On March 23, President Donald Trump imposed 25 percent tariffs on steel and 10 percent tariffs on aluminum imports. At the time, temporary country-based exemptions were issued for Argentina, Australia, Brazil, Canada, the European Union and Mexico until May 1. However, Argentina, Australia and Brazil were able to reach agreements with the U.S. for either full or quota-based exemptions from the metals tariffs.
On May 31, the White House announced the temporary tariff exemptions granted to Canada, Mexico and the European Union would cease on June 1, and all three allies are now subject to the respective steel and aluminum duties. The tariffs have been criticized by international leaders, and Canada, Mexico and the EU have initiated strong retaliatory measures to confront what they view as an illegal and illegitimate U.S. trade measure under existing World Trade Organization (WTO) obligations.
The tariffs have been said by the U.S. administration to be the result of national security concerns, which has frustrated some U.S. allies. French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau have been vocal about their contempt for the national security reasoning behind the tariffs, and Trudeau described the move as “an affront to the long-standing security partnership between Canada and the United States.”
On June 20, the U.S. Department of Commerce issued its first public product exclusions that will be exempt from the tariffs. Of over 20,000 requests submitted to the Commerce Department, 98 requests had been processed and 42 resulted in approved product exclusion.
Retaliatory Tariffs Announced
The European Commission began imposing retaliatory “rebalancing duties” on certain U.S. exports on June 22. The commission noted the total value of EU exports affected by the U.S. tariffs is €6.4 billion based on 2017 figures. The new EU tariffs are mostly 25 percent and target key U.S. exports such as blue jeans, motorcycles, tobacco and whiskey. The commission published an additional list of aluminum and steel products subject to 10 to 50 percent tariffs beginning in three years, or after a positive finding in a WTO dispute settlement that the U.S. 232 actions are inconsistent with WTO obligations.
The Canadian government imposed tariffs on $12.8 billion worth of U.S. goods beginning on July 1 in response to U.S. tariffs, matching the value of Canadian steel and aluminum exports to the U.S. last year. Canada’s Department of Finance issued two lists of U.S. products subject to a 25 percent or 10 percent tariff, including steel and aluminum products, traditional household goods and a wide range of food products, including roasted coffee, maple syrup, pizza, numerous condiments and whiskey. Canada also challenged the U.S. tariffs under the WTO dispute settlement process and under The North American Free Trade Agreement’s (NAFTA) dispute settlement procedures.
On July 5, Mexico’s Economy Ministry imposed retaliatory tariffs against almost $3 billion worth of U.S. products, including duties on various products ranging from flat steel products and lamps to pork legs and shoulders, cured meats and prepared foods, apples, grapes, cranberries and cheeses. Along with the EU, Canada, China, India and Norway, Mexico also initiated WTO dispute settlement proceedings against the U.S.
Key Takeaways
• It is critical to review the tariff lists issued by Canada, Mexico and the EU to see if your imports and exports will be affected.
• If you import steel or aluminum, see if you can file for product exclusions. There is no cost to file, but legal help is prudent if you hope to obtain the exclusions. Based on current processing times, the Commerce Department appears to be overwhelmed with the number of exclusion applications – submit requests as soon as possible.
• It is vital to engage with members of Congress. Some lawmakers may be unaware of the full practical impact of the tariffs on American jobs in their district or state. T&ID
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