May 2, 2018

White House extends EU, Canada and Mexico steel/aluminum tariff exceptions.

Issue Overview

President Trump has extended the 25% tariff exception on imported steel and 10% on imported aluminum from the EU, Canada and Mexico until June 1, while negotiations continue. South Korea was granted a permanent exception from the tariffs, and similar permanent exceptions are anticipated for Argentina, Brazil and Australia. On April 30, the White House posted the official proclamations on steel and aluminum.

Josh Zive, lawyer and trade policy expert for the Coalition of American Metal Manufacturers and Users*, interprets the proclamations in this way:

  • Although the explanation of the South Korea permanent exception is fairly detailed, there are no details regarding the nature or timing of the “agreements in principle” that have been reached with Argentina, Australia, and Brazil.
  • Argentina, Australia, and Brazil’s exceptions are extended indefinitely, although the proclamations include a threat that the tariffs may be re-imposed if the agreements are not finalized “shortly.”
  • The proclamations note that “discussions” are ongoing with EU, Canada, and Mexico, but that the tariffs will take effect unless the President determines by June 1 that he is satisfied with alternative plans of protecting US steel producers.
  • The proclamations include the first recognition that the exceptions will require adjustments to remaining tariffs in order to satisfy the national security analysis produced by the Commerce Department. The proclamations claim that the new quotas obviate any need to adjust the tariffs as a result of the new permanent exception for South Korea.  However, it is not clear how the President plans to account for the indefinite exceptions for Argentina, Australia, or Brazil.

Josh cautions that these actions should be viewed as further escalation in the fight over the steel and aluminum tariffs. He adds that it is difficult to see how these actions will foster more productive discussions with our trading partners or resolve the instability that is causing price increases and longer lead times.

NAFEM’s Position

It is critical that manufacturers and consumers continue to make their voices heard in this policy debate. Members are encouraged to use the Member Advocacy Toolkit on this subject (below) and contact their elected officials to voice continued opposition to the tariffs.

*NAFEM is an active member of the Coalition of American Metal Manufacturers and Users, a broad organization of U.S. businesses and trade associations representing over 30,000 companies and over one million American workers in the manufacturing sector and the downstream supply chains of industries including aerospace, agriculture, automotive, consumer goods, construction, defense, electrical, medical, and recreational, among others. The Coalition was formed to oppose the Section 232 steel and aluminum tariffs which threaten American jobs and global competitiveness.  For additional information, visit www.tariffsaretaxes.org and follow the Coalition on Twitter at @tariffsaretaxes.