The European Commission will open a safeguard investigation on 26 steel products, officials announced March 26, as some steel imports have been increasing over the last two years. "This trend may be even stronger now that the access to the US market has been limited and steel products from other parts of the world previously destined to the US may be redirected to Europe, disturbing the market and skewing prices." If the investigation's results support it, the EU could impose tariffs or quotas to protect its steel producers. The EU aims to complete the investigation within nine months, but left open the possibility of instituting provisional measures while the investigation is underway. The EU had earlier said it might raise tariffs on U.S. goods if the U.S. steel and aluminum tariffs harmed EU producers (see 1803160026). The U.S. tariffs do not apply to the EU, but that exemption is temporary, and dependent on U.S. views on EU cooperation on trade.
The International Trade Commission on March 23 issued Revision 2 to the 2018 Harmonized Tariff Schedule. The main reason for the update was to implement new Section 232 tariffs on aluminum and steel products (see 1803230060). The ITC also made technical corrections and changes related to recently imposed Section 201 safeguard duties on solar cells and residential washers. The changes, most of which took effect March 23, are as follows:
The International Trade Commission on March 23 issued Revision 2 to the 2018 Harmonized Tariff Schedule. Changes, many of which take immediate effect, include provisions required to implement Section 232 tariffs on aluminum and steel products that took effect March 23 (see 1803230014). The ITC said it is aware of some technical issues with the documents and is "working to resolve it as quickly as possible." International Trade Today will have more details on the changes in a subsequent issue.
President Donald Trump, speaking to the press about signing the omnibus spending package for fiscal year 2018, opened by talking about negotiations with allies about exemptions from Section 232 tariffs on aluminum and steel. "Some tremendous trade deals are being made with various countries. We're negotiating very long very hard, but very quickly," he said. "The deal with South Korea, according to [Commerce] Secretary [Wilbur] Ross and [U.S. Trade Representative] Bob Lighthizer is very close to being finished, and we're going to have a wonderful deal with a wonderful ally." He said the U.S.-Korean Free Trade Agreement, or KORUS, as originally implemented "was a deal that was causing a lot of problems for our country with employment."
American tariffs on aluminum and steel are safeguard measures masquerading as a national security action, and therefore, the Chinese Ministry of Commerce is within its rights to prepare safeguard tariffs in response, the ministry said in a March 23 notice. The country also released a list of products that will be subject to the new tariffs. That list, which is in Chinese, is reportedly divided into two phases. The first phases would include 15% tariffs on products like nuts, wine and seamless steel pipes, while the second phase would add a 25% tariff on pork and aluminum, according to The Wall Street Journal. The notice didn't say when the tariffs would take effect.
The Commerce Department will give blanket exclusions to the Section 232 tariffs on steel and aluminum in some cases, Commerce Secretary Wilbur Ross said at a March 22 House Ways and Means hearing. "We do have the discretion to make broader exclusions available to all importers of those particular products if we find the circumstances warranted." Commerce may also allow for retroactivity for tariff exclusions and has asked CBP to use an "an escrow account," similar to the process for antidumping and countervailing duties, Ross said.
Imposition of upcoming Section 232 tariffs on steel and aluminum products will be paused for a set of countries currently in negotiations with the U.S. over potential exemptions, U.S. Trade Representative Robert Lighthizer said March 22 in testimony to the Senate Finance Committee. The European Union, Australia, Argentina, Brazil and South Korea will join Mexico and Canada as initially and temporarily exempt from the tariffs, which are set to take effect at 12:01 a.m. March 23 (see 1803080025).
CBP will be "closely monitoring importers’ compliance with the Section 232 measures," which take effect on March 23, a CBP spokesman said. "CBP will enforce the remedies imposed by the President under Section 232 on imports of steel and aluminum from covered countries into the United States," he said. "Companies will be responsible for paying the tariff while their exclusion is under consideration. Imports subject to these measures will be processed through CBP’s Automated Commercial Environment (ACE) entry processing system, which CBP uses to determine admissibility and duty requirements for imported goods."
The Office of the U.S. Trade Representative will soon release a list of the 1,300 tariff lines from China recommended because of China's forced technology transfer, forced joint ventures, intellectual property theft and technology licensing restrictions (see 1803220030). Within that list, the agency will propose 25 percent tariffs on aerospace, information and communication technology, and certain machinery, the White House said in a fact sheet. The total value of goods subject to levies will be $50 billion, the amount the administration says is the annual cost to American businesses because of China's unfair restrictions.
FedEx CEO Fred Smith worries about the impact of President Donald Trump’s recent imposition of “protectionist tariffs” on imported steel and aluminum because “history has shown repeatedly that protectionism is counterproductive to economic growth,” he said on a March 20 earnings call. “The better approach is to encourage open markets and free exchange of products and services and to reduce barriers to trade,” he said. Smith thinks “the correct way to go here is to deal with China on the issues with China,” he said. The “overall” aim should be to “lower trade barriers” and tariffs around the world, “not to engage in less trade,” he said. FedEx will “continue to advocate against any move towards protectionist trade policies that could slow economic growth and undermine all the positive impacts” from the tax overhaul, company Chief Information Officer Rob Carter said. In the roughly two weeks since Trump announced he would impose the steel and aluminum tariffs on all but Canada and Mexico, “we’ve not seen any quantifiable shipper behavior change” as a result, Carter said.