IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

Yes

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 23 Mar 2018 | Removal date: open ended
Still in force

Import tariff

On March 8, 2018 President Trump signed an order providing for the imposition of 10% tariffs on imports of aluminum from countries other than Canada and Mexico (pending renegotiation of NAFTA). The action was taken in the name of national security, although the president claimed in his remarks that the imports in question had been dumped and also alluded to the "Buy American" principle. The restrictions will take effect on March 23, 2018. He also stated that the order provided a means for the removal of barriers for countries that reached agreements with the United States, directing U.S. Trade Representative Lightizer to lead these negotiations. The president implied that the negotiations might deal not just with trade issues, but also defense spending. It is unclear which countries may respond to this announcement by entering into such negotiations, and which may respond by imposing retaliatory measures on imports from the United States.

The substance of the order is as follows:

  1. For the purposes of this proclamation, “aluminum articles” are defined in the Harmonized Tariff Schedule (HTS) as: (a) unwrought aluminum (HTS 7601); (b) aluminum bars, rods, and profiles (HTS 7604); (c) aluminum wire (HTS 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70), including any subsequent revisions to these HTS classifications.
  2. In order to establish increases in the duty rate on imports of aluminum articles, subchapter III of chapter 99 of the HTSUS is modified as provided in the Annex to this proclamation.  Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all imports of aluminum articles specified in the Annex shall be subject to an additional 10 percent ad valorem rate of duty with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.  This rate of duty, which is in addition to any other duties, fees, exactions, and charges applicable to such imported aluminum articles, shall apply to imports of aluminum articles from all countries except Canada and Mexico.
  3. The Secretary, in consultation with the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the United States Trade Representative (USTR), the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, and such other senior Executive Branch officials as the Secretary deems appropriate, is hereby authorized to provide relief from the additional duties set forth in clause 2 of this proclamation for any aluminum article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality and is also authorized to provide such relief based upon specific national security considerations.  Such relief shall be provided for an aluminum article only after a request for exclusion is made by a directly affected party located in the United States.  If the Secretary determines that a particular aluminum article should be excluded, the Secretary shall, upon publishing a notice of such determination in the Federal Register, notify Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the duties described in clause 2 of this proclamation.  The Secretary shall consult with CBP to determine whether the HTSUS provisions created by the Annex to this proclamation should be modified in order to ensure the proper administration of such exclusion, and, if so, shall make such modification to the HTSUS through a notice in the Federal Register.
  4. Within 10 days after the date of this proclamation, the Secretary shall issue procedures for the requests for exclusion described in clause 3 of this proclamation.  The issuance of such procedures is exempt from Executive Order 13771 of January 30, 2017 (Reducing Regulation and Controlling Regulatory Costs).
  5. (a)  The modifications to the HTSUS made by the Annex to this proclamation shall be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018, and shall continue in effect, unless such actions are expressly reduced, modified, or terminated. (b)  The Secretary shall continue to monitor imports of aluminum articles and shall, from time to time, in consultation with the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the USTR, the Assistant to the President for National Security Affairs, the Assistant to the President for Economic Policy, the Director of the Office of Management and Budget, and such other senior Executive Branch officials as the Secretary deems appropriate, review the status of such imports with respect to the national security.  The Secretary shall inform the President of any circumstances that in the Secretary’s opinion might indicate the need for further action by the President under section 232 of the Trade Expansion Act of 1962, as amended.  The Secretary shall also inform the President of any circumstance that in the Secretary’s opinion might indicate that the increase in duty rate provided for in this proclamation is no longer necessary.

On March 22, 2018 President Trump temporarily suspended additional tariffs on steel and aluminum products with respect to imports from the 28 member countries of the European Union as well as Argentina, Australia, Brazil, Canada, Mexico, and Korea. The tariffs took effect on March 23 with respect to shipments from all other countries.

On April 30, 2018 the president signed an executive order that the the "United States is continuing discussions with Canada, Mexico, and the EU," and that "unless I determine by further proclamation that the United States has reached a satisfactory alternative means to remove the threatened impairment to the national security by imports of aluminum articles from Canada, Mexico, and the member countries of the EU, the tariff ... shall be effective June 1, 2018, for these countries.

