Section 232 Investigations

The Department of Commerce’s Bureau of Industry and Security (BIS) has amended the exclusion request process for the tariffs on certain steel and aluminum products implemented under Section 232 of the Trade Expansion Act of 1962. On March 8, 2018, President Trump exercised his authority under Section 232 and imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports (with certain countries receiving exemptions). U.S. Customs and Border Protection (CBP) began collecting the tariffs on March 23, 2018.

BIS has acknowledged that the number of filings has far surpassed expectations – as of August 20, BIS had received more than 38,000 exclusion requests and more than 17,000 objections – amid growing concerns over the importance of a transparent, fair and efficient product exclusion and objection process. The amendments seek to address these concerns and will create a process for rebutting objections filed to exclusion requests. They also attempt to clarify the criteria BIS considers during the review process to grant or deny an exclusion request. Continue Reading Department of Commerce Amends Section 232 Exclusion Process for Steel and Aluminum Products

Late Wednesday night, Secretary of Commerce Wilbur Ross announced targeted relief from the voluntary quotas the United States successfully negotiated with South Korea, Argentina and Brazil on steel, and with Argentina on aluminum. U.S. companies may now apply for product exclusions seeking steel or aluminum from these countries based on insufficient quantity or quality available from U.S. steel or aluminum producers. In such cases, the Department of Commerce has stated that an exclusion from the negotiated quota limits “may be granted and no tariff would be owed.” Previously, the product exclusion request processes were limited to steel and aluminum from countries that were fully subject to the Section 232 steel and aluminum tariffs of 25 percent and 10 percent, respectively, and did not allow for the submission of product exclusion requests for steel and aluminum products subject to the Section 232 tariffs from countries with negotiated quotas, which allowed imported products within the quotas to be exempt from those tariffs. Continue Reading President Trump Amends Section 232 Steel and Aluminum Product Exclusion Request Processes for Imports from Countries under Negotiated Quotas

On August 10, 2018, President Trump announced on Twitter that the United States would double Section 232 steel and aluminum tariffs on Turkey, referencing the drop of the Turkish lira as his reason for hiking the tariffs. Later that day, the White House issued a presidential proclamation directing that a 50 percent ad valorem tariff be imposed on steel articles imported from Turkey. U.S. Secretary of Commerce Wilbur Ross released a statement the same day saying that “since the imposition of the Section 232 tariff in March, exports to the United States have declined and domestic capacity utilization has increased, but not to levels sufficient to remove the threat to national security. Doubling the tariff on imports of steel from Turkey will further reduce these imports that the Department found threaten to impair national security as defined in Section 232.” The increased tariff rate went into effect on August 13, 2018.

In response, Turkish President Recep Tayyip Erdoğan increased tariffs on several U.S.-origin products with a presidential decree published in the Turkish government’s Official Gazette on August 15, 2018. Turkey increased tariffs on products such as rice, tobacco, vehicles, alcohol, coal and cosmetics. With Erdoğan’s decree, tariffs on passenger cars, alcoholic drinks and leaf tobacco have been doubled, resulting in tariffs of 120 percent, 140 percent and 60 percent respectively. Other U.S. products now facing tariffs include nuts, cosmetics, plastics and paper. Turkey’s Vice President Fuat Oktay stated that the tariffs were “within the framework of the principle of reciprocity in retaliation for the conscious economic attacks by the United States.” These Turkish tariffs went into effect on August 15, 2018.

The Department of Commerce has announced the initiation of a Section 232 investigation into whether the present quantity and circumstances of uranium ore and product imports into the United States threaten to impair national security. The decision was in response to a petition filed by two U.S. uranium mining companies and consultations with industry stakeholders, members of Congress, the Department of Defense, Department of Energy and other interested parties. Commerce Secretary Wilbur Ross has sent a letter to Secretary of Defense James Mattis informing him of the initiation of the investigation. Continue Reading Department of Commerce Initiates Section 232 Investigation into Uranium Imports

In March 2018, President Trump announced that under Section 232 of the Trade Expansion Act of 1962, the United States would increase tariffs on imports of certain steel products by 25 percent and imports on certain aluminum products by 10 percent on countries worldwide, including imports from the members of the European Union (EU) and Turkey. Although the EU was initially exempted from the imposition of tariffs, these tariffs came into place pursuant to two Presidential Proclamations issued on May 31, 2018. In response, the EU and Turkey announced their intent to impose retaliatory tariff measures. Continue Reading European Union and Turkey Announce Tariffs on Certain U.S. Products

