Updated Information as of Thursday, March 8, 2018: This afternoon, President Donald Trump announced global tariffs of 25% on steel and 10% on aluminum will take effect March 23. Though it appears steel and aluminum imports from Mexico and Canada will be exempted from the trade remedies while NAFTA negotiations continue forward, other countries may find tariffs applied if “national security” is determined to be at risk from trade practices. President Trump went a step further today and proposed “mirror taxes” against countries who charge higher tariffs on US goods, like China and India, though he has yet to propose any specific action. Congress is still pushing the executive branch to further narrow the countries, products and quotas to which these steel and aluminum tariffs will apply.
Last Thursday, the President announced to the world that he had decided to impose additional duties on shipments of steel and aluminum to the United States of 25% and 10%, respectively.
The President’s remarks were considered by many to be premature because the final rates had not yet been set. Secretary Ross and the Commerce Department presented an initial combination of options which included:
- Country specific rates
- Country specific quota levels
- A combination of country specific, quota and all-other rates
Given the timing that the findings of the report were presented to the White House, they technically had until nearly the middle of April to make the official announcements and warn America’s trading partners of the potential ramifications.
Fast forward to this week and America and steel and aluminum exporters are all wondering alike what the final outcome will be. We do know a few things.
- The EU is extremely upset and is looking to target American bourbon, motorcycles and blue jeans. These products come from Kentucky, Wisconsin and California, respectively, home states of the Senate Majority Leader, the Speaker of the House and the House Minority Leader, respectively.
- Canada, who is the largest producer of steel that America imports has said that any steel action will not be tied to NAFTA negotiations, but the President seems to feel otherwise.
- The Speaker of the House has said that Congress doesn’t feel that the proposed actions were in the best interest of the country, but it remains to see what action, if any, he and his caucus could come together to support.
Where does that leave companies today? The pushback from Congress, as well as from business-centric organizations like the US Chamber of Commerce means that the administration must firmly draw up plans for the tariffs which must be published in the Federal Register. Once published, the respective agencies like Commerce and Customs will know what tariff numbers will fall within the scope and what the duty rates will be and whether there will be variances for countries or quantities.
Here at Edward J. Zarach & Associates, we are monitoring the language and negotiations that are happening through a number of trade publications. When definitive guidance is announced, we will publish more information as well as links to the source material and suggestions for whatever remediating steps can be taken, if any, to blunt the impact of this decision.