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:
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.
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.
An array of steel executives and the United Steelworkers' president joined House members whose districts include steel mills in celebrating the Section 232 tariffs that are slated to take effect on March 23. "National security is only as strong as American steel, and the American steel industry is strongest when we have the ability to manufacture steel from start to finish inside our own borders," said Todd Young, US Steel's chief lobbyist. Only one aluminum representative was at the Congressional Steel Caucus hearing March 21. Bauxite, the raw material for aluminum, has no domestic source.
The U.S. Trade Representative Robert Lighthizer is talking with South Korea, Australia, Argentina and the European Union about exemptions from Section 232 tariffs on aluminum and steel, and is going to begin talking to Brazil soon. He expects all those negotiations to come to a conclusion by the end of April, he told the House Ways and Means Committee. Lighthizer, who testified for more than three hours March 21, said it's ultimately up to the president but he believes it makes sense for tariffs not to apply to countries while they are in negotiations. He acknowledged that Brazil imports U.S. coal to make steel slabs, and then U.S. mills use those slabs and finish the steel. He said the agency will take that into consideration, but added, "That isn't to say, they will be successful in getting an exclusion." He also said Korea is a particular problem in the steel sector.