On May 23, 2018, Secretary of Commerce Wilbur Ross announced the initiation of an investigation to determine the effects on the national security of imports of automobiles – including cars, SUVs, vans and light trucks – and automotive parts. See Thompson Hine International Trade Update, dated June 1, 2018. At that time, the Department of Commerce established certain deadlines for submitting comments and for requesting to appear at a public hearing. In a June 21, 2018 Federal Register notice, the department extended the public comment period to June 29, 2018 and the rebuttal period to July 13, 2018. Requests to appear at the hearing are now due June 29, 2018. The hearing dates of July 19 and 20, 2018 remain unchanged.

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. Continue Reading Trump Administration Implements Section 232 Tariffs on Steel and Aluminum Imports from Canada, Mexico and the European Union

Key Notes:

  • On May 23, 2018, the Department of Commerce self initiated a Section 232 national security investigation concerning the imports of automobiles and automotive parts.
  • A formal docket has been opened for the submission of public comments and requests to appear at a public hearing July 19-20, 2018.
  • The Department of Commerce has 270 days to issue its findings and submit a report to the president.

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Secretary of Commerce Wilbur Ross, at the direction of President Donald Trump, has initiated an investigation to determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232 of the Trade Expansion Act of 1962. “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” said Secretary Ross. “The Department of Commerce will conduct a thorough, fair, and transparent investigation into whether such imports are weakening our internal economy and may impair the national security.” President Trump stated that, “Core industries such as automobiles and automotive parts are critical to our strength as a Nation.”

According to Commerce, during the past 20 years, imports of passenger vehicles have grown from 32 percent of cars sold in the United States to 48 percent. From 1990 to 2017, employment in motor vehicle production in the United States declined by 22 percent. The investigation will consider whether the decline of domestic automobile and automotive parts production threatens to weaken the internal economy of the United States by potentially reducing research, development and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.

A formal notice of the investigation setting forth the scope and schedule will be published in the Federal Register in the near future.

With the deadline approaching for full implementation of the Section 232 tariffs on certain steel and aluminum imports, President Trump on April 30, 2018 relented to increasing pressure and extended the tariff exemptions for key U.S. allies until June 1, 2018. In making the announcement, the Trump administration announced that it had previously reached a final agreement with South Korea on steel imports and has also reached agreements in principle with Argentina, Australia and Brazil on both steel and aluminum imports. In addition, the president indicated that he was extending the country-based exemptions for Canada, Mexico and the European Union for a final 30 days. In all these negotiations, the administration has been focused “on quotas that will restrain imports, prevent transshipment, and protect the national security.” Until June 1, 2018, the United States will maintain current tariff levels for Canada, Mexico and the EU.

The president previously noted in Presidential Proclamation 9711 that the tariffs, initially implemented on March 23, 2018 for most U.S. trading partners, would be extended until May 1, 2018 in recognition of the important security relationship between the United States and these countries while the parties sought alternative means to address the threatened impairment to U.S. national security by imports of steel and aluminum articles from those countries. Unless exempted, the tariffs under these Section 232 trade actions are 25 percent on certain imported steel and 10 percent on certain imported aluminum. Separate from the White House June 1 extension announcement, Commerce Secretary Wilbur Ross stated that these countries will have to agree to reduce the volume of their exports to the United States, indicating that “If people don’t have the tariffs, and they don’t have the quota, that would defeat the whole purpose” of the Section 232 investigations and recommended actions.

It is already known that South Korea has agreed to cap its annual steel exports to the United States at approximately 70 percent of the country’s annual shipments from 2015 to 2017; the aluminum tariff remains in place for South Korea. While yesterday’s announcement indicated that agreements had been reached with Australia, Argentina and Brazil, no details were made available. Negotiations will continue with the remaining countries subject to the extensions (Canada, Mexico and the EU), significant U.S. steel and aluminum trade partners, for the next 30 days.

For additional details on these extensions, see Presidential Proclamation Adjusting Imports of Steel into the United States and Presidential Proclamation Adjusting Imports of Aluminum into the United States.