May 31, 2018

New White House Trade Proclamations: Tariffs for Some, Exemptions for Others

By Douglas J. Heffner and Richard P. Ferrin

President Trump announced on May 31, 2018, that the United States will implement steel and aluminum tariffs on Canada, Mexico and the European Union (EU) effective June 1, 2018, thereby ending temporary exemptions previously granted to those countries. The president also issued two proclamations making permanent the temporary exemptions granted to Argentina, Australia and Brazil from 25 percent tariffs on steel imports, and also making permanent the temporary exemptions granted to Argentina and Australia from 10 percent tariffs on aluminum imports.

Today’s steel proclamation states that the tariffs for Argentina and Brazil will be replaced by product-specific quotas on steel imports, and today’s aluminum proclamation states that tariffs for Argentina will be replaced by quotas on aluminum imports. The alternative arrangements for Australia were not announced in either of today’s proclamations. Please note that Korea had previously been granted a permanent exemption from the steel tariffs in exchange for a quota system.

The proclamations do not provide any permanent exemptions, or extend the temporary exemptions, for Canada, Mexico or the EU. A White House press release stated that the United States was “unable to reach satisfactory arrangements” with Canada, Mexico and the EU regarding the steel and aluminum tariffs and will, therefore, implement the tariffs on steel and aluminum imports from those countries. According to Secretary of Commerce Wilbur Ross, renegotiations for the North American Free Trade Agreement with Canada and Mexico were “taking longer than we had hoped,” and similar delays in talks with the European Union meant that there was insufficient progress to warrant permanent exemptions or an extension of existing temporary exemptions for those countries.

For further information, contact the authors below, or any other member of the Customs and International Trade Team.

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