President Trump surprised the domestic and importing trade communities with last week’s decision on the Section 232 recommendations on imports of steel and aluminum.
In April, 2017, Commerce Secretary Wilbur Ross initiated an investigation to determine the effect of imported aluminum and steel on national security under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. §1862). President Trump signed a Presidential Memorandum directing Secretary Ross to proceed “expeditiously” in conducting his investigation and submit a report on his findings to the President.
On February 16, 2018 Secretary Ross released the steel and aluminum reports as a result of the Section 232 investigations which determined that for purposes of the Trade Expansion Act, “national security” included “general security and welfare of certain industries, beyond those necessary to satisfy national defense requirements, which are critical to minimum operations of the economy and government.”
The Report determined that the present quantity of imported aluminum and steel adversely impacts the economic welfare of the domestic industries and threatens to impair the national security. Recommendations included tariffs, quotas, or a combination thereof covering primary aluminum, aluminum products, and steel.
On aluminum, the tariff recommendation was for at least 7.7% on all aluminum from all countries. The President raised the level to 10%. On steel, the report recommended at least a 24% tariff from all countries. Again, the President raised the level to 25%. These tariffs are on top of any duties, including anti-dumping and countervailing duties, already in place.
Less than two weeks after the issuance of the Commerce report, the President announced the increased duties will go into effect this week. We are awaiting a more detailed report including whether the President will exempt specific countries or products.
Importers must implement careful safeguards not to run afoul of the new tariffs. U.S. Customs and Border Protection will be enforcing the regulations and will be on the look-out for parties attempting to circumvent the new orders.