On The Hill

Steel, Aluminum Left Out of Impending Tariff Relief

On Monday (Apr. 20), the United Steelworkers Union expressed its frustration with President Trump’s surprise decision to allow the deferral of some import duty payments for 90 days. The group said the deferral of these payments undermines Trump’s commitment to “buy American and hire American.”

The order does not apply to duties Trump imposed on China and the European Union using Section 301 of the 1974 Trade Act, steel and aluminum tariffs applied under Section 232 of the 1962 Trade Expansion Act and washer and solar duties under Section 201 of the 1974 Trade Act. It also does not apply to anti-dumping and countervailing duties.^[1] 

“Auto workers in Michigan whose plants are either shuttered or have been repurposed to make ventilators for COVID-19 victims … wonder why importers of Japanese cars can delay tariff payment for 90 days when many of those same importers also received loans which may very well be forgiven,” Steelworkers President Thomas Conway said in a statement.

Conway said steelworkers appreciate the latest action doesn’t apply to the duties Trump imposed on Chinese, European, and other foreign goods. “We fought for that. But many other domestic producers are also facing tremendous competitive pressures from importers, especially those who have outsourced their production,” Conway added.^[2] 

Mexico’s COVID-19 Response

Mexico’s decision to shut down hundreds of factories it does not consider essential has dealt a blow to North American supply chains. In recent weeks, the Mexican government has been criticized for the guidance it offered for an “essential activity” during the pandemic, leaving out materials needed to make critical goods. The U.S. and Canada’s guidances have language specifying supply chain needs.

The Trump administration urged Mexico to sync its guidance with the U.S. Mexican President Andrés Manuel López Obrador said Thursday (Apr. 23) that he does not intend to make changes to Mexico’s policy until the U.S. economy starts to reopen, signaling an immediate solution is unlikely.

More Time for USMCA Auto Rule

The Trump administration is giving automakers a new deadline of July 1, 2020, to submit a petition with a draft plan to comply with the U.S.-Mexico-Canada Agreement (USMCA)’s auto rules.^[3] 

The new guidance is set to be published in the Federal Register on Tuesday.

This gives auto companies more time to comply with USMCA’s rules on a certain portion of their production. The USMCA is still expected to go into effect July 1, but lawmakers and U.S. businesses have asked the administration to delay the effective date due to the pandemic.

Late Friday evening, the administration notified Congress that USMCA would, in fact, take effect on July 1.

The three countries still need to wrap up certain requirements in the next two months, but the move triggers the clock for the deal to enter into effect in July. The step, however, is opposed by many North American business leaders who sought to delay USMCA implementation because of the economic difficulties arising from the spread of the coronavirus.^[4] 

References

^[1] Palmer, Doug. “Trump grants some temporary tariff relief, but not for Chinese goods in trade war.” Politico Pro, 19 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/trump-grants-some-temporary-tariff-relief-but-not-for-chinese-goods-3979529

^[2] Palmer, Doug. “Steelworkers lash out at Trump over duty deferral decision.” Politico Pro, 20 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/steelworkers-lash-out-at-trump-over-duty-deferral-decision-3979539

^[3] Behsudi, Adam. “U.S. grants more time for USMCA auto rule implementation plans.” Politico Pro, Apr. 20 2020. https://subscriber.politicopro.com/article/2020/04/us-grants-more-time-for-usmca-auto-rule-implementation-plans-3979536

^[4] Rodriguez, Sabrina. “North American trade deal to take effect on July 1.” Politico Pro. 24 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/north-american-trade-deal-to-take-effect-on-july-1-1923267