Insights
ETCFO Insight: US tariffs on steel, aluminium and impact on global trade
Earlier this month, President Trump issued two Presidential Proclamations imposing additional tariffs of 25% ad valorem (recommended tariff being 24%) on imports of steel and 10% ad valorem (recommended tariff being 7.7%) on imports of aluminum.
These tariffs apply globally with the exception of Canada and Mexico due to the “special circumstances” that exist with these countries and will be effective from the midnight of March 23, 2018.
These tariffs are in addition to the existing (or yet to be imposed) antidumping and countervailing duties or any other charges imposed on the imports of these items.
The reason cited for these impositions is “national security” because of which the US had to resort to section 232 of the Trade Expansion Act, 1962. The rationale behind section 232 is to authorise the President to adjust the imports of an article into the US in such quantities or under such circumstances so as to counter the threat to its national security.
These proclamations find their basis in the reports submitted by the US Department of Commerce (DOC Report), which examined the effect of imports on national security requirements, including domestic production needed for projected national defence requirements; capacity of the domestic industry to meet these requirements and the anticipated availabilities of the human resources.