In a new Proclamation, published just four hours before the May 1 deadline for the expiration of Country Exemptions, the Administration announced changes to the Section 232 regime.
Canada, Mexico and EU
The exemptions for Canada, Mexico, and the members of the European Union (EU) are extended to June 1, 2018, so that the United States can continue discussions with these countries. US, Canadian and Mexican negotiators met over the last two weeks in an attempt to reach the overall outlines of a modernized North American Free Trade Agreement (NAFTA). The US Trade Representative (USTR) Ambassador Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo held multiple bilateral and trilateral meetings. The three countries will reconvene at the ministerial level on May 7. The EU has put considerable pressure on the Administration, seeking complete and permanent Country Exemptions from Section 232 tariffs.
Korea
The exemption for Korea is now permanent, based on the agreement between the United States and Korea. It establishes a 70% quota on imports of steel products from Korea, based on average annual import volumes during the 2015 to 2017 period. The Proclamation provides no details about the quota other than “US Customs and Border Protection (CBP) of the Department of Homeland Security shall implement this quota as soon as practicable, taking into account all steel articles imports from South Korea since January 1, 2018.” The Proclamation also contains the threat that the Trump Administration “will monitor the implementation and effectiveness of the quota and other measures agreed upon with South Korea in addressing our national security needs, and {it} may revisit this determination, as appropriate.”
Argentina, Australia, and Brazil
The exemptions for Argentina, Australia, and Brazil have been extended indefinitely because “the United States has agreed in principle with Argentina, Australia, and Brazil on satisfactory alternative means to address the threatened impairment to our national security posed by steel articles imported from these countries.” Therefore, the exemptions will continue so that the United States can “finalize the details of these satisfactory alternative means to address the threatened impairment to our national security posed by steel articles imported from these countries”. However, if satisfactory terms cannot be reached, the Trump Administration “will consider re-imposing the tariff.”
Duty Drawbacks
On a technical issue, the Presidential Proclamation also states that drawback will not be available for the Section 232 duties.