President Trump, on December 2, 2019, announced via a Twitter post that the tariff exemptions granted to Argentina and Brazil from tariffs of 25 percent on steel imports and 10 percent on aluminum imports would end “effective immediately.” The President did not state whether the import quotas for those countries, which replaced duties on steel for both countries and aluminum for Argentina only, would remain in place in addition to the tariffs. It is possible that steel and aluminum imports from Argentina and Brazil will be subject to the tariffs alone or both the tariffs and the quota.
The move comes in response to “a massive devaluation” of both countries’ currencies, according to the President. This devaluation has enabled increased Chinese purchases of agricultural products from Argentina and Brazil, to the detriment of U.S. farmers that export to China. The Brazilian real has dropped from $0.2576 to $0.2360 since January 1, 2019, a decrease of 8.4 percent, while the Argentine peso declined from $0.0267 to $0.0167 during the same period, a decrease of 37.5 percent.
At this time, there have not been any notices regarding this change from the Bureau of Industry and Security (“BIS”) at the Department of Commerce, which conducted the Section 232 investigations, or from Customs and Border Protection (“CBP”), which administers the import quota program from both countries.
The Department of Commerce currently accepts tariff exclusion requests for individual steel and aluminum products for other countries currently subject to the Section 232 tariffs. The Department accepts quota exclusion requests for imports from Argentina and Brazil, and it is likely that this process will soon cover tariff exclusion requests as well. BIS and CBP have not yet issued updated information regarding the effective date of the duties or how the tariffs will be applied to future imports from Argentina and Brazil (including those coming into port on the date of President Trump’s announcement and those currently in transit).
Therefore, we recommend that you consider preparing exclusion requests immediately to avoid the assessment of duties on your steel and aluminum imports from these countries. While duties will be assessed initially, duties paid on products subject to an approved exclusion request are eligible for retroactive refunds dating back to the date of submission of the approved request.