Ad Valorem Tariffs are Now Official
Ad valorem tariffs are now mandated on steel and aluminum imports from all countries, now including Canada, Mexico and the European Union. As of midnight on June 1, 2018, an additional 25% duty will be placed on imported steel and an additional 10% on aluminum. Only South Korea has received a permanent exemption from the tariffs, in exchange for concessions in trade negotiations and establishing quotas (which are largely filled). Originally when President Trump announced these taxes in March of 2018, Canada, Mexico and the EU were among some of the countries that received exemptions until June 1. In fact, one of the reasons Trump granted exemptions for Canada and Mexico was to help push NAFTA talks, but it looks like those are not making way as planned. In fact, Trump may be imposing another additional tariff on cars.
What should importers do?
Companies that rely on products from these countries should seek specific product exclusions from the tariffs. Dickinson Wright has prepared and filed many product exclusion requests and has provided a webinar to introduce companies on the process. Check it out here.
The law firm also states, “Additionally, Canada, Mexico, and the EU (as well as other affected countries) thereafter will publish lists of items upon which that country will impose retaliatory tariffs. These products include steel and aluminum products as well as any product that may be of practical and political importance to the US (there is no requirement that it be linked to steel and aluminum production). It is imperative that companies monitor those retaliation lists to ensure that its goods will not be impacted by retaliatory tariffs. In the event that retaliatory measures impact a company, Dickinson Wright can assist with working with the foreign government to potentially minimize the consequences.”
According to Money.CNN.com “Mexico quickly said the US action was not justified, and vowed to retaliate with comparable penalties on American lamps, pork, fruit, cheese and flat steel. Europe also said it would start the process for enacting retaliatory tariffs. It did not announce details, but the bloc has previously threatened 25% tariffs on US products such as motorcycles, denim, cigarettes, cranberry juice and peanut butter.”
In addition to the steel and aluminum tariffs, the administration says it is still moving forward with tariffs on Chinese goods, as well. When? That is still up in the air. According to money.cnn.com, “The final list of covered imports subject to tariffs will be announced by June 15. Those tariffs will take effect ‘shortly thereafter.'” It hasn’t even been a full 30 days since China and U.S. had agreed to work on their trade relationship, and China’s Commerce Ministry said the announcement is “obviously in violation” of their recent agreement.