President Donald Trump announced that the U.S. will "resolve the steel and aluminum issues" with the European Union after the EU agreed to buy more soybeans and liquefied natural gas, and to enter negotiations to drop non-auto industrial tariffs to zero. The EU's retaliatory tariffs will also be "resolved," said Trump.
The Section 232 steel and aluminum product exclusion process is flat-out broken, according to House Ways and Means Chairman Kevin Brady, R-Texas, and he said at least four aspects of the Commerce Department approach need to change. Brady, who was speaking to reporters at the Capitol on July 23, said the length of the exclusion -- now a year from the time it's granted -- should be longer. He said there should be a way to appeal a denial. If a product is excluded for one company, it should be excluded for all importers of the same product. And, he said, "we think you ought to grandfather major existing projects," such as pipelines under construction.
International Trade Today is providing readers with some of the top stories for July 16-20 in case they were missed.
More than 20 businesses and trade groups -- the first set of more than 80 scheduled to testify -- told the Section 301 investigation panel on July 24 that including their imports on the tariff list of $16 billion in Chinese products will lead to higher consumer prices, lower profits, abandoned expansion plans or worse. For Jane Hardy, CEO of Brinly-Hardy Company in Kentucky, having Harmonized Tariff Schedule heading 8432.4200, fertilizer spreaders, added to the list is an existential threat. With the tariff on steel, her family-owned company, founded in 1839, began paying 25 percent to 37 percent more for the metal, even though she'd always bought domestic steel. Then, with the first tranche of Section 301, Chinese wheels and hardware that her Indiana factory uses as it builds equipment were taxed at 25 percent.
Canada asked for a Chapter 20 review under NAFTA of safeguard tariffs on solar panel imports.The tariffs on solar panels apply after a country has exported 2.5 gigawatts worth of product (see 1801230052), it said in a news release. Canada noted the U.S. International Trade Commission recommendation that Canada be excluded from any safeguard measures after finding that imports from Canada are not a source of injury to U.S. industry. Despite that, Canada is still subject to the tariffs. "The tariffs violate NAFTA rules and were imposed despite the fact that the United States International Trade Commission found that imports of solar panels from Canada were not harming U.S. industry," Chrystia Freeland, Canada's foreign minister, said July 23.
The American Institute for International Steel and two companies asked the Court of International Trade on July 19 to immediately stop the enforcement of Section 232 tariffs, AIIS said in a news release. A summary judgment is necessary to prevent further monetary harm to steel importers, as well as "the port authorities, customs brokers, insurance companies, and logistics companies that are members of AIIS and that derive significant portions of their revenue from their handling of imported steel," AIIS said in its filing.
The implementation of new tariffs on uranium appears improbable despite the initiation of an investigation of possible trade restrictions under Section 232 (see 1807180029), said Kristoffer Inton, a stock research analyst with Morningstar. "We think it’s unlikely a tariff will be enacted, as we see little merit in the arguments laid out by Energy Fuels and Ur-Energy," he said in a research report on Canadian uranium company Cameco. "First, the key reason production from Kazakhstan has grown so much over the last decade is because it simply is home to low-cost uranium deposits," Inton said. "Roughly 12% of global reserves are found in Kazakhstan, second only to Australia." Also, "national security concerns seem unfounded given that the global uranium market is in oversupply and given that the two companies filing the petition claim that they can scale-up production quickly, if needed," he said. "Additionally, uranium could come from underfeeding, re-enrichment, or from Japan’s built-up inventory until mines expand production. This would seem to minimize concerns about a potential uranium shortage in the U.S."
Goods under the $800 de minimis level are not subject to Section 232 tariffs, a CBP spokesperson said July 18. CBP previously said that tariffs don't apply to de minimis shipments covered under the Section 301 tariffs (see 1807050033). The agency recently ruled against the use of foreign-trade zones to get around limits on de minimis entries (see 1807180022).
Lawmakers, farmers and agriculture trade groups voiced worries about the effect of tariffs on rural communities during a July 18 House Ways and Means Trade Subcommittee hearing. "Most of our agriculture producers today rely heavily on export markets, and unfortunately, many of these farmers and producers are now facing the loss of not just one of their top international export markets, but their top 2, 3 and 4 export markets -- all at once," Chairman Dave Reichert, R-Wash., said in an opening statement. "They are facing severe and devastating uncertainty -- and that goes right to their profitability." In response to recent sections 232 and 301 tariffs, "U.S. agriculture is now facing retaliatory tariffs from the EU, China, Mexico, Canada, Turkey, Russia and India," he said. "Now, I know that the administration did not intend for U.S. agriculture to be hurt, but the damage is entirely predictable."
CBP issued the following releases on commercial trade and related matters: