U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo announced that consultations have begun with Japan on Section 232 tariffs on Japanese steel and aluminum. They said that the solutions will be aimed at strengthening "our democratic alliance," and the statement says that Japan and the U.S. share "similar national security interests." Japan, Canada, the European Union and other longtime allies of the U.S. were insulted that the Section 232 tariffs, which purportedly are to protect national security, applied to their countries.
U.S. Trade Representative Katherine Tai said that the administration is "very supportive" of Leveling the Playing Field Act 2.0, a bipartisan bill from Ohio's senators that would clarify how dumping calculations are made, would provide for expedited successive investigations when there is an import surge from a new country on a product subject to a trade remedy order, and would address extraterritorial subsidies (see 2104160037)
The U.S. will administer tariff rate quotas starting Jan. 1 on European steel across 54 product categories, with an annual 3.3 metric ton limit, but the products that are currently covered by Section 232 exclusions won't count against the quotas. Those exclusions will automatically renew through the end of 2023, the Commerce Department announced. For both steel and aluminum, derivative products will no longer be subject to tariffs or quotas.
If the demand for steel spikes after the infrastructure investments get underway, there will be room in the tariff rate quota for growth, according to the agreement reached by U.S. and European negotiators. If there is a 6% increase in demand for steel compared with 2021, the TRQ on 54 steel products will increase by 3%. And if there is a 12% increase, it will increase by 6%. But changes smaller than that amount will not result in a change to the 3.3 million metric-ton quota. That quota, which will be administered quarterly, takes effect Jan. 1 (see 2111010029).
Correction: Superon Schweisstechnik India LTD. challenged CBP's classification of welding wires as subject to Section 232 tariffs (see 2110270045).
The House Ethics Committee unanimously found that "there is substantial reason to believe" that Rep. Mike Kelly's wife purchased at least $15,000 worth of stock in Cleveland-Cliffs based on non-public information about a Section 232 investigation into the import of laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators. The Kellys live in Butler, Pennsylvania, where about 1,400 people work for the steel company, making electrical steel. The company had repeatedly argued that unless the 25% tariffs on steel were extended to these downstream products, it would have to close the Butler plant.
The Tariff Reform Coalition, which includes trade associations representing major metal consumers such as automakers, boat manufacturers, the beer industry and machinists, as well as exporters hurt by retaliatory tariffs, sent a letter to senators asking them to support the Section 232 tariff reform bill re-introduced this month by Sens. Pat Toomey, R-Pa., and Mark Warner, D-Va. The Oct. 19 letter, signed by 27 trade groups, said that the bill (see 2110050040) would ensure "that all national interests are taken into account prior to the imposition of tariffs or quotas. These interests were not properly weighed in the case of steel and aluminum and our industries are still reeling from the effects of these tariffs.... Invoking national security as a justification to protect a few industries, to the detriment of countless others, sets a bad example for the rest of the world and opens the door for other countries to take similar actions." They noted that if the bill becomes law, and then if Congress does not approve the steel and aluminum tariffs within 75 days, they would be repealed.
Senate Democrats would like to increase funding for CBP's Office of Trade by $10 million to better identify and prevent entry of goods made with forced labor, and an additional $10 million for trade enforcement, including the 21st Century Framework initiative, enforcement of safeguard and sections 232 and 301 tariffs, and going after online counterfeiting.
International Trade Today is providing readers with the top stories from Oct. 11-15 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Even with the surge of migrants crossing the Mexican border, the nominee to lead CBP fielded plenty of questions on trade during his appearance in front of the Senate Finance Committee. Chairman Sen. Ron Wyden, D-Ore., told him, "This committee has a special interest in ensuring that CBP’s trade mission doesn’t get short shrift. Enforcing trade laws vigorously and working to stay a step ahead of trade cheats is key to protecting jobs, businesses and innovators in America, and CBP is right at the heart of that challenge. Too often in the past, including during the Trump administration, trade enforcement has been a secondary issue for CBP." He said his committee "is going to continue looking for ways to strengthen our trade enforcement even further."