The past two weeks have been a whirlwind of trade news surrounding the additional duties the U.S. government has levied on imports. Willson International’s U.S. Regulatory team has been fielding a number of questions on the impact of the changes. In this article, we hope to clarify some of these topics.
Section 232 Steel and Aluminum Tariffs lifted from Canada and Mexico
Effective Monday May 20th, the Section 232 tariffs on steel (25 percent) and aluminum (10 percent) were lifted for goods manufactured in Canada and Mexico entering the United States. These tariffs remain in effect for steel and aluminum manufactured in most other countries. The major commodities impacted are raw materials rather than fully manufactured goods.
Section 232 Steel and Aluminum Tariffs reduced for Turkey
Effective Friday, May 21st, the rate of duty on steel manufactured in Turkey was reduced from 50 percent to 25 percent. However, The President of the United States also determined that Turkey is no longer a developing country. Therefore, beginning May 17th, 2019, Turkish exports are no longer eligible for the Generalized System of Preferences (GSP) program or safeguard exemptions for solar cells and residential washers.
Section 301 Tariffs on China Origin Goods Increase
Effective May 10th, List 3 of the China 301 tariffs increased from 10 percent to 25 percent. Goods considered ‘on the water’ at the time of the increase for ocean clearance have a slight reprieve as the 10 percent duty will be assessed until the end of May.
Section 301 Tariffs yet to be finalized
The U.S. Trade Representative has issued a ‘modification’ to the current Section 301 investigation. This modification adds 3,805 full and partial tariff subheadings to the current commodities subject to additional duties. If enacted, a 25 percent duty will be added to the goods on the list. This will be referred to as Tranche 4. At this time the action is not official. There will be a public hearing on June 17th, 2019.
Conclusion
We often see the topics of Section 232 and Section 301 duties intermingled. These are different sets of legislation. Section 232 impacts steel and aluminum products only. Nearly all imports of steel and aluminum were impacted. However, the duties have been removed for Canada and Mexico.
Section 301 is only for goods manufactured in China. These tariffs are broad reaching. If you have steel and aluminum products made in China, those would still be covered by Section 232, rather than 301.
Please note all of these tariffs are driven by the tariff number and country of manufacture of the goods when they enter the United States. The country of export has no bearing on the assessment of duty.