Just when US importers were sort-of starting to get used to what types of imported iron and steel, aluminum, and Chinese origin products were subject to “additional duties”, the international trade landscape has shifted . . . again.
The three most widely publicized recent changes are each in distinctly different areas of the international trade map:
1. Aluminum and steel “additional duty” tariffs – Canada and Mexico:
Effective May 20, 2019, the 10% “additional duty” tariff rate on specified types of aluminum products was removed, for these products produced in Canada or Mexico. Now, these countries, along with Australia, are the only three from which the specified types of basic aluminum products are not subject to either the 10% “additional duty”, or to import quotas on these products. Argentina remains exempt from the 10% “additional duty”, but still subject to import quotas on the same products.
Also effective May 20, the 25% “additional duty” tariff rate on specified types of steel products war removed, for these products produced in Canada or Mexico. Now these countries, along with Australia, are the only three from which the specified types of basic steel products are not subject to either the 25% “additional duty”, or to import quotas on these products. Argentina, Brazil, and South Korea remain exempt from the 25% “additional duty”, but still subject to import quotas on the same products.
2. “Additional duty” tariffs on a fourth group of goods produced in China:
The preliminary list, published in the Federal Register on May 17, 2019, includes most (but not quite all) China origin products not already covered by the “additional duty” tariffs previously imposed on the first three groups of goods from China – a total of 3,085 additional full and partial tariff subheadings. Although the published announcement mentions possible rates of “up to” 25%, that is widely considered to be the most likely final percentage.
This proposal is currently in the formal “notice and comment” process, which includes a public hearing scheduled for June 17. Written comments on the proposed action may also be submitted through that date, via the www.regulatons.gov website.
As with the previous groups of Chinese goods, some items may be added to the preliminary list, and others deleted from it, before a final list is announced. There is no specific published schedule for further steps in the process, but late June or early July appears to be about the earliest likely time for the effective date of a final list announcement.
Although US-China trade talks are still continuing, there have been no recent further public announcements (or even indications) about resolution of any of the major open issues that contributed to the breakdown of the earlier discussions.
3. “Additional duty” tariffs on products of Mexico:
On May 30, the Administration announced a plan to push Mexico to address immigration issues, by imposing a new set of “additional duty” tariff rates on all products of Mexico. The President then “indefinitely suspended” them on June 7, after further negotiations with Mexico.
The originally announced intent was to pressure Mexico into taking actions to “dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States”, primarily the recent influx of migrants from Central American countries, coming through Mexico, who have been requesting asylum in the US. The rates were originally scheduled to begin at 5% effective June 10, and increase to:
10% on July 1
15% on August 1
20% on September 1
25% on October 1
Mexican officials have announced plans for actions to reduce the number of migrants from Central American countries entering Mexico, but relatively few details have thus far been publicized. Since the planned tariffs have been “suspended” but not “cancelled”, some observers suggest that they could be “revived” at some future time, if Mexico’s further actions on border security and trade issues are not seen as sufficient by the current Administration
Meanwhile, US-China trade negotiations continue, with no clear or obvious end date. This is still very much a “to be continued…” situation.
Transmark Customs Brokers continues to actively monitor all of these issues, and we are happy to share our perspective with current and prospective clients, at any time.