October 22, 2019

Washington Wire: Update on Country Exemptions for Steel & Aluminum Tariffs

05/01/2018

Late on April 30th, and just hours before a midnight deadline, the President signed two proclamations extending temporary exemptions from 25% steel tariffs and 10% on aluminum for the European Union (EU), Canada, and Mexico through May 31, 2018. He also announced tentative agreements with Australia, Argentina, and Brazil, in addition to the previously announced deal with South Korea.

The Korean government agreed to limit steel imports into the U.S. to 70% of its annual volume between 2015 and 2017 while remaining subject to the 10% aluminum tariffs. The 25% tariffs on steel and 10% on aluminum remain in place on the rest of the world, including imports from Japan, Russia, China, Turkey, Taiwan, Hong Kong, and Switzerland, which is not part of the EU.

The U.S. is seeking Voluntary Export Restraint agreements, also known as import quotas, with the remaining countries, with the EU being a specific focus. Commerce Secretary Wilbur Ross on Friday said, “We are asking of everyone: quotas if not tariffs.” The EU has directly stated they will not agree to limit exports of steel or aluminum to the U.S. or agree to a Korea-type quota, despite Secretary Ross indicating that the U.S. would agree to only a 90% levels – or a 10% reduction compared to 2016-2017 averages. During the 1994 Uruguay Round talks establishing the World Trade Organization, all parties, including the U.S., agreed to ban the use of import quotas.

One Voice members report 30-40% price increases for steel and 20-30% on aluminum, including for domestic sources, while lead times have tripled. The 25% tariff is on top the 165 antidumping and countervailing duties already in place on imported steel products, including the 130% on cut-to-length plate from some companies in Italy and 48% from Japan imposed under the previous administration.

PMA and NTMA are founding members of a coalition (www.tariffsaretaxes.org) of U.S. manufacturers who use steel and aluminum and speak for the over 6.5 million Americans employed in steel using jobs and the millions more relying on aluminum. One Voice is asking the administration heed the calls of the Aluminum Association, who oppose the broad reach of the tariffs, and have announced the need for a global approach to addressing Chinese overcapacity.

The tariffs amount to a tax on U.S. manufacturers who will pay a higher price for their raw materials, while their foreign competitors continue to benefit from illegal subsidies provided by their government. One Voice members report the loss of business as customers turn to importing stampings, tools, dies, and other metal products, all coming into the U.S. tariff-free and containing foreign steel and aluminum.

One Voice is working with the administration to educate them about the unintended consequences of the tariffs on millions of American workers. Lawmakers on Capitol Hill are also beginning to take notice and are circulating a letter asking the Department of Commerce to fix the broken product exclusion process, which now has roughly 4,000 applications pending from companies requesting the government exclude a specific product from the tariffs. Please click here to send your member of Congress a note asking they sign on to the letter.

Please contact info@metalworkingadvocate.org if your company has submitted an exclusion request, as lawmakers are collecting anonymous stories about the challenges companies, particularly U.S. small businesses, face filing an exclusion. Click here to access the exclusion application form.