Mara Lee

Steel and aluminum tariffs and the announcement of tariffs on Chinese goods are pushing the world toward a global trade war, World Trade Organization Director-General Roberto Azevedo said March 28 on BBC. But there's still time to avoid a trade war, he said, because, for the most part, countries have merely announced tariffs, not imposed them, and are negotiating. "The fact is, that when you announce certain types of measures, and others deem that those measures are not in compliance with their obligations, and threaten to retaliate, that is a problem. It is a big problem. I don’t think anybody believes this is something minor, even in the U.S. administration," he said. "People are beginning to understand, I hope, how serious this is, and the kind of impact it could have on the global economy," he said, and that's why, he thinks, the U.S. is negotiating with countries around the world to find ways to avoid imposing steel and aluminum tariffs.

An additional two presidential proclamations related to Section 232 tariffs on aluminum and steel were published March 28 in the Federal Register. One new detail was released on how companies can make arguments that the steel or aluminum they import should be excluded from tariffs. The proclamation said the commerce secretary can take "into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate."

Panelists at the Center for Strategic and International Studies agreed that the process to determine whether imports violate domestic companies' intellectual property works well, but said once an exclusion order is issued by the International Trade Commission, enforcement can be tricky.

South Korea agreed to change "how it conducts verification of origin for U.S. products," and establish a working group to resolve future origin verification issues, as part of a deal to renegotiate U.S.-South Korea Free Trade Agreement announced March 25. The changes come on top of an agreement by South Korea to open its auto market by lifting caps on imports that don't match South Korean safety standards (see 1803260005), according to additional details of the agreement in principle released by the U.S. Trade Representative the evening of March 27. The preliminary deal also makes other changes on auto industry trade, including that:

Mexico's finance secretary and CBP have signed a memorandum of understanding to fight fraud and contraband moving across the Mexico-U.S. border, as well as one that will create a joint cargo inspection. The actions, along with an agreement on agriculture, were announced March 26 at a joint press conference with the Department of Homeland Security Secretary Kirstjen Nielsen and Mexico's Foreign Minister Luis Videgaray. Nielsen, speaking in Spanish, said the two countries are neighbors, allies and friends.

Canada's government announced changes to its customs and antidumping duty regulations to bolster customs enforcement on dumped steel and aluminum, calling the diversion of cheap steel and aluminum "a threat to Canadian jobs and the North American market." The government said the changes will be subject to a 15-day consultation in the Canadian version of the Federal Register.

Canada said consultations with the United States over softwood lumber antidumping and countervailing duties have been unsuccessful since they began on Jan. 17, and asked for the formation of two panels, one for CVD and one for AD duties. The request was made at a World Trade Organization meeting on March 27. The U.S. blocked formation of the panels, but according to WTO rules, it can only do so temporarily. If Canada asks for a panel at the next Dispute Settlement Body meeting, a panel will be formed to judge the dispute.

The Chinese government complained that U.S. actions regarding China's intellectual property record are destroying the World Trade Organization -- calling unilateral action "fundamentally incompatible with the WTO, like fire and water." According to a Geneva trade official's summary of the March 26 debate, Japan and the European Union agreed that any trade measures against China should be consistent with WTO agreements, even as they said "they share US' concerns of the need for stronger protection of intellectual property rights and concerns over technology licensing and transfers in China."

South Korea has agreed to restrict its steel exports to the U.S., reducing them by 30 percent from the last three years' average, and in exchange, the U.S. will give it a permanent exemption from the 25 percent tariff on steel that was instituted to protect the U.S. military industrial base. The steel agreement was part of a larger deal that includes changes to KORUS, the six-year-old U.S.-Korea Free Trade Agreement. South Korea's Trade Minister Kim Hyun-chong announced the agreement in principle on March 26. U.S. Treasury Secretary Stephen Mnuchin said on "Fox News Sunday" that the two countries reached an understanding, adding, "We expect to sign that agreement soon."

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.