free trade deal with the European Union following the template of USMCA, saying President Donald Trump's abandonment of serious trade talks with Europe was a “particularly detrimental blunder.”
United Steelworkers recommended a candidate to the Joe Biden transition team for the next U.S. trade representative, and emphasized how important that USTR pick is to the union, President Tom Conway told a virtual audience for a webinar hosted by the Alliance for American Manufacturing. “We expect to see a bunch of friends we can work with,” Conway said Dec. 3. AAM is partly funded by the Steelworkers, and an AAM employee is volunteering on the USTR transition team.
House Ways and Means Committee member Stephanie Murphy, D-Fla., said that although “the politics of trade are fairly tricky,” she feels confident in saying “things can't get any worse” for free trade during the Biden administration. Murphy, one of two members of the House speaking on a Cato Institute webinar about what to expect in trade with a new president, said she's encouraged by President-elect Joe Biden's choices for the secretaries of the treasury and state, and the head of the National Security Council, because all of the individuals recognize that trade is an important tool in foreign policy.
The Coalition for a Prosperous America published advice to the transitioning Joe Biden administration, which includes a call to continue and intensify the kind of tariff and sanctions policies used by the Trump administration, and to go further, such as by raising the bound tariffs at the World Trade Organization. The CPA also asked for countrywide withhold release orders for forced labor, a reduction of the $800 de minimis level and a change in the makeup of the Commercial Customs Operations Advisory Committee. “The membership of COAC should equal representation by domestic businesses and labor harmed by unlawful imports, rather than being dominated by multinationals and importer interests,” they said.
Steptoe & Johnson trade lawyers say that although President-elect Joe Biden will be interested in repairing strained relationships with the European Union, and will be less inclined to use unconventional trade tools like Section 232 and the International Emergency Economic Powers Act, the trend of policymakers pushing reshoring and decoupling won't abate.
While it seems clear that Joe Biden wants to “team up with our allies” to confront China, less clear is how that will work in reality, Mayer Brown international trade lawyer Tim Keeler said during a Nov. 17 Mayer Brown webinar about trade policy in the incoming administration. Keeler, who is a former chief of staff in the Office of the U.S. Trade Representative, said a majority of Congress believes the Section 301 tariffs have been a source of leverage, while the European Union thinks the tariffs violated World Trade Organization rules.
There are still three pending Section 232 investigations, and the one on downstream electrical steel products is already at the White House, so you shouldn't be surprised if the Trump administration hikes tariffs on more products on the way out the door, according to Halie Craig, the former trade staffer for Sen. Pat Toomey, R-Pa. Craig, who was speaking on behalf of the R Street Institute, a pro-market think tank, also said she wonders if there will be more action against China, since the country is not on track to meet its phase one purchase targets.