The Commerce Department confirmed that the Aug. 29 proclamations on exclusions from Section 232 tariffs are retroactive to the date the exclusion request was accepted (see 1808300004), rather than the date of posting for public comments. "For properly submitted exclusion requests, it is the filing date," a Commerce Department spokesman said.
Sen. Elizabeth Warren, D-Mass., called on the Commerce Department Inspector General to investigate the process for receiving company-specific requests for exclusions from Section 232 tariffs on steel and aluminum. “Commerce officials claimed that the exemption process would be 'fair and transparent,'" her office said in an Aug. 29 press release. “But an investigation by Senator Warren and additional public reporting have revealed the process is replete with mistakes and appears arbitrary, opaque and subject to political favoritism,” she said, citing an exclusion granted to a sanctioned Russian aluminum company. Among other things, Warren asked in her letter that the IG examine the "processes and procedures in place for Commerce officials to make" decisions on tariff exemptions.
The White House on Aug. 29 issued proclamations expanding company-specific exclusions from Section 232 tariffs and quotas on steel and aluminum. The proclamations make exclusions from Section 232 tariffs retroactive to the date the exclusion request was "accepted," rather than the date of posting, by the Commerce Department. They also authorize Commerce to grant exclusions for products from countries constrained by Section 232 quotas on steel and aluminum (currently Argentina for steel and aluminum, and South Korea and Brazil just for steel).
Remaining risks that could derail the momentum toward replacing NAFTA include legislative uncertainty and Canadian inflexibility, said Carlos Capistran, Canada and Mexico economist at Merrill Lynch, in an Aug. 28 research report. There's a possibility that an insistence on a trilateral deal in the U.S. Congress or that a Democratic takeover in the House could prevent approval, Capistran said. "There is also a risk that the Mexican Congress does not approve the deal, for instance on the grounds that the energy sector is too open, but we see this as a low risk given the participation" of the incoming Mexican president's team in the negotiations.
Several trade lawyers see Chapter 19, dairy and steel and aluminum tariffs as the thorniest issues to resolve as Canada is invited to negotiate NAFTA this week. Dan Ujczo, chairman of the U.S.-Canada practice at Dickinson Wright, said that Mexico is considering agreeing to voluntary quotas in steel and aluminum, but that an agreement is "highly unlikely" this week, before the bilateral deal is forwarded to Congress on Aug. 31. "Canada may be able to raise the issue in its discussions; however, progress will be unlikely, given the long list of issues," he wrote in a note to clients. He predicted that the end of aluminum and steel tariffs on NAFTA partners -- and the dropping of their retaliatory tariffs -- will happen during the 90-day review in Congress.
The House could pass the Miscellaneous Tariff Bill in the first week or so following a return from recess after Labor Day "if they think that they can get it passed and get it through the president to sign," said Jon Kent, a lobbyist for the National Customs Brokers & Forwarders Association of America with Kent & O'Connor. One potential issue could be inconsistency concerns within the administration over tariff cuts on many goods that come from China as other tariffs are being added under Section 301 and other trade remedies, Kent said.
The National Association of Foreign-Trade Zones recently wrote to Foreign-Trade Zones Board Executive Secretary Andrew McGilvray as part of the group's effort to address the "unintended and injurious impact" of section 201 and 301 tariffs on manufacturers in U.S. FTZs. NAFTZ is trying to get the Office of the U.S. Trade Representative to resolve issues involving the USTR's trade remedy language that results in unfair treatment of goods manufactured within FTZs (see 1808220034). "We respectfully request that the Foreign-Trade Zones Board communicate immediately with USTR to help resolve this increasingly-damaging situation for American FTZ manufacturers," he said.
CBP's 'Hands Tied,' So NAFTZ Engaging USTR on Section 301 Tariffs for Some US FTZ-Manufactured Goods
National Association of Foreign-Trade Zones President Erik Autor is set to meet with officials at the Office of the U.S. Trade Representative in the coming weeks to discuss a quirk in foreign-trade zone filing requirements that’s resulting in the unfair application of Section 301 duties, he said in an Aug. 21 interview. Autor seeks to educate USTR on how tariffs apply to FTZ goods, in the hopes that the agency will amend Section 301 implementation language related to zones that CBP says leaves it with no choice but to sometimes collect the tariffs on inputs that sometimes aren’t even Chinese.
The International Trade Commission recently issued Revision 9 to the Harmonized Tariff Schedule. Changes from the previous version implement the increase in Section 232 tariffs on iron and steel products from Turkey up from 25 to 50 percent, effective Aug. 13. Among other things, new subheading 9903.80.02 is added specifically for Turkish iron and steel products, with iron and steel products from other countries subject to the original 25 percent tariff still classifiable in subheading 9903.80.01. U.S. Note 16 to Subchapter III of Chapter 99 is also modified to implement the increase. The updated tariff schedule also includes technical corrections to provisions in U.S. Note 18 to Subchapter III of Chapter 99 implementing Section 201 safeguard duties on solar cells. The corrections take effect beginning July 30.
A report on the national security issues related to imported automobiles and auto parts probably won't be ready for release in August, Commerce Secretary Wilbur Ross said in an interview with The Wall Street Journal. The Commerce Department started a Section 232 investigation in May on the impact of imported cars on the domestic auto industry and national security (see 1805240002). Ross, who previously said he expected a report in August, noted the progress with NAFTA and the European Commission. Commerce has 270 days to issue the report and Ross didn't give any other information on when to expect the report.