Section 232 Investigations

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The Office of the U.S. Trade Representative (USTR) has announced that President Trump is moving forward with additional tariffs in its Section 301 investigation involving China’s acts, policies and practices related to forced technology transfers and intellectual property rights. The USTR has finalized a third list of Harmonized Tariff Schedule (HTS) subheadings resulting in additional tariffs of $200 billion on imports of Chinese products. The additional tariffs will go into effect September 24, 2018, and will be 10 percent at the start. The USTR has stated that these tariffs will increase to 25 percent on January 1, 2019.

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.

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.

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…

In connection with President Donald Trump’s May 8, 2018 decision to cease U.S. participation in the Joint Comprehensive Plan of Action (JCPOA) and to re-impose all sanctions lifted or waived in connection with the JCPOA, the president has issued a new Iran-related Executive Order, “Reimposing Certain Sanctions With Respect to Iran.” This completes the first of two wind-down periods for the re-imposition of certain Iranian sanctions. The terms in the Executive Order are effective at 12:01 a.m. Eastern Daylight Time (EDT) on August 7, 2018. In addition, certain wind-down general licenses that allowed limited continued actions involving Iran will expire at 11:59 p.m. EDT on August 6, 2018.

The Department of Commerce has announced the initiation of a Section 232 investigation into whether the present quantity and circumstances of uranium ore and product imports into the United States threaten to impair national security. The decision was in response to a petition filed by two U.S. uranium mining companies and consultations with industry stakeholders, members of Congress, the Department of Defense, Department of Energy and other interested parties. Commerce Secretary Wilbur Ross has sent a letter to Secretary of Defense James Mattis informing him of the initiation of the investigation.

As reported in a prior post, the United States on July 6, 2018 began imposing 25 percent tariffs on approximately $34 billion worth of Chinese products imported into the United States. This was the result of the Office of the U.S. Trade Representative (USTR) undertaking a Section 301 investigation into “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.” Shortly after these tariffs were implemented, China retaliated by imposing tariffs on $34 billion worth of U.S. exports to China. In response, U.S. Trade Representative Robert Lighthizer announced yesterday, July 10, 2018, “As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.” He added, “For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior – behavior that puts the future of the U.S. economy at risk. Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.”

In March 2018, President Trump announced that under Section 232 of the Trade Expansion Act of 1962, the United States would increase tariffs on imports of certain steel products by 25 percent and imports on certain aluminum products by 10 percent on countries worldwide, including imports from the members of the European Union (EU) and Turkey. Although the EU was initially exempted from the imposition of tariffs, these tariffs came into place pursuant to two Presidential Proclamations issued on May 31, 2018. In response, the EU and Turkey announced their intent to impose retaliatory tariff measures.

On May 23, 2018, Secretary of Commerce Wilbur Ross announced the initiation of an investigation to determine the effects on the national security of imports of automobiles – including cars, SUVs, vans and light trucks – and automotive parts. See Thompson Hine International Trade Update, dated June 1, 2018. At that time, the Department…

President Donald Trump signed yesterday two presidential proclamations adjusting imports of aluminum and steel into the United States. In doing so, he stated that measures are now in place to address the impairment to the national security threatened by imports of steel and aluminum from Argentina, Brazil and Australia. South Korea previously reached an agreement with the United States on April 30 to limit its imports of steel. President Trump added, however, that “similar measures are not in place with respect to steel or aluminum imports from Mexico, Canada or the European Union” and that insufficient progress had been made in ongoing negotiations with these countries. He declared that, as of June 1, 2018, the Section 232 tariffs for steel of 25 percent and for aluminum of 10 percent will no longer be suspended for such imports from these countries. The White House indicated that it will continue discussions with them and remains open to discussions with other countries that may lead to permanent country-based exemptions.