On May 31, 2018 the president signed an executive order modifying the application of these restrictions. The order provided that as of June 1, 2018, tariffs will no longer be suspended for steel or aluminum imports from exico, Canada, or the European Union. That same order stated that, "The United States has agreed on a range of measures with Argentina and Australia, including measures to reduce excess aluminum production and excess aluminum capacity, measures that will contribute to increased capacity utilization in the United States, and measures to prevent the transshipment of aluminum articles and avoid import surges."

This case began on an April 27, 2017 when President Trump signed a presidential memorandum for the secretary of commerce, directing the initiation of a case under the “national security” provision of U.S. trade law. Section 232(b)(1)(A) of the Trade Expansion Act of 1962 provides broad authority for the imposition of restrictions on imports that are found to impair national security, typically in cases where those imports are alleged to suppress domestic production and/or lead to dependence on foreign sources for items that are considered vital to national security. The statute and its predecessors date to the 1950s, and has often been associated with energy security. It has rarely been invoked, and it reached its high-water mark in the 1970s and 1980s.

The law may be invoked if the secretary of commerce finds that aluminum is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security. Such a finding may lead him to recommend actions and steps that should be taken to adjust aluminum imports so that they will not threaten to impair the national security; the imposition of those measures would be a policy decision. The secretary has up to 270 days to conduct the investigation. The memorandum directed the secretary of commerce to —

(a) consider the domestic production of aluminum needed for projected national defense requirements; the capacity of domestic industries to meet such requirements; the existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense; the requirements of growth of such industries and such supplies and services, including the investment, exploration, and development necessary to assure such growth; and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements;

(b) recognize the close relation of the Nation's economic welfare to our national security, and consider the effect of foreign competition in the aluminum industry on the economic welfare of domestic industries;

(c) consider any substantial unemployment, decrease in government revenues, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive aluminum imports; and

(d) consider the status and likely effectiveness of efforts of the United States to negotiate a reduction in the levels of excess aluminum capacity worldwide.

On February 16, 2018 the U.S. Department of Commerce released the results of its investigations into the national-security impact of imports of steel mill products and from imports of wrought and unwrought aluminum. The department found that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232. The president is required to make a decision on the steel recommendations by April 11, 2018, and on the aluminum recommendations by April 19, 2018. The aluminum report recommended to President Trump three alternative remedies that would cover both aluminum ingots and a wide variety of aluminum products.

  1. A tariff of at least 7.7% on all aluminum exports from all countries, or
  2. A tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or
  3. A quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.

Each of the three proposals is intended to raise production of aluminum from the present 48% average capacity to 80%, a level that would provide the industry with long-term viability. Each remedy applies measures to all countries and all steel products to prevent circumvention.

 

(In a related development, on August 10, 2018 President Trump wrote the following tweet: "I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!" While this action builds on the Section 232 tariffs on steel and aluminum, the underlying cause concerns a dispute between the U.S. and Turkish governments over the detention of an American citizen. GTA does not report on trade sanctions that are imposed for reasons of foreign policy.)

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

393 Metal wastes or scraps
7602 Aluminium waste and scrap.
760200 Aluminium waste and scrap.
414 Copper, nickel, aluminium, alumina, lead, zinc & tin, unwrought
7601 Unwrought aluminium.
760110 Aluminium, not alloyed
760120 Aluminium alloys
415 Unfinished products of copper, nickel, aluminium, lead, zinc or tin
7604 Aluminium bars, rods and profiles.
760410 Of aluminium, not alloyed
760421 Hollow profiles
760429 Other
7605 Aluminium wire.
760511 Of which the maximum crosssectional dimension exceeds 7 mm
760519 Other
760521 Of which the maximum crosssectional dimension exceeds 7 mm
760529 Other
7606 Aluminium plates, sheets and strip, of a thickness exceeding 0.2 mm.
760611 Of aluminium, not alloyed
760612 Of aluminium alloys
760691 Of aluminium, not alloyed
760692 Of aluminium alloys
7607 Aluminium foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm.
760711 Rolled but not further worked
760719 Other
760720 Backed
7608 Aluminium tubes and pipes.
760810 Of aluminium, not alloyed
760820 Of aluminium alloys
7609 Aluminium tube or pipe fittings (for example, couplings, elbows, sleeves).
760900 Aluminium tube or pipe fittings (for example, couplings, elbows, sleeves).
429 Other fabricated metal products
7616 Other articles of aluminium.
761691 Cloth, grill, netting and fencing, of aluminium wire
761699 Other

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