2018

The Department of Commerce’s Bureau of Industry and Security (BIS) has amended the exclusion request process for the tariffs on certain steel and aluminum products implemented under Section 232 of the Trade Expansion Act of 1962. On March 8, 2018, President Trump exercised his authority under Section 232 and imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports (with certain countries receiving exemptions). U.S. Customs and Border Protection (CBP) began collecting the tariffs on March 23, 2018.

BIS has acknowledged that the number of filings has far surpassed expectations – as of August 20, BIS had received more than 38,000 exclusion requests and more than 17,000 objections – amid growing concerns over the importance of a transparent, fair and efficient product exclusion and objection process. The amendments seek to address these concerns and will create a process for rebutting objections filed to exclusion requests. They also attempt to clarify the criteria BIS considers during the review process to grant or deny an exclusion request.

The U.S. Trade Representative (USTR) has closed the public comment period on whether to take further action in the form of an additional 10 or 25 percent tariff on certain products imported into the United States from China with an annual trade value of approximately $200 billion. Nearly 6,000 comments were received during the comment…

On August 31, 2018, President Donald Trump officially notified Congress of his administration’s intent “to enter into a trade agreement with Mexico — and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade contained therein.” Notification was necessary under the provisions of the Trade Promotion Authority (TPA) legislation, which allows “fast track” consideration of trade agreements (i.e., Congress can vote to approve or reject a trade deal but cannot amend the text of the agreement). In the wake of the president’s notification, U.S. Trade Representative Robert Lighthizer indicated that a resulting free trade agreement could either be bilateral (with Mexico) or trilateral (with Canada also), depending upon the final negotiated text of any agreement. It has been questioned, however, whether a bilateral agreement fulfills TPA requirements since Congress had been earlier notified of the Trump administration’s intent to renegotiate a trilateral North American Free Trade Agreement (NAFTA). If Congress believes that a free trade agreement with only Mexico does not qualify for TPA consideration, amendments could be offered by Congress, potentially complicating any final agreement. With Congressional notification under the TPA, the actual text of any agreement must be submitted to Congress within the next 30 days for its consideration.

Late Wednesday night, Secretary of Commerce Wilbur Ross announced targeted relief from the voluntary quotas the United States successfully negotiated with South Korea, Argentina and Brazil on steel, and with Argentina on aluminum. U.S. companies may now apply for product exclusions seeking steel or aluminum from these countries based on insufficient quantity or quality available from U.S. steel or aluminum producers. In such cases, the Department of Commerce has stated that an exclusion from the negotiated quota limits “may be granted and no tariff would be owed.” Previously, the product exclusion request processes were limited to steel and aluminum from countries that were fully subject to the Section 232 steel and aluminum tariffs of 25 percent and 10 percent, respectively, and did not allow for the submission of product exclusion requests for steel and aluminum products subject to the Section 232 tariffs from countries with negotiated quotas, which allowed imported products within the quotas to be exempt from those tariffs.

In early August 2018, after it was determined that the Russian government was involved in an attempt to assassinate UK citizen Sergei Skripal and his daughter Yulia Skripal with the use of a Novichok nerve agent, the U.S. Department of State (State Department) ruled under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 that the Russian government had used chemical or biological weapons in violation of international law. In an August 27, 2018 Federal Register notice, the U.S. government announced its sanctions in response, which became effective that date:

  • Foreign Assistance: Termination of assistance to Russia under the Foreign Assistance Act of 1961, except for urgent humanitarian assistance and food or other agricultural commodities or products.
  • Termination of Arms Sales: Termination of (a) sales to Russia under the Arms Export Control Act of any defense articles, defense services or design and construction services; and (b) licenses for the export to Russia of any item on the United States Munitions List.
  • Termination of Arms Sales Financing: Termination of all foreign military financing for Russia under the Arms Export Control Act.
  • Denial of U.S. Government Credit or Other Financial Assistance: Denial to Russia of any credit, credit guarantees, or other financial assistance by any department, agency or instrumentality of the U.S. government, including the Export-Import Bank of the United States.
  • Exports of National Security-Sensitive Goods and Technology: Prohibition on the export to Russia of any goods or technology on that part of the control list established under Section 2404(c)(1) of the Appendix to Title 50.

On August 27, 2018, the United States and Mexico reached a preliminary agreement “in principle, subject to finalization and implementation,” to update the North American Free Trade Agreement (NAFTA). The Office of the U.S. Trade Representative (USTR) stated that the updated agreement will “support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.” In reaching the agreement with Mexico, President Trump stated that, “America has … finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our Nation’s wealth.”

On August 10, 2018, President Trump announced on Twitter that the United States would double Section 232 steel and aluminum tariffs on Turkey, referencing the drop of the Turkish lira as his reason for hiking the tariffs. Later that day, the White House issued a presidential proclamation directing that a 50 percent ad valorem tariff…

President Trump has signed into law the Foreign Investment Risk Review Modernization Act (FIRRMA) as part of the National Defense Authorization Act for Fiscal Year 2019 (Title XVII of the NDAA). The FIRRMA expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to address national security concerns over foreign exploitation of certain investment structures that traditionally have fallen outside of CFIUS jurisdiction. Additionally, FIRRMA modernizes CFIUS’s processes to better enable timely and effective reviews of covered transactions.

As reported by Law360 this week, a California federal judge struck down a food additive exporter’s attempt to throw out claims saying it had smuggled glycine into the United States from China without paying more than $11 million in required duties, calling the exporter’s use of the Fifth Amendment “both a sword and shield.”

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The Office of the United States Trade Representative (USTR) has finalized and released its second list of Harmonized Tariff Schedule (HTS) subheadings totaling approximately $16 billion worth of imports from China that will be subject to a 25 percent retaliatory tariff as part of the U.S. government’s ongoing Section 301 investigation and response to China’s…