President Donald Trump signed yesterday two Presidential Proclamations adjusting imports of aluminum and steel into the United States. In doing so, he stated that measures are now in place to address the impairment to the national security threatened by imports of steel and aluminum from Argentina, Brazil and Australia. South Korea previously reached an agreement with the United States on April 30 to limit its imports of steel. President Trump added, however, that “similar measures are not in place with respect to steel or aluminum imports from Mexico, Canada or the European Union” and that insufficient progress had been made in ongoing negotiations with these countries. He declared that, as of June 1, 2018, the Section 232 tariffs for steel of 25 percent and for aluminum of 10 percent will no longer be suspended for such imports from these countries. The White House indicated that it will continue discussions with them and remains open to discussions with other countries that may lead to permanent country-based exemptions.

In response, Mexico, the European Union (EU) and Canada immediately denounced these tariff actions and announced retaliatory actions. The EU announced that it would begin the process of implementing its own tariffs on a list of U.S. products, and proceed with a complaint against the United States before the World Trade Organization (WTO). In denouncing the tariffs and the concessions the United States was seeking in negotiations, EU Commissioner for Trade Cecilia Malmström said, “Today is a bad day for world trade.” The Mexican government declared that it would levy import taxes on U.S. shipments of pork bellies, blueberries, apples, grapes, certain cheeses and various types of steel (including flat steel – hot-rolled sheet, cold-rolled sheet and coated – and several types of tubes). “Mexico deeply regrets and condemns the decision of the United States to impose these tariffs on imports of steel and aluminum from Mexico … under the criterion of national security,” the Mexican government said in a statement. Canada has announced that it will impose its own tariffs against U.S. steel, aluminum and other products in the amount of $16.6 billion at rates of 25 percent and 10 percent, which represents the total value of Canada’s 2017 steel and aluminum exports to the United States. These Canadian tariffs will go into effect on July 1 and remain until the United States ends its own tariffs.

Aluminum Tariffs

President Trump stated that the United States has agreed on measures with Argentina and Australia pertaining to aluminum imports, including measures to reduce excess aluminum production and excess aluminum capacity, measures that will contribute to increased capacity utilization in the United States, and measures to prevent the transshipment of aluminum articles and avoid import surges. The president determined that with negotiated quotas on aluminum articles imported from these two countries, there was no longer a threat to U.S. national security, and decided to exclude these countries from the tariff. With this determination, as of June 1 at 12:01 a.m., all temporary country exclusions previously in place will be removed and the Section 232 tariff of 10 percent will apply to imports from all countries other than Argentina and Australia. “Aluminum articles” in the Section 232 investigation scope are defined as: (a) unwrought aluminum (Harmonized Tariff Schedule (HTS) classification number 7601); (b) aluminum bars, rods, and profiles (HTS 7604); (c) aluminum wire (HTS 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70), including any subsequent revisions to these HTS classifications.

Steel Tariffs

President Trump stated that the United States had agreed on measures with Argentina, Australia, Brazil and South Korea pertaining to steel imports, including measures to reduce excess steel production and excess steel capacity, measures that will contribute to increased capacity utilization in the United States, and measures to prevent the transshipment of steel articles and avoid import surges. The president determined that with negotiated quotas on steel articles imported from these four countries, there was no longer a threat to U.S. national security, and decided to exclude these countries from the tariff. With this determination, as of June 1 at 12:01 a.m., all temporary country exclusions previously in place will be removed and the Section 232 tariff of 25 percent will apply to imports from all countries other than Argentina, Australia, Brazil and South Korea. “Steel articles” in the Section 232 investigation scope are defined as: HTS classification numbers 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS classifications.

For additional background and various Section 232 documents and reports, see Thompson Hine’s International Trade Update dated March 13, 2018.