The president of Canada’s largest union said that while dairy and dispute settlement have not yet been resolved, the biggest issue preventing an agreement on NAFTA is the specter of Section 232 tariffs on autos. "If anything is to hold this deal up, it’s going to be the fact that Donald Trump has imposed 232 tariffs,” Jerry Dias, president of Unifor, said Sept. 20. “Why would Canada sign a trade agreement with the United States dealing with all the important issues, and then have Donald Trump impose a 25 percent tariff on automobiles? Why would we sign an agreement that leaves us exposed?”
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
CBP created Harmonized System Update (HSU) 1814 on Sept. 18, containing 1,329 Automated Broker Interface records and 292 harmonized tariff records, it said in a CSMS message. This update includes modifications that reflect changes to African Growth and Opportunity Act benefits for Rwanda (see 1807310051) and updates to Section 232 tariffs and quotas exclusions on steel and aluminum (see 1808300004).
Most of the former U.S. trade representatives on a panel at the Center for Strategic and International Studies agreed that a multilateral approach with China would have been better than tariffs, that the World Trade Organization could have been used to good effect, and that the Trans-Pacific Partnership would have made a difference. But Susan Schwab, who was a USTR during the George W. Bush administration, disagreed with much of that conventional wisdom. "From 2005 onward, we were seeing bad behavior and backtracking on the part of China, and we tried to get China's attention on a whole lot of issues that the current administration is talking about ... and we weren't able to get their attention. And we weren't able to get Europe and Japan to help us even though quietly Europe and Japan were talking about this.
President Donald Trump's authority to impose Section 232 tariffs on steel and aluminum is backed by constitutional provisions giving the president independent oversight of national security and foreign affairs, the Justice Department said in a Sept. 14 filing with the Court of International Trade. The filing was in response to a legal challenge from the American Institute for International Steel and two companies (see 1807200023) seeking a summary judgment to stop the tariffs. The Supreme Court also has previously ruled on the issue, DOJ said.
The Miscellaneous Tariff Bill became law Sept. 13 with the signature of the president, the White House announced on Sept. 13. The tariff rate reductions on nearly 1,700 items will take effect Oct. 13 -- 30 days after enactment. The reductions, which will last through the end of 2020, only affect the Most Favored Nation rate and not Section 301 tariffs. The International Trade Commission developed the list, and most of the items are intermediate goods, but some are consumer goods that are not produced in the U.S.
CBP will begin hourly processing for absolute quota between 11:45 a.m. and 7:45 p.m. ET every business day starting on Sept. 17, said CBP in a CSMS message. Absolute quota shipments will also be made available for cargo release during those times, it said. CBP began administering absolute quotas earlier this year as a result of the Section 232 tariff on steel and aluminum. The agency recently noted it was challenged by the limit for processing quotas only once a day and said hourly processing was coming (see 1809100017).
The Washington Tax and Public Policy Group opened a new division to focus on trade issues, the lobbying firm said in a news release. The new division, WTG Global, is led by Brian Diffell, who joined the firm in 2013 after working as a congressional staffer. Among issues WTG Global will work on are Section 232 tariffs on steel and aluminum, Section 301 tariffs and NAFTA, it said.
The Section 232 quotas on steel and aluminum from certain countries and exclusions from the Section 232 tariffs are among the toughest procedural challenges CBP is facing in dealing with those trade remedies, CBP officials from the Base Metals Center of Excellence and Expertise recently told the American Institute for International Steel. AIIS said in its newsletter that the group's customs committee held a conference call on Sept. 6 with Center Director Africa Bell and other officials. CBP is in the process of making fixes to aid in the remedying of those problems, it said.
It's uncertain how long it would take the International Trade Commission to report on the economic impact of an updated NAFTA, as required under Trade Promotion Authority, ITC Chairman David Johanson said during an Appropriations subcommittee hearing on Sept. 6. Commerce Subcommittee Chairman Jerry Moran, R-Kan., asked Johanson if the ITC's evaluation could be started before a deal signing and inquired on how long it might take. Johanson said he could not say how long it would take, but acknowledged they cannot even start without the text, and they do not have the text yet for the U.S.-Mexico agreement that was announced in late August. The ITC has 105 days from signing to finish, and if it took that long, a vote would likely come no sooner than the middle of next year, because Congress also has 45 session days to write the implementing legislation.
The Bureau of Industry and Security is set make changes to the process for requesting exclusions from Section 232 tariffs and quotas on steel and aluminum products. The interim final rule creates procedures for rebutting objections to exclusion requests, clarifies the criteria BIS reviews when deciding whether to grant or deny requests, and provides for broader exclusion requests based on ranges or dimensions within the same Harmonized Tariff Schedule code.