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U.S. Tariffs on Steel and Aluminum Imports Go into Effect, Leading to Trade Disputes

Extract

Consistent with President Trump's America First trade agenda, his administration imposed tariffs on steel and aluminum imports in early March of 2018, triggering various responses and challenges. Countries have followed through on early objections to the tariffs through retaliatory tariffs and challenges in the World Trade Organization (WTO), and steel importers have challenged the legality of these tariffs under U.S. domestic law. At the same time, these tariffs have been revised multiple times, either to delay the implementation period for certain countries seeking exemptions or to permanently grant exemptions to countries who reached negotiated arrangements with the United States.

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1 Proclamation No. 9704, 83 Fed. Reg. 11,619 (Mar. 8, 2018) [hereinafter Aluminum Tariff].

2 Proclamation No. 9705, 83 Fed. Reg. 11,625 (Mar. 8, 2018) [hereinafter Steel Tariff].

3 19 U.S.C. § 1862 (2012).

4 Id. at § 1862(c)(1)(A). For discussion of the Section 232 determination and of the tariffs as originally enacted, see Jean Galbraith, Contemporary Practice of the United States, 112 AJIL 315, 316–18 (2018).

5 Aluminum Tariff, supra note 1, at 11,621; Steel Tariff, supra note 2, at 11,627.

6 Aluminum Tariff, supra note 1, at 11,620; Steel Tariff, supra note 2, at 11,626.

7 Aluminum Tariff, supra note 1, at 11,620; Steel Tariff, supra note 2, at 11,626.

8 See, e.g., White House Press Release, Readout of President Donald J. Trump's Call with President Mauricio Macri of Argentina (Mar. 9, 2018), at https://www.whitehouse.gov/briefings-statements/readout-president-donald-j-trumps-call-president-mauricio-macri-argentina [https://perma.cc/VWV5-YYRB] (“[T]he two leaders discussed potential United States tariffs on foreign steel and aluminum.”); White House Press Release, Readout of President Donald J. Trump's Call with President Emmanuel Macron of France (Mar. 21, 2018), at https://www.whitehouse.gov/briefings-statements/readout-president-donald-j-trumps-call-president-emmanuel-macron-france-10 [https://perma.cc/HR24-DYMJ] (“The two leaders discussed how the United States and Europe might come together over tariffs.”); Dep't of Commerce Press Release, Joint Statement of U.S. Secretary of Commerce Wilbur Ross and European Commissioner for Trade Cecilia Malmström (Mar. 21, 2018), at https://www.commerce.gov/news/press-releases/2018/03/joint-statement-us-secretary-commerce-wilbur-ross-and-european [https://perma.cc/EV8C-CUTE] (“We have agreed to launch immediately a process of discussion with President Trump and the Trump Administration on trade issues of common concern, including steel and aluminum, with a view to identifying mutually acceptable outcomes as rapidly as possible.”).

9 Proclamation No. 9710, 83 Fed. Reg. 13,355 (Mar. 22, 2018) [hereinafter March 22 Aluminum Extension].

10 Proclamation No. 9711, 83 Fed. Reg. 13,361 (Mar. 22, 2018) [hereinafter March 22 Steel Extension].

11 March 22 Aluminum Extension, supra note 9, at 13,355; March 22 Steel Extension, supra note 10, at 13,361.

12 March 22 Aluminum Extension, supra note 9, at 13,355; March 22 Steel Extension, supra note 10, at 13,361.

13 E.g., March 22 Aluminum Extension, supra note 9, at 13,356 (noting specifically for South Korea that the important security relationship includes “our shared commitment to eliminating the North Korean nuclear threat; our decades old military alliance; our shared commitment to addressing global excess capacity in aluminum production; and our strong economic and strategic partnership”).

14 March 22 Aluminum Extension, supra note 9, at 13,357; March 22 Steel Extension, supra note 10, at 13,363.

15 People's Republic of China Ministry of Commerce Press Release, Spokesman of Ministry of Commerce Comments on China's Decision to Slap Tariffs on Part of Products Imported from US (Apr. 3, 2018), at http://english.mofcom.gov.cn/article/newsrelease/policyreleasing/201804/20180402733539.shtml [https://perma.cc/S7GK-QDGJ] (further claiming a “legitimate right to suspend part of its obligations to the US as a WTO member”); see also People's Republic of China Ministry of Commerce Press Release, The Spokesperson of the Ministry of Commerce Makes Remarks on China's Release of a List of Discontinuation Concessions Against the U.S. Steel and Aluminum Imports Under Section 232 (Mar. 24, 2018), at http://english.mofcom.gov.cn/article/newsrelease/policyreleasing/201803/20180302723376.shtml [https://perma.cc/EWE4-AYB7] (giving notice of this intended action).

