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New U.S. trade tariffs – making enemies or good business?

     Steel rolls

With the recent headlines of U.S. trade tariffs, there is no doubt the U.S. is making global economic enemies, but should anyone be surprised as trade reform was one of Donald Trump’s “Make America Great Again” campaign platforms.

Here is what you need to know at a glance:

Steel and Aluminum

On March 8, 2018, Presidential Proclamations were signed by Donald Trump to impose additional duties to U.S. imports of certain steel (25%) and aluminum (10%) articles.  Those additional duties became effective March 23, 2018.

While Canada and Mexico originally received an indefinite exemption from the tariffs, a new presidential order added numerous countries (member countries of the European Union, Argentina, Brazil, South Korea and Australia) to the exemption list, along with a May 1 expiry date for all exemptions – it is unknown whether the May 1 expiry is to apply pressure coinciding with existing NAFTA talks or whether import quotas will be assigned to currently exempt countries to avoid those countries acting as conduits for re-export of Chinese origin steel.

The steel duties will be applied at the six digit level to the following tariff numbers: 7206.10 through 7216.50, 7216.99 through 7301.10 (includes ingots, bars, rods, sheets and wire), 7302.10, 7302.40 through 7302.90 and 7304.10 through 7306.90 (includes rails, pipes, and tubes).  

The aluminum duties will be applied to the following tariff numbers: (a) unwrought aluminum (HTS 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 fittings (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7616.99.5160 and 7616.99.5170).

Potential China tariffs

On March 22nd President Trump signed a Presidential Proclamation to impose 25% tariffs on China’s exports of aerospace, information and communication technology and machinery exports, encompassing approximately 1,300 tariff lines impacting up to $60 billion annually.

The proclamation was based on an investigation initiated in August 2017 by the United States Trade Representative (USTR) which resulted in a 215 page report entitled “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.”

From the report, the President cited the loss of 6 million jobs and the closing of 60,000 factories due to a $500 billion trade deficit with China and $800 billion overall deficit.  The policy going forward is to have a “reciprocal” or “mirror” tax on countries that impose excessive tariffs on U.S. goods and other unfair trade practices such as forced technology transfers and plausible deniability regarding cyber theft.

The President has instructed the USTR to publish a proposed list of products and any tariff increases within 15 days of the March 22nd announcement.  After a period of notice and comment, the Trade Representative will publish a final list of products and tariff increases.

  • The list will be set out in a Federal Register notice seeking public comments on the proposed tariff action.  Comments will be due 30 days from publication.  The notice will also announce a date for a public hearing.
  • USTR, with the assistance of the interagency Section 301 Committee, will review and analyze the comments.
  • When the process is completed, USTR will announce the final determination.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Quick Tip #32
Understanding Incoterms 2010

Whether you are buying or selling, negotiating favourable commercial terms of sale is the most effective way to cut costs and optimize transit times.

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