May 25, 2018

Washington Wire: Section 232 Report on Steel Imports Submitted to White House

01/18/2018

Section 232 Report on Steel Imports Submitted to White House  

 
On January 11, 2018, the Commerce Department officially submitted its much delayed Section 232 report on the impact of steel imports on national security to the White House. This formally starts a 90 day clock for President Trump to determine whether he agrees with the report’s findings and if he will act on its recommendations. According to Secretary Wilbur Ross, Commerce will publish a summary of the report in the Federal Register and make a full version of the report with confidential and classified redactions available to the public after the President announces his decision. It remains unclear the reports recommendations or how the President will act, but he could impose tariffs of 25-35% as has been discussed he favors, implement Tariff Rate Quotas that trigger the tariff after imports hit a certain level, or not act and sit on the report and drag its feet in making a final determination. In addition to Commerce’s steel report, sources expect its Section 232 report on aluminum to arrive on President Trump’s desk shortly. One Voice has raised repeated concern about imposing restrictions on aluminum and steel imports that will lead to the increased shipments of metal products containing those materials.

 

 

 
EPA to Designate Counties not in Compliance of Ground Level Ozone by April 30
 
In a court filing last week, the EPA signaled it will designate the remaining 15% of U.S. counties considered not in attainment for Ground Level Ozone National Ambient Air Quality Standards (NAAQS) by April 30, 2018. The filing is the latest action in a lawsuit brought in December by fourteen Attorneys General against the EPA for missing the statutory deadline of October 1, 2017 to designate its NAAQS findings for the entire country. EPA labeled 85% of U.S. counties in attainment (or unclassifiable) in November, meaning these areas meet the new prerequisite of 70 parts per billion (ppb) of ozone in ambient air. This requirement was lowered in 2015 from 75 ppb.
 
The EPA’s brief was in response to a December court order requiring the agency to release attainment/nonattainment designations for the remaining 15% of the country by January 12, 2018. In its filing, the EPA stated it needed more time to work with states and the public because a nonattainment designation for any of the remaining 15% of U.S. counties will initiate the complicated process of devising State Implementation Plans (SIP) to reduce emissions. When the EPA designates a county as nonattainment, the governor must present a SIP describing steps the state will take to reach attainment status. If states do not submit a SIP, the EPA can start taking action on its own. These actions can include restricting new utility projects, facility expansions, and infrastructure initiatives. The April 30 deadline leaves a number of counties with hundreds of One Voice members still in limbo, including Cuyahoga in Ohio, Cook in Illinois, several in Pennsylvania and virtually all of California where only six of fifty-eight counties achieved attainment status.

 

 

 
NAFTA 2.0 Talks Enter Sixth Round
 
The sixth round of NAFTA 2.0 negotiations begin next week in Montreal, starting January 21 and extending to January 29. The negotiators have scheduled three days to discuss auto rules of origin, one of the more controversial subjects of the talks so far. Under current law, vehicles with at least 62.5% NAFTA country components may cross borders duty free. Since the beginning of negotiations last summer, representatives of the U.S. have called for an increase of the component threshold to 85% while also mandating that 50% of a vehicle originate within the U.S. This position is not only opposed by Canada and Mexico, but also the U.S. auto industry and supply base who fear foreign manufacturers will simply choose to pay a 2.5% tariff on the finished vehicle rather than restructure their current supply chain to comply with the new 85% level. During the meetings on auto rules of origin, sources do not expect Mexico to provide an official proposal, but they do expect Canada to present an unofficial proposal of possible solutions.

 

 

 
Latest Funding Bill Postpones Medical Device and “Cadillac” Taxes
 
The latest continuing resolution to keep the government funded past January 19 also delays taxes on medical devices and “Cadillac” health insurance plans to 2020. Congress initially included both taxes in the Affordable Care Act of 2010. The medical device tax is a controversial $29.1 billion excise tax on medical devices that will force manufacturers to cut their research and development budget as well as eliminate jobs. This will allow One Voice additional time to seek a repeal of this burdensome and costly tax on America’s medical device manufacturers. The Cadillac tax is a 40% excise tax on the value of employer-sponsored health plans exceeding $10,200 per individual and $27,500 per family annually. This victory provides relief to the almost 22% of One Voice members who reported in 2017 their current plans exceed the Cadillac tax threshold.