New Tariffs: Steel, Aluminum, China
President Trump has announced new tariffs this year imposed on imports from various countries under two bases; first, he imposed a 25% steel tariff and 10% aluminum tariff under section 232 of the Trade Expansion Act of 1962. This section allows the President to impose tariffs for national security reasons (the full reports and reasoning are available here).
Second, President Trump has announced a new 25% tariff against imports from China under section 301 of the Trade Act of 1974 (full announcement here). The Chinese tariffs are designed to punish, or at least counter-act, unfair trade practices related to technology transfer, intellectual property, and innovation by China.
To date, the fact that these tariffs might only end-up hurting domestic industries is getting a lot of attention (there is a lot of tariff activity). There seems to be little awareness or recognition — both amongst importers and the news community as a whole — that there is very large loophole in both new tariffs: exclusions.
Exclusion Requests Are Fairly Granted
The section 232 tariffs on steel and aluminum permit importers to request exclusions from certain products, on certain grounds. Initially, the official announcements and proclamations seemed to only permit exclusion requests on national security grounds, however, once the exclusion request form (steel) was published it seemed to permit exclusion requests to be filed for basically any reason (including insufficient U.S. availability, No U.S. Production, and “Other”).
Based on exclusions filed on behalf of our clients, exclusion requests for the 232 tariffs are being fairly (if not liberally) granted.
Now, the announcements with regard to the new section 301 tariffs being imposed also mention the possibility of requesting exclusions (announcement here):
USTR recognizes that some U.S. companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks.
UPDATE (7/10/2018): USTR issued a news release (just before 5pm on July 6) about the Section 301 exclusion request process (HERE). The soon-to-be-published Federal Register notice is accessible HERE. The form that can be used for making the exclusion requests is available HERE.
Importers may be in a panic about the new tariffs; they should not. They should calmly consider requesting exclusions for the products so that the new tariffs will not apply to them, and they will not be required to pay the extra duties. Although the exclusion process can be done by anyone, as always, hiring an experienced attorney to advocate for the exclusion of the particular products will help to ensure the best result possible.
Want to discuss a possible section 232 or 301 exclusion?
If you’re interested in applying for an exclusion for section 232 or 301 tariffs, you can give us a call or complete the contact form below.