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).
Canada requested a Chapter 20 panel under NAFTA to dispute the imposition of steel and aluminum tariffs, Foreign Affairs Minister Chrystia Freeland announced June 1. That's in addition to filing a complaint at the World Trade Organization. Canada says the U.S. is violating international trade obligations with its "improper use of national security pretexts for protectionist purposes." "Canada will closely collaborate with the European Union, which also filed a WTO challenge...." she said. She also noted that U.S. law designates Canada as part of the military industrial base. Earlier, Canada issued its list of goods that will face retaliatory tariffs (see 1806010022), which included appliances, mattresses, maple syrup, condiments and candy, in addition to aluminum and steel goods.
The government of Canada recently issued the following trade-related notices as of June 1 (some may also be given separate headlines):
New tariffs on U.S. goods exported to the European Union and Canada touch on a wide range of products, with a heavy focus on steel and aluminum products. The EU and Canadian tariffs are meant as 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). Mexico also plans to initiate new tariffs on U.S. goods, though it has not yet publicly released a list of Harmonized Tariff Schedule subheadings, a spokeswoman for the Mexican Embassy in the U.S. said. China put new tariffs in place in April in response to the Section 232 tariffs.
The International Trade Commission issued Revision 5 to the Harmonized Tariff Schedule late on May 31. Most changes are intended to implement the end of temporary country exemptions for the European Union, Canada and Mexico and new agreements subjecting steel from Argentina and Brazil, and aluminum from Argentina, to quotas. Quotas on steel are also changed to implement a new lower threshold for three-month quota provisions. All changes take effect June 1.
Japanese and EU trade leaders noted their concerns with potential new U.S. tariffs on cars and car parts under a Section 232 investigation (see 1805240002) in a joint statement from Paris on May 31. "The measures under consideration in the investigation on autos and auto parts, if imposed, would have a major restrictive impact affecting a very substantial part of global trade," said European Union Commissioner for Trade Cecilia Malmstrom and Japanese Minister for Economy, Trade and Industry Hiroshige Seko. "This would cause serious turmoil in the global market and could lead to the demise of the multilateral trading system based on [World Trade Organization] rules. Both ministers also confirmed their intention to cooperate closely in discussing these concerns with the United States and call on other like-minded countries to join their efforts," the statement said. Those leaders also met with U.S. Trade Representative Robert Lighthizer that day and issued a separate joint statement (see 1805310020).
CBP issued the following release on commercial trade and related matters:
President Donald Trump approved the end of temporary exemptions to Section 232 tariffs on steel and aluminum from Mexico, Canada and the European Union, the White House said in a news release. "As of June 1, 2018, tariffs will no longer be suspended for steel or aluminum imports from those countries," the White House said. "The Administration will continue discussions with them and remains open to discussions with other countries." The U.S. "was unable to reach satisfactory arrangements, however, with Canada, Mexico, or the European Union, after repeatedly delaying tariffs to allow more time for discussions," the White House said in another release.
Exemptions from Section 232 tariffs on steel and aluminum for Canada, Mexico and the European Union will end on June 1, President Donald Trump announced in two presidential proclamations issued on May 31. No permanent agreement was reached for the countries, and the administration did not extend their temporary exemptions.
The U.S. Chamber of Commerce remains concerned for the ramifications of ending country exemptions to the Section 232 tariffs on steel and aluminum, the trade group said in a news release. "The U.S. must not expand tariffs or quotas on steel and aluminum imports to additional countries on June 1, as has been threatened," it said. Already, steel costs have increased, as has the volatility in aluminum prices, the Chamber said. "Extending the reach of these tariffs and quotas to additional countries is certain to provoke widespread retaliation from abroad and would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms. We urge the administration to take this risk seriously.” The country exemptions for Canada, Mexico and the European Union are set to end on June 1 (see 1805040046).