March ’23 at-a-glance … taxes, tariffs & trade

USITC confirms that tariff costs are passed along to U.S. business and consumers

The U.S. International Trade Commission (USITC) confirmed that U.S. businesses are paying for the cost of tariffs. Following a mandatory, four-year review, USTIC released its report on the impact of Section 232 tariffs on steel and aluminum tariffs and Section 301 tariffs on imports from China. USITC found that import prices rose in near lock-step with the tariffs, meaning that more than $173 billion in tariffs fell directly on U.S. businesses, workers, consumers and families. As it has all along, NAFEM will continue working on behalf of members to illustrate the negative impact of the tariffs on U.S. businesses and advocate that they be abolished.

New tariffs, sanctions on Russia/Belarus announced

President Biden issued two presidential proclamations affecting Russian imports detailed in a White House fact sheet:

• A 200% tariff on aluminum articles and derivative aluminum articles produced in Russia, effective March 10.
• A 200% tariff on aluminum articles with any amount of primary aluminum or derivative aluminum smelted or cast in Russia, effective April 10.
• Duty rate increased from 35% to 70% on certain Russian-origin articles.

Additionally, the Office of Foreign Assets Control (OFC) of the U.S. Treasury expanded sanctions to individuals involved in Russia’s metals and mining sectors. This action blocks their assets and prohibits U.S. persons from transacting with those on the list. More details are here.

Separately, the U.S. Department of Commerce Bureau of Industry and Security provided information on additional sanctions. The agency:

• Expanded the scope of industry sector restrictions to include oil and gas production, commercial and industrial items, chemical and biological precursors, and luxury goods.
• Imposed export controls on Iranian unmanned aerial vehicles and their use by Russia against Ukraine.
• Added 175 entities to the Entity List for supporting Russia’s defense industry and war efforts and designated 79 entities as Russia/Belarus Military End-Users, which imposes some of the strictest U.S. export controls.

New documents clarify Uyghur Forced Labor Prevention Act

The Uyghur (China) Forced Labor Prevention Act, which went into effect June 30, 2022, largely prohibits importing any goods, wares, articles and merchandise mined, produced or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or produced by certain entities. Exceptions apply when U.S. Customs and Border Protection (CBP) determines that the importer of record has complied with specified conditions and, by clear and convincing evidence, that the goods, wares, articles or merchandise were not produced using forced labor.

USTR releases 2023 Trade Agenda; priorities similar to last year

The United States Trade Representative (USTR) released its 2023 Trade Policy Agenda and 2022 Annual Report March 1. The administration’s approach to trade issues is very similar to the agenda USTR presented last year with a “worker-centered trade agenda.” USTR plans to focus on labor rights through the United States, Mexico, Canada Agreement (USMCA) and the Uyghur (China) Forced Labor Prevention Act, decarbonization and sustainable environmental policies, and supply chain resiliency. Similarly, USTR reemphasized its commitment to engaging with multilateral institutes and key trading partners, re-aligning the U.S.-China relationship, supporting U.S. manufacturing and U.S. agriculture, ensuring vigorous enforcement efforts, and including stakeholder/industry engagement.