16 Off. of the U.S. Trade Rep. Press Release, Joint Statement by the United States Trade Representative Robert E. Lighthizer and Republic of Korea Minister for Trade Hyun Chong Kim (Mar. 28, 2018), at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/march/joint-statement-united-states-trade [https://perma.cc/QF8J-AYZ6].

17 Republic of Korea Ministry of Trade, Industry and Energy Press Release, Korea, US Reach Agreement on Trade Deal and Steel Tariff Exemption (Mar. 26, 2018), at http://english.motie.go.kr/en/pc/photonews/bbs/bbsList.do?bbs_cd_n=1&bbs_seq_n=678 [https://perma.cc/AUS2-L6L8]. This agreement was negotiated simultaneously with a successful renegotiation of the United States–Republic of Korea Free Trade Agreement (KORUS). Id. While these resolutions have reduced trade tensions between the United States and South Korea, some issues remain, as two requests for consultations brought in the WTO in May 2018 by South Korea demonstrate. See WTO Press Release, Korea Initiates WTO Dispute Complaints against US Safeguard Duties on Washers, Solar Cells (May 16, 2018), at https://www.wto.org/english/news_e/news18_e/ds545_546rfc_16may18_e.htm.

18 Proclamation No. 9739, 83 Fed. Reg. 20,677 (Apr. 30, 2018) [hereinafter April 30 Aluminum Extension].

19 Proclamation No. 9740, 83 Fed. Reg. 20,683 (Apr. 30, 2018) [hereinafter April 30 Steel Extension].

20 April 30 Aluminum Extension, supra note 18, at 20,677; April 30 Steel Extension, supra note 19, at 20,684. Proclamation 9740 additionally implemented the tariff waiver struck with South Korea, exempting South Korea from the steel tariff but noting that “[t]he United States will monitor the implementation and effectiveness of the [steel] quota and other measures agreed upon with South Korea in addressing our national security needs, and [Trump] may revisit this [exemption], as appropriate.” April 30 Steel Extension, supra note 19, at 20,684.

21 White House Press Release, President Donald J. Trump Approves Section 232 Tariff Modifications (Apr. 30, 2018), at https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-approves-section-232-tariff-modifications [https://perma.cc/HW65-B7RP] (“In all of these negotiations, the Administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security.”).

22 Government Celebrates Exemption from US Steel and Aluminum Tariffs, Buenos Aires Times (May 5, 2018), at http://www.batimes.com.ar/news/economy/government-celebrates-exemption-from-us-steel-and-aluminium-tariffs.phtml (noting Argentina's acceptance of a 180,000 ton quota for both steel and aluminum); Bruno Federowski & Alberto Alerigi, U.S. Cuts off Brazil Tariff Talks, Adopts Steep Import Quotas, Reuters (May 2, 2018), at https://www.reuters.com/article/us-usa-trade-brazil/us-cuts-off-brazil-tariff-talks-adopts-steel-import-quotas-idUSKBN1I31ZD (stating that Brazil had arranged for a 3.5 million ton quota for steel but had accepted the 10% tariff on aluminum).

23 Paul Karp, Australia Rejects Fears Trump Steel Tariff Exemption Subject to Quotas, Guardian (May 1, 2018), at https://www.theguardian.com/australia-news/2018/may/02/australia-rejects-fears-trump-steel-tariff-exemption-subject-to-quotas.

24 April 30 Aluminum Extension, supra note 18, at 20,678; April 30 Steel Extension, supra note 19, at 20,684.

25 Proclamation No. 9759, 83 Fed. Reg. 25,857 (May 31, 2018) [hereinafter May 31 Steel Proclamation].

26 Proclamation No. 9758, 83 Fed. Reg. 25,849 (May 31, 2018) [hereinafter May 31 Aluminum Proclamation].

27 May 31 Steel Proclamation, supra note 25, at 25,857; May 31 Aluminum Proclamation, supra note 26, at 25,849. While the proclamations specified new quotas for Argentina and, with respect to steel, for Brazil, they did not identify any quotas for Australia. See May 31 Steel Proclamation, supra note 25, at 25,858–59; May 31 Aluminum Proclamation, supra note 26, at 25,851.

