Trump’s steel and aluminium tariff action: Putting America first?
On 8 March 2018, United States President Donald Trump issued two presidential proclamations. These would apply special duties – 25% and 10% respectively – on the imports of hundreds of different steel and aluminium tariff lines imported into the United States after 23 March 2018, for an indefinite period. The aim of this action was to offer support to the domestic steel and aluminium manufacturing sectors: by providing incentives to increase the sectors’ utilization of available productive capacity, ensuring greater long-term sustainability, and ultimately – yet crucially – to serve the US security.
This executive action was based on rarely used US trade legislation originally enacted in 1962, albeit with other primary objectives in mind at the time (strengthening economic relations through the development of open and non-discriminatory trading in the free world, stimulating economic growth, etc.). However this legislation also allowed so-called Section 232 investigations under certain circumstances relating to ‘national security’ considerations; and this then potentially granted the President the executive authority to limit the importation of certain goods into the US. Prior to the recently completed 2017-2018 steel and aluminium investigations, Section 232 investigations previously took place in 1999 (crude oil) and 2001 (iron ore and semi-finished steel), and neither recommended or was used for any curtailment of imports.
This paper presents an overview of the steel and aluminium ‘situation’ as it currently is, notwithstanding that it remains fluid in terms of policy and other ongoing developments, and that the nature and detail of the remedial and associated action may change over the coming weeks and months. This paper includes an overview of the recently published trade policy agenda to provide additional policy context, background developments to the steel and aluminium remedies, an overview of the legislative context and specifically the Section 232 investigation, as well as its key findings relating to steel and aluminium, details of the remedial action articulated through various presidential proclamations, and a review of trade patterns in categories covered by this remedial action (including how AGOA beneficiaries are impacted).
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