A World Trade Organization dispute panel rejected China's claim that its retaliatory tariffs in response to Section 232 tariffs were justified because the U.S. steel and aluminum tariffs were a safeguard in disguise.
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
Sen. Sherrod Brown, D-Ohio, told Commerce Secretary Gina Raimondo that she should not intervene in professional staff's determination of whether antidumping and countervailing duties -- they range from 43% to 294% -- should be imposed on imported tin mill steel products, used in making cans for packaging food.
A bipartisan duo introduced a bill in the House that would not allow future Section 232 tariffs or quotas without congressional approval, and would give Congress the ability to end the current steel and aluminum tariffs and quotas.
The Commerce Department’s Bureau of Industry and Security completed a round of interagency review for a final rule that could revise the Section 232 steel and aluminum tariff exclusions process. BIS sent the rule to the Office of Information and Regulatory Affairs June 27 (see 2306280016), and the rule was sent back Aug. 10 with some changes.
Approximately $32 million in Section 232 duties on steel or aluminum should have been paid between March 2018 and Nov. 10, 2021, but weren't because of data errors in the transmissions between the Bureau of Industry and Security and CBP, or because CBP had not caught up to the fact that the exclusion had been filled. According to an analysis by the Government Accountability Office, more than 90% of the unpaid duties were due to CBP not realizing that exclusion volumes for a particular product and firm had been surpassed at the time of the entry, and the agency did not realize that fact until after the 90-day reliquidation period.
A readout from the Office of the U.S. Trade Representative after the latest round of talks between the trade representative and her EU counterpart on a steel and aluminum deal suggested she does not think the EU is thinking big enough. The U.S. and the EU are trying to agree on a system that would preference steel and aluminum made with a lower carbon footprint, and, at the same time, a system that would keep metals produced through non-market excess capacity out of their countries.
The Biden administration will complete its review of the Section 301 tariffs "this fall," U.S. Trade Representative Katherine Tai wrote to senators, and while she did not commit to any course of action, she wrote: "As part of the 4-Year Review of the Section 301 tariffs, USTR is reviewing the effectiveness of the tariffs in achieving the objectives of the investigation, as well as the effect of the tariffs on consumers, workers, and the U.S. economy at large. As part of this review, we are considering the existing tariffs structure and how to make the tariffs more strategic in light of impacts on sectors of the U.S. economy as well [as] the goal of increasing domestic manufacturing."
The U.S. and India formally submitted their bids to end five disputes at the World Trade Organization, including a dispute surrounding India's retaliatory tariffs on some U.S. goods due to the Section 232 steel and aluminum duties. India and the U.S. told the WTO that mutually agreed to solutions were reached in India's disputes against U.S. countervailing duties on hot-rolled carbon steel flat products from India, measures on the renewable energy sector and Section 232 duties on steel and aluminum products. Solutions were also reached in the U.S. objection to India's measures on solar cells and modules and export-related restrictions. The deal to drop the cases was struck during a visit from Indian Prime Minister Narendra Modi to the White House in June (see 2306230038).
Canada and Mexico talked about the panel ruling on auto rules of origin -- a decision that went their way but that the U.S. has chosen not to implement -- and Canada brought up the issue with U.S. Trade Representative Katherine Tai as well, according to readouts from Mexico and Canada about the bilateral meetings July 6 ahead of the official Free Trade Commission meeting in Cancun, Mexico.
The Commerce Department’s Bureau of Industry and Security sent a final rule for interagency review that could revise the Section 232 steel and aluminum tariff exclusions process. BIS sent the rule to the Office of Information and Regulatory Affairs June 27.