28 See May 31 Steel Proclamation, supra note 25, at 25,858; May 31 Aluminum Proclamation, supra note 26, at 25,850 (both “maintain[ing] the current tariff level as it applies to other countries”); see also David J. Lynch, Josh Dawsey & Damian Paletta, Trump Imposes Steel and Aluminum Tariffs on the E.U., Canada, and Mexico, Wash. Post (May 31, 2018), at https://www.washingtonpost.com/business/economy/trump-imposes-steel-and-aluminum-tariffs-on-the-european-union-canada-and-mexico/2018/05/31/891bb452-64d3-11e8-a69c-b944de66d9e7_story.html?utm_term=.9001549fb075 (reporting on this issue).

29 See David Lawder, Canada Sees Progress on NAFTA Auto Rules; Steel Tariffs Loom, Reuters (Apr. 25, 2018), at https://www.reuters.com/article/us-trade-nafta/canada-sees-progress-on-nafta-auto-rules-steel-tariffs-loom-idUSKBN1HW2R8 (reporting that Mexico's negotiators are “unhappy about having to deal with the steel tariff threat in parallel with the NAFTA negotiations,” and that Canada remains opposed to the tariffs, feeling that they should have a “full and permanent exemption from any quotas or tariffs” (internal quotation marks omitted)).

30 European Commission Press Release, Commission Statement Following US Announcement of an Extension Until 1 June of the EU's Exemption from US Tariffs on Steel and Aluminum Imports (May 1, 2018), at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1839&title=Commission-statement-following-US-announcement-of-an-extension-until-1-June-of-the-EUs-exemption-from-US-tariffs-on-steel-and-aluminium-imports [https://perma.cc/JPB7-H76M].

31 Lynch, Dawsey & Paletta, supra note 28.

32 See Jean Galbraith, Contemporary Practice of the United States, 112 AJIL 505 (2018).

33 Request for Consultations by China, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. G/L1222; G/SG/D50/1; WT/DS544/1 (Apr. 5, 2018) hereinafter China Section 232 Request for Consultations.

34 Id.

35 Id. at 2 (citing Article II:1(a) & (b) and Article I:1, respectively, and also raising a claim under Article X:3 “because the United States has failed to administer its laws … in a uniform, impartial, and reasonable manner”).

36 Id.

37 Id.

38 Communication from the United States, United States–Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/2 (Apr. 13, 2018).

39 Id.

40 Id. Article 8.2 allows states to respond to safeguard measures by “the application of substantially equivalent concessions or other measures” if “no agreement is reached within 30 days in the consultations” and subject to a notice requirement. Agreement on Safeguards, Art. 1, April 15, 1994, 1869 UNTS 154, 157.

41 Request to Join Consultations—Communication from India, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/3 (Apr. 17, 2018); Request to Join Consultations—Communication from Thailand, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/5 (Apr. 18, 2018); Request to Join Consultations—Communication from the Russian Federation, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/4 (Apr. 18, 2018); Request to Join Consultations—Communication from the European Union, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/7 (Apr. 19, 2018); Request to Join Consultations—Communication from Hong Kong, China, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS544/6 (Apr. 19, 2018).

42 Request for Consultations by Mexico, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS551/1 (June 5, 2018); Request for Consultations by Canada, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS550/1 (June 1, 2018); Request for Consultations by the European Union, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS548/1 (June 1, 2018); Request for Consultations by India, United States—Certain Measures on Steel and Aluminum Products, WTO Doc. WT/DS547/1 (May 18, 2018). Various countries have requested to join these consultations.

43 Complaint, Severstal Export GMBH v. United States of America (No. 18-00057) (U.S. Ct. Int'l Trade Mar. 22, 2018).

44 Id. at 1.

45 Id.; see also Todd N. Tucker, First Case Filed Against Administration's National Security Motivated Tariffs, Lawfare (Apr. 6, 2018), at https://www.lawfareblog.com/first-case-filed-against-administrations-national-security-motivated-tariffs (discussing the case and subsequent developments).

46 U.S. Dep't of Commerce Press Release, U.S. Department of Commerce Initiates Section 232 Investigation into Auto Imports (May 23, 2018), at https://www.commerce.gov/news/press-releases/2018/05/us-department-commerce-initiates-section-232-investigation-auto-imports [https://perma.cc/A8XL-M79N]; see also White House Press Release, Statement from the President on Potential National Security Investigation into Automobile Imports (May 23, 2018), at https://www.whitehouse.gov/briefings-statements/statement-president-potential-national-security-investigation-automobile-imports [https://perma.cc/JL6S-RRHU].

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