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Safeguard Tariffs on Steel and Aluminium Expanded to Cover Various Derivative Articles

President Trump issued a proclamation on 24 January expanding the scope of the current safeguard tariffs on steel and aluminium to cover a range of derivative steel and aluminium articles. As a result, these articles will face additional tariffs of 25 percent (steel) and 10 percent (aluminium) from 8 February. This action excludes derivative aluminium products from Argentina, Australia, Canada and Mexico as well as derivative steel products from Argentina, Australia, Brazil, Canada, Mexico and South Korea.

While a list of specific tariff lines subject to this action had not been released as of 27 January, the proclamation indicates that it will cover (1) steel nails, tacks, drawing pins, corrugated nails, staples and similar derivative articles; (2) aluminium stranded wire, cables, plaited bands and the like (including slings and similar derivative articles); and (3) bumper and body stampings of aluminium and steel for motor vehicles and tractors. According to the proclamation, for purposes of this action an article is considered to be a derivative steel or aluminium article if all of the following conditions are present:

  • the aluminium or steel article represents, on average, two-thirds or more of the total cost of materials of the derivative article;
  • import volumes of such derivative article increased year-to-year since 1 June 2018 following the imposition of the steel and aluminium safeguard tariffs in comparison to import volumes of such derivative article during the two preceding years; and
  • import volumes of such derivative article following the imposition of the tariffs exceeded the four percent average increase in the total volume of goods imported into the United States during the same period since 1 June 2018.  

The proclamation asserts that during June 2018-May 2019 import volumes of steel nails, tacks, drawing pins, corrugated nails, staples and similar derivative articles increased by 33 percent compared to June 2017-May 2018 as well as 29 percent compared to June 2016-May 2017. From January to November 2019 import volumes of such articles increased by 23 percent compared to the same period in 2017.

Similarly, during June 2018-May 2019 import volumes of aluminium stranded wire, cables, plaited bands and the like increased by 152 percent compared to June 2017-May 2018 as well as 52 percent compared to June 2016-May 2017. From January to November 2019 import volumes of such articles increased by 127 percent from the same period in 2017. Finally, during June 2018-May 2019 import volumes of bumper and body stampings of aluminium and steel for motor vehicles and tractors increased by 38 percent from June 2017-May 2018 as well as 56 percent from June 2016-May 2017. And from January 2019 to November 2019 import volumes of such articles increased by 37 percent compared to the same period in 2017.

The proclamation contends that foreign producers of these derivatives articles have increased their shipments in order to circumvent the safeguard duties in place on steel and aluminium articles and that such imports of derivative articles threaten to undermine the actions taken to address U.S. national security risks.

The U.S. Department of Commerce has been authorised to establish a process for requesting exclusions from these expanded tariffs (i) for any derivative article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, and (ii) based on specific national security considerations.  Exclusion requests may only be made by directly affected parties located in the United States. Any exclusions granted will be retroactive to the date the request was accepted by the DOC.

Content provided by Picture: HKTDC Research
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