Section 232 Tariffs

The Commerce Department will end 31 general approved exclusions from Section 232 tariffs on steel and aluminum, it said in an interim final rule. A review of public comments submitted after the GAEs were approved in December (see 2012100047) led Commerce to determine 26 steel GAEs and four aluminum GAEs no longer meet the criteria, it said. "As a conforming change to a recent U.S. International Trade Commission (ITC) decision, this rule also removes one additional steel GAE, Commerce said. The interim final rule takes effect 15 days after its publication date, which is currently scheduled for Dec. 9.

The following lawsuits were filed at the Court of International Trade during the week of Nov. 22-28:

U.S. Trade Representative Katherine Tai and Deputy USTR Sarah Bianchi stressed the importance of rapidly resolving trade concerns when they arise through the U.S.-Korea Free Trade Agreement, and talked about the president's vision for a new economic framework in the Indo-Pacific when they talked with Korea's trade minister, Yeo Han-koo. They agreed to communicate better to support trade facilitation, and to deal with supply chain challenges, emerging technologies and digital trade. According to the U.S. summary of the visit, Tai talked about the challenge posed by market-distorting excess capacity in steel and aluminum. According to the Korea Herald, quoting the Korean trade ministry, Korea asked for the chance to change the tariff rate quotas it earlier agreed to on steel. "We once again delivered our stance and concerns regarding the Section 232 rules, and demanded that the two sides begin negotiations at an early date," the ministry said in a statement. Tai and Yeo also heard from industry representatives on supply chain resiliency and how to foster more sustainable trade.

The Bureau of Industry and Security seeks comments by Jan. 21 on its collections of information related to requests for Section 232 steel and aluminum tariff exclusions and objections to them. The agency’s comment request will be followed by submission of the information collections for re-approval by the Office of Management and Budget, and will help BIS “assess the impact of our information collection requirements and minimize the public's reporting burden.”

U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo announced that consultations have begun with Japan on Section 232 tariffs on Japanese steel and aluminum. They said that the solutions will be aimed at strengthening "our democratic alliance," and the statement says that Japan and the U.S. share "similar national security interests." Japan, Canada, the European Union and other longtime allies of the U.S. were insulted that the Section 232 tariffs, which purportedly are to protect national security, applied to their countries.

If the demand for steel spikes after the infrastructure investments get underway, there will be room in the tariff rate quota for growth, according to the agreement reached by U.S. and European negotiators. If there is a 6% increase in demand for steel compared with 2021, the TRQ on 54 steel products will increase by 3%. And if there is a 12% increase, it will increase by 6%. But changes smaller than that amount will not result in a change to the 3.3 million metric-ton quota. That quota, which will be administered quarterly, takes effect Jan. 1 (see 2111010029).

The U.S. will administer tariff rate quotas starting Jan. 1 on European steel across 54 product categories, with an annual 3.3 metric ton limit, but the products that are currently covered by Section 232 exclusions won't count against the quotas. Those exclusions will automatically renew through the end of 2023, the Commerce Department announced. For both steel and aluminum, derivative products will no longer be subject to tariffs or quotas.

The Tariff Reform Coalition, which includes trade associations representing major metal consumers such as automakers, boat manufacturers, the beer industry and machinists, as well as exporters hurt by retaliatory tariffs, sent a letter to senators asking them to support the Section 232 tariff reform bill re-introduced this month by Sens. Pat Toomey, R-Pa., and Mark Warner, D-Va. The Oct. 19 letter, signed by 27 trade groups, said that the bill (see 2110050040) would ensure "that all national interests are taken into account prior to the imposition of tariffs or quotas. These interests were not properly weighed in the case of steel and aluminum and our industries are still reeling from the effects of these tariffs.... Invoking national security as a justification to protect a few industries, to the detriment of countless others, sets a bad example for the rest of the world and opens the door for other countries to take similar actions." They noted that if the bill becomes law, and then if Congress does not approve the steel and aluminum tariffs within 75 days, they would be repealed.

Senate Democrats would like to increase funding for CBP's Office of Trade by $10 million to better identify and prevent entry of goods made with forced labor, and an additional $10 million for trade enforcement, including the 21st Century Framework initiative, enforcement of safeguard and sections 232 and 301 tariffs, and going after online counterfeiting.

The U.S. Chamber of Commerce, framing the resolution of the Section 232 tariffs as being careful to guard against transshipment of Chinese steel and preventing import surges, is calling for an end to the tariffs on the European Union, Japan and Korea as quickly as possible. The organization put out a brief this week noting that the cost of steel in the U.S is spiking, and said, "a 'worker-centric' trade policy needs to take into account the U.S. workers employed in manufacturing industries that depend on steel as an input. These workers outnumber those in steel production by approximately 45-to-1, and these much larger industries are badly harmed by the higher costs and shortages imposed by tariffs."