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Trump signs off on steep steel, aluminum tariffs

Added tariffs of 25 percent for steel and 10 percent for aluminum will hit a range of products at 12:01 a.m. March 23, as Trump cites lack of multilateral engagement as one reason for the tariffs.

   “Section 232” tariffs are set to hit steel and aluminum imports under a broad range of Harmonized Tariff Schedule (HTS) subheadings.
   President Donald Trump signed proclamations March 8 for global tariffs of 25 percent on steel and 10 percent on aluminum to take effect March 23.
   The steel tariffs are being assessed on steel subheadings 7206.10-7216.50, 7216.99-7301.10, 7302.40-7302.90, 7304.10-7306.90, and 7302.10, which, among myriad other things, include ingots, steel sheet piling, steel cross-ties, and steel pipes and tubes.
   Meanwhile, the aluminum tariffs are being imposed on aluminum headings 7601 (unwrought aluminum), 7604 (aluminum bars, rods and profiles), 7605 (aluminum wire), 7606-7607 (aluminum flat-rolled products), and 7608-7609 (aluminum tubes and pipes, and tube and pipe fitting); as well as subheadings 7616.99.51.60 and 7616.99.51.70 (aluminum castings and forgings), and any subsequent revisions to the HTS classifications.
   Steel and aluminum products for which there is a lack of “sufficient U.S. production capacity of comparable products” were excluded from the tariff announcement.
   Trump ordered the tariffs pursuant to separate Commerce Department-led investigations into the national security impacts of steel and aluminum imports.
   The reviews, the results of which were sent to Trump in January, were enabled by Section 232 of the Trade Expansion Act of 1962, a provision that allows the President to take remedial action if imports are found to endanger U.S. national security.
   Trump’s tariffs exceed global recommendations by Commerce Secretary Wilbur Ross by 1 percent for steel and 2.3 percent for aluminum. But Trump is exempting Canada and Mexico from the tariffs “at least at this time,” according to the signed proclamations.
   Trump said during a press conference March 8 that no Section 232 tariffs would be assessed on Canada and Mexico pending successful conclusion of the NAFTA renegotiation.
   “I expect that Canada and Mexico will take action to prevent transshipment of [steel/aluminum] articles through Canada and Mexico to the United States,” according to the proclamations.
   Trump cited a lack of multilateral action in tackling excess global and steel capacity as a reason for the tariffs.
   While the G20 started the Global Forum on Steel Excess Capacity in September 2016, tangible progress has been minimal.
   The group during a November meeting touted a report it developed with “six guiding principles” to reduce global overcapacity.
   After Trump’s original announcement of his intent to impose global tariffs, Organization for Economic Cooperation and Development (OECD) head Angel Gurria said the forum should deal with the matter in hopes of avoiding an escalation of international trade disputes, Hellenic Shipping News reported March 7.
   The G20 charged the Paris-based, multilateral OECD to take a leadership role in reducing global steel overcapacity.
   Trump’s proclamations also cite a “continued high level of imports since the beginning of the year” for both steel and aluminum.
   But he did invite allies to present ways to reduce unfair trade practices against the U.S. and could modify or remove tariffs for specific countries outside of Canada and Mexico, if those other countries make a compelling enough case, according to the proclamations.
   “Any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country,” the proclamations say. “Should the United States and any such country arrive at a satisfactory alternative means to address the threat to the national security such that I determine that imports from that country no longer threaten to impair the national security, I may remove or modify the restriction on steel articles imports from that country and, if necessary, make any corresponding adjustments to the tariff as it applies to other countries as our national security interests require.”
   The duties, and any corresponding changes to the HTS, will take effect at exactly 12:01 a.m. March 23, and will apply to any imports entered or withdrawn from warehouse for consumption after that time, according to the proclamations.
   In addition to potential additional country exclusions, the executive branch may provide relief to petitioners for any “Section 232” duties on certain steel and/or aluminum products not produced in the U.S. in a “sufficient and reasonably available amount or of a satisfactory quality,” and may also provide such relief based on national security considerations, both proclamations say.
   Trump has ordered Commerce Secretary Wilbur Ross to issue procedures for product exclusion requests before March 19.
   Product-based relief would be provided “only after” a “directly affected party” in the U.S. makes such a request.
   In such cases, the Commerce Department will publish a notice of the determination in the Federal Register, and notify U.S. Customs and Border Protection (CBP) to exclude those articles from duty collection.
   Any subsequent modifications to the HTS would be done in consultation with CBP and posted to the Federal Register, the proclamations state.
   After congressional Republicans for weeks warned Trump that any remedial action against steel and aluminum imports should be targeted to the countries and products trading most unfairly, Senate and House Republicans’ reactions to Trump’s official proclamations were mixed.
   Senate Finance Committee Chairman Orrin Hatch, R-Utah, called the tariffs a “tax hike” on U.S. manufacturers, workers and consumers.
   “Slapping aluminum and steel imports with tariffs of this magnitude is misguided,” Hatch said in a statement. “It undermines the benefits that the new tax law provides and runs counter to our goal of advancing pro-growth trade policies that will keep America competitive in the 21st century global economy.”
   Hatch said he will continue to work with the Trump administration to advise it to “revisit” the orders and “hopefully mitigate the damage” it will bring to the economy.
