Jan 31 | 2020
(Americas-Global) Aluminum, Steel Derivatives Face Increase
U.S. President Donald Trump has announced plans to increase tariffs on certain derivative steel and aluminum products by as much as extra 25 percent, raising uncertainty for the breakbulk sector.
Following shortly after Trump’s Phase 1 deal with China, the signed proclamation issued by the White House suggests that global trade tensions are unlikely to die down in the short term.
“I have concluded that it is necessary and appropriate in light of our national security interests to adjust the tariffs imposed by previous proclamations to apply to the derivatives of aluminum articles and steel articles,” according to Trump’s White House statement.
Foreign Producers Circumvent Duties
The news is likely to impact industry investment, which has been dampened in the last 18 months by uncertainty and increased bureaucracy.
“Foreign producers of these derivative articles have increased shipments of such articles to the United States to circumvent the duties on aluminum articles and steel articles,” Trump said.
Derivative aluminum articles will be subject to an additional 10 percent ad valorem rate of duty, while imports of derivative steel articles will face an additional 25 percent ad valorem rate.
Exemptions Announced
Exemption to the new steel tariffs were announced for Argentina, Australia, Brazil, Canada, Mexico and South Korea, while exemption from the additional duties on aluminum derivatives were extended only to Argentina, Australia, Canada and Mexico.
The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962 and have faced opposition from business leaders and economists who claim they are harming U.S. manufacturing sectors.
Research by economic consulting firm Trade Partnership Worldwide suggests that higher commodity prices, resulting from the tariffs, will result in a 0.2 percent reduction in U.S. gross domestic product.
Following shortly after Trump’s Phase 1 deal with China, the signed proclamation issued by the White House suggests that global trade tensions are unlikely to die down in the short term.
“I have concluded that it is necessary and appropriate in light of our national security interests to adjust the tariffs imposed by previous proclamations to apply to the derivatives of aluminum articles and steel articles,” according to Trump’s White House statement.
Foreign Producers Circumvent Duties
The news is likely to impact industry investment, which has been dampened in the last 18 months by uncertainty and increased bureaucracy.
“Foreign producers of these derivative articles have increased shipments of such articles to the United States to circumvent the duties on aluminum articles and steel articles,” Trump said.
Derivative aluminum articles will be subject to an additional 10 percent ad valorem rate of duty, while imports of derivative steel articles will face an additional 25 percent ad valorem rate.
Exemptions Announced
Exemption to the new steel tariffs were announced for Argentina, Australia, Brazil, Canada, Mexico and South Korea, while exemption from the additional duties on aluminum derivatives were extended only to Argentina, Australia, Canada and Mexico.
The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962 and have faced opposition from business leaders and economists who claim they are harming U.S. manufacturing sectors.
Research by economic consulting firm Trade Partnership Worldwide suggests that higher commodity prices, resulting from the tariffs, will result in a 0.2 percent reduction in U.S. gross domestic product.
