Posted on 30 Mar 2020
Metal industry organizations renewed the debate this week over the enforcement of Section 232 steel and aluminum tariffs after the US Customs and Border Protection said March 20, through its Cargo Systems Messaging Service, that it would consider delaying payments of estimated duties and taxes on imports in response to the economic severity caused by the COVID-19 pandemic.
The Aluminum Association said Friday in an email to members that it "continues to favor the removal of Section 232 aluminum tariffs on all market economy countries" in response to the CBP's announcement, which sparked speculation that the Trump administration may soften tariff regulations.
Similarly, the Coalition of American Metal Manufacturers and Users requested Wednesday that the Trump administration immediately terminate the Section 232 steel and aluminum tariffs to aid US manufacturers facing economic pressure caused by the COVID-19 pandemic.
"Many steel- and aluminum-using manufacturers are supplying parts to the medical equipment industry and other essential sectors, and the US government should be doing everything in its power to help them instead of needlessly taxing their operations with tariffs," CAMMU said in a statement.
CAMMU added that the tariffs, originally implemented by the Trump administration in March 2018, have hurt steel and aluminum manufacturers and consumers in the US even before the onset of the pandemic.
Earlier this month, Alcoa spokesperson Jim Beck reiterated the company's stance against the 10% Section 232 tariffs on aluminum.
"We do not believe that tariffs are the answer to solve what ills the aluminum industry," Beck said. "The primary overarching problem is Chinese overcapacity, and we have said that repeatedly even when the 232 came out."
The American Primary Aluminum Association on Thursday urged CBP to avoid tariff relief measures that would allow duty payment extensions and other flexibility mechanisms to defer or avoid payments.
"On behalf of America's primary aluminum producers, we urge CPB not to implement policies that will undermine the Section 232 tariff program and harm American aluminum workers," APAA CEO Mark Duffy said in a letter to CBP, adding how