SEMA eNews Vol. 21, No. 18, May 3, 2018

President Trump Delays Steel Tariff Decision on Country Exemptions Until June 1

By SEMA Washington, D.C., Staff

On March 23, 2018, the U.S. government imposed global tariffs on steel (25%) and aluminum (10%). U.S.-allied countries may seek an exemption if they can demonstrate fair trade practices. The deadline for reaching an agreement on what constitutes such practices was May 1, but President Trump extended the deadline to June 1. South Korea has reached an accord, and Argentina, Australia and Brazil are reportedly nearing agreement. An accord with Canada and Mexico is tied to a renegotiated North American Free Trade Agreement (NAFTA). The temporary exemption also applies to the European Union, but not to Japan, which is currently subject to the tariffs.

The tariffs apply to processed raw materials (steel/aluminum plate, sheets, bars, etc.), but not finished products (e.g., wheels, exhausts, etc.). At issue is excess global metal production that has reduced prices and resulted in the closure of many U.S. factories. The government estimates that U.S. steel mills are operating at 73% of capacity, and more than half of U.S. aluminum capacity is dormant. Among other factors, the U.S. government contends China built too many factories and is over-producing. Some countries and non-U.S. companies are also dumping/subsidizing the product (selling below market price in the United States). 

U.S.-based companies are eligible for a one-year tariff exclusion if they can demonstrate that the foreign-produced material is not made in the United States in reasonably available quantity or satisfactory quality. More than 4,000 company exclusion requests have been received to date. 

File an exclusion request for steel or aluminum.  

If you have any questions, please contact Stuart Gosswein at stuartg@sema.org.

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