   House Republicans, on the other hand, offered a slightly more positive response, while also urging the White House to narrow the scope of the proclaimed remedies.
   “Clearly President Trump has listened to Congress and job-creators all over America by improving the original proposal to create a path to allow fairly traded steel and aluminum to be excluded country-by-country and business-by-business,” House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a statement. “Exempting Canada and Mexico is a good first step, and I urge the White House to go further to narrow these tariffs so they hit the intended target – and not U.S. workers, businesses and families.”
   Ways and Means Trade Subcommittee Chairman Dave Reichert, R-Wash., also commended Trump for heeding the House GOP’s call to steer clear of blanket tariffs.
   Democrat Ways and Means ranking member Richard Neal, Mass., acknowledged that “it appears” Trump is “finally taking action” to execute a “nearly year-old promise,” but criticized the White House, noting a shortsightedness and lack of coherence by the White House during the leadup to the tariff proclamations.
   “For the last week [Trump has] pursued a chaotic process and used punishing rhetoric that treats all U.S. trading partners as national security concerns and fails to recognize the complexities of our market,” Neal said. “Our workers and producers in steel and aluminum deserve effective relief, which will require strong and coordinated action with our allies.”
   Neal added that he hopes Trump will increase congressional, multilateral and stakeholder engagement to ensure sustainable trade relations to confront “problems that we all know have been caused by China’s rampant overcapacity in steel and aluminum.”
   Though Trump during a Feb. 13 bipartisan meeting with congressional lawmakers indicated Chinese metal transshipment as an area of concern targeted by the Section 232 investigations, Senate Finance Committee ranking member Ron Wyden, D-Ore., said of the proclamations on March 8 that Americans are waiting for a “real solution” for China’s steel and aluminum overcapacity.
   “These actions need to give American workers a fair shake and bring back jobs in industries important to our national security,” Wyden said. “It is too soon to tell whether this administration is up to the task of delivering that kind of action.”
   The Northwest Seaport Alliance (NWSA) – a marine cargo operating partnership of the ports of Tacoma and Seattle – was not so pleased with Trump signing off on the tariffs. The NWSA said the tariffs “could lead to broad negative economic consequences for Washington state,” and that “many trade experts also are raising concerns that the new U.S. tariffs on imports could lead to retaliatory tariffs on U.S. exports.”
   On March 7, the European Commission had outlined a plan to counter U.S. trade restrictions on steel and aluminum imports. Commissioner for Trade Cecilia Malmström said the tariffs would hurt the European Union, putting thousands of European jobs in jeopardy.
   Trump ceded the podium during a March 8 press conference to several steel and aluminum workers who thanked him for proclaiming the remedies.
   But principals of entities including the U.S. Chamber of Commerce, National Retail Federation, and even the U.S. Fashion Industry Association (USFIA), decried the tariff.
   “The U.S. Chamber is very concerned about the increasing prospects of a trade war, which would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms,” chamber CEO Tom Donohue said in a statement. “We won’t drive the economy to over 3 percent growth or continue to create jobs if we go down this path. We urge the administration to take this risk seriously and specifically to refrain from imposing new worldwide tariffs on steel and aluminum.”
   The USFIA said it was “reeling” after Trump’s tariff proclamations. “While our members don’t import a lot of steel or aluminum, these tariffs could result in disastrous consequences for them,” the association said in a statement. “Already, the European Union is calling out a variety of industries – including iconic American denim and t-shirts – as potential targets for tariff increases of their own.”
   The day after the tariffs were officially announced, the Wall Street Journal reported several downstream small manufacturers were concerned about potentially suffering harmful financial effects from the tariffs.
   The proclamations also charge the Commerce Secretary to “continue to monitor imports” of the subject articles and “from time to time,” review the status of such imports with respect to national security, in consultation with the State, Treasury, and Defense departments, as well as with the offices of the U.S. Trade Representative and Management and Budget, assistants to the president for national security affairs and economic policy, and “such other senior executive branch officials as the Secretary deems appropriate.”
   Commerce is to inform the White House of any circumstances that “in the Secretary’s opinion” could indicate the necessity for “further action” under Section 232, including an escalation or reduction in remedies, the proclamations state.
   Ross indicated in both “Section 232” steel and aluminum reports Commerce’s opinion that the recommended remedies can boost the U.S. steel and aluminum industries’ employment to 80 percent of total capacity.
   The Section 232 tariffs will apply in addition to any other “duties, fees, exactions, and charges” applicable to steel and aluminum, the proclamations state.
   Trump during the March 8 press conference said U.S. Trade Representative Robert Lighthizer will take the lead in negotiating with any countries that might request a reduction or elimination of the proclaimed tariffs.
   “Under the leadership of President Trump, America has a robust trade agenda that supports our national security,” Lighthizer said in a statement. “The President is once again demonstrating he will protect our country, fight for American workers and strictly enforce our trade laws. I will work closely with other Cabinet officials to advise the President on how to implement the program on steel and aluminum that he announced today.”

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