In an industry “listening session” with US steel and aluminium producers, President Trump stated that as soon as “next week” the United States would be imposing additional tariffs on steel and aluminium imports, possibly of all origins. Whilst these remarks are not an official imposition of such tariffs, President Trump’s remarks are largely consistent with recommendations made by the U.S.Department of Commerce in its final reports on the national security impact of steel and aluminium imports conducted under Section 232 of the Trade Expansion Act of 1962. Specifically, the reports from the Department of Commerce, issued February 16, 2018, conclude that steel and aluminium imports “threaten to impair the national security,” and as a result, the report goes on to recommend the following measures:
Proposed Steel Remedies
1. A global tariff of at least 24% on all steel imports from all countries, or
2. A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
3. A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.
The proposed remedies cover steel mill products classified in subheadings 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90.
Proposed Aluminium Remedies
1. A tariff of at least 7.7% on all aluminium exports from all countries, or 2. A tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or 3. A quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States. These proposed remedies cover unwrought aluminium (heading 7601), aluminium castings and forgings (subheadings 7616.99.51.60 and 7616.99.51.70), aluminium plat, sheet, strip and foil (flat rolled products) (headings 7606 and 7607); aluminium wire (heading 7605); aluminium bars, rods and profiles (heading 7604); aluminium tubes and pipes (heading 7608); and aluminium tube and pipe fittings (heading 7609). U.S. companies that can demonstrate insufficient domestic production or sufficient national security justifications may request exclusions from these remedies for certain specific products otherwise covered.
What National Security Interests?
Interestingly, the top two exporters of the covered steel and aluminium products are Canada and the European Union, both of which are staunch allies on all matters most particularly national security. In response to President Trump’s statements, the President of the European Commission, Jean-Claude Juncker stated EU’s intention to “bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation.” For it’s part, Canada has states that “should restrictions be imposed on Canadian steel and aluminium products, Canada will take responsive measures to defend its trade interests and workers.” China, which often bears the brunt of US trade ire, only represents about 1% of US imports of the covered products. Nevertheless, China’s Foreign Ministry spokesman Hua Chunying states that “China urges the US to abide by multilateral rules and make contributions to the trade and economic world order.”
Contact Information
I will continue to monitor this development and alert our clients once a formal announcement on any additional tariffs has been made. In the meantime, should you have any questions concerning this or other international trade developments, please do not hesitate to contact me at below:
William Marshall
william.marshall@tiangandco.com
+852 28334977 / 64696776