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It is the beginning of April, 2018, and the United States has a number of active trade initiatives that are underway. Some are commodity based, like steel and aluminum, others are bilateral, such as the escalating tariff-for-tat with China, while others are more outcome focused on issues like the Korea – U.S. Free Trade Agreement (KORU.S.). Given all the activity, it felt like an opportunity for a level-set for our Coppersmith importer and exporter clients to know what is happening.

Steel and aluminum:

The issue underlying the steel and aluminum tariffs is considered one of national security, which is why this is called a “Section 232” investigation, referring to Section 232 of the Trade Expansion Act of 1962. When initially announced by the President at the White House, the concern was that the tariffs would be applied at the same level for all countries with a 25% duty on steel and a 10% duty on aluminum. Since then, the Commerce Department has clarified the list of countries excluded from the additional duties. In addition to the original exclusions covering Canada and Mexico, additional countries have been added to the list including Argentina, Australia, Brazil, Canada, Mexico, South Korea and the member countries of the European Union.

For countries wishing to apply for exclusions in the future, the Federal Register notice published here gives them directions as to the process.

China:

The China decision fell under Section 301, an investigation that the Administration commissioned last August. The initial salvo of sanctions and an additional flat 25% in duty across $50 billion in imported products was announced by the United States Trade Representative in response to IPR violations that the administration alleges and covers nearly 1,300 tariff numbers, listed here. The Chinese were ready, and in response targeted a number of key U.S. exports including agricultural and luxury items like pork, wine, and fruit such as cherries with additional duties ranging from 15 – 25%.

Displeased with China’s response, the U.S.TR announced there could be even more sanctions imposed. The Chinese said the same, this time targeting soybeans for a 25% duty, a huge U.S. export to China.

Nothing has been imposed yet by either side, but the unquestionable threat is there. Above and beyond the additional costs to Chinese and American consumers are the implications it would have on the transportation companies such as steamship lines and airlines who move commerce through the air and on the water between the two countries.

KORU.S.:

Negotiations have concluded that will make changes benefitting automakers in the United States both in South Korea and here at home. In exchange, South Korea will be granted an exclusion from the Section 232 steel action by limited steel exports to the U.S. to no more than 2.7 million tons per year. The final text of the agreement is still being finalized for signature between the two countries.


At Coppersmith, we pay close attention to these ever-fluid changes in duty rates because we know that it will directly impact our customers and the rate they pay at the time of importation or the price of their goods to consumers in another country. For more information or to discuss your specific situation, contact Coppersmith today.

Bob Glover

Author Bob Glover

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