President Trump today signed executive orders imposing a 25% tariff on imported steel and a 10% tariff on imported aluminum products under section 232 of the Trade Expansion Act of 1962 (the provision that allows additional tariffs when national security is affected).
These tariffs will not go into effect for at least 15 days.
The president announced that Canada and Mexico will be exempted temporarily, contingent upon the NAFTA re-negotiations. Individual country negotiations will be permitted regarding exemptions that will be based in part on whether these countries are honoring commitments to the United States. President Trump indicated that negotiations with China are ongoing.
Industries that may be affected include:
These tariff measures were predicated on a U.S. Department of Commerce investigation into the impact on national security from imports of steel mill products and imports of wrought and unwrought aluminum. Commerce determined that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security” as defined by section 232. The investigations suggested that the president impose tariffs or quotas to enable the industries to reach 80% capacity. The aluminum industry was found to be operating at 48% capacity and the steel industry was found to be operating at 73% capacity.
What steps do companies need to consider? As a first step, companies need to understand exactly which imported products and volumes may be affected and examine their U.S. Customs and Border Protection import data. Once they have this information, then companies can assess the effects of the new tariffs, whether to consider domestic sourcing options in the short term, and explore certain strategies and customs duty recovery efforts to minimize the effects of the new tariffs.
For more information, contact a professional with KPMG’s Trade & Customs practice:
Douglas Zuvich | +1 (312) 665-1022 | email@example.com
Andrew Siciliano | +1 (631) 425-6057 | firstname.lastname@example.org
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