Section 232 Tariffs

An amendment aimed at requiring a vote from Congress before Section 232 tariffs can be imposed was blocked in the Senate on June 12. Sen. Bob Corker , R-Tenn., said he understood that all the powers in the Senate were arrayed against his effort receiving a vote. His proposal would have not only required that Congress approve any tariffs against auto parts and autos based on national security grounds, but also would have been retroactive, so that Congress could have rolled back the 232 tariffs on steel and aluminum (see 1806060018). The amendment was blocked on a procedural technicality -- that bills that affect revenue must start in the House of Representatives -- but Corker said on the floor of the Senate it was clear that wasn't the true reason. He said that Republican senators were fearful of upsetting the president. He said what he's been told since he proposed attaching his amendment to the defense authorization bill was: "Don't poke the bear!"

The Coalition of American Metal Manufacturers and Users posted a "comprehensive list of retaliatory tariffs" as of June 11. The list covers retaliatory tariffs, either currently in effect or proposed, from Canada, China, the European Union, India and Mexico. "Other countries including Japan, Russia and Turkey have warned of potential retaliation but have not announced formal tariffs," the group said. The tariffs are in response to Section 232 tariffs on U.S. imports of steel and aluminum. The Mexican tariffs took effect on June 5 (see 1806050041), while Canada's take effect July 1 and the EU's on June 20 (see 1806010022). China's tariffs took effect April 2, and India's take effect on June 21.

President Donald Trump has repeatedly vowed to raise tariffs on longtime allies because, in his view, they have ripped off America. But at a post-G-7 press conference, he laid out the consequence if they don't drop their tariffs to the same level as the U.S. "It's going to change. They have no choice. If it's not going to change, we're not going to trade with them," he said. He listed Canada, the European Union -- which he called "brutal" -- and India as offenders that could be barred from exporting to the U.S.

BALTIMORE -- The first round of Section 232 product exclusions should be released soon, said Rich Ashooh, assistant secretary for export administration at the Department of Commerce. "The [Commerce] secretary is very anxious to reach that milestone," he said in response to a question from International Trade Today. Ashooh spoke at the annual American Association of Exporters and Importers Conference June 7.

It's not clear that the president's authorities under Section 232 allow for the elimination of drawback, law firm Neville Peterson said in a blog post. President Donald Trump said in April that drawback would not be allowed for entries subject to the Section 232 tariffs (see 1804300064). "While this is a close question, the President’s power under Section 232 is limited to 'adjust[ing] imports,'” the law firm said. "It seems unlikely that the President can take action respecting exports, the activity which generally triggers claims for duty drawback."

Companies that have made requests for product exclusions on South Korean, Brazilian or Argentinian steel imports will be denied, a Commerce Department spokesman said June 6. The proclamation only makes product exclusions available to goods imported from countries that face tariffs, not to those that have exports constrained by quotas. Brazil is the second-largest steel exporter for the U.S., and South Korea is third.

Proclamations ending exemptions from Section 232 tariffs on steel and aluminum for the European Union, Mexico and Canada, and setting new quotas on the products from Argentina and Brazil, were published June 5. Presidential Proclamation 9758, issued May 31 includes an annex detailing new quotas on Argentina aluminum, part of that country’s agreement with the U.S. to avoid the 10 percent tariff. Presidential Proclamation 9759, also issued May 31, sets new quotas on iron and steel products from Argentina and Brazil, with many quota amounts set from the beginning at zero, as well as other changes to Section 232 provisions for steel in the tariff schedule (see 1806010034). The tariff changes took effect June 1.

International Trade Today is providing readers with some of the top stories for May 29 - June 1 in case they were missed.

Mexico released a list of U.S. goods that will face new tariffs as a result of the U.S. Section 232 tariffs that now apply to steel and aluminum from Mexico. Most of the new Mexican tariffs took effect June 5, while others will be phased in through July 5, Mexico said in the notice. The European Union and Canada also recently released their lists of retaliatory tariffs (see 1806010022), though neither has taken effect yet. The tariffs on U.S. goods are a response to the Trump administration's decision to end the exemptions from tariffs on steel and aluminum goods from the EU, Canada and Mexico (see 1805310028).

Sen. Bob Corker, a Republican Trump critic from Tennessee who is retiring at the end of the year, told reporters in the Capitol June 5 that he will be introducing a bill that would not allow the president to implement tariffs or quotas based on national security concerns without congressional approval. That authority was given to the executive branch in 1962. According to a source familiar with the bill, if passed, it would require the president to submit to Congress actions under Section 232 of the Trade Expansion Act of 1962. "For a 60-day period following submission, legislation to approve the proposal will qualify for expedited consideration, guaranteeing the opportunity for both debate and a vote." This would give Congress an opportunity to veto tariffs on autos and auto parts -- an investigation under Section 232 recently began (see 1805240002). The bill would also apply to the administration's steel and aluminum tariffs and quotas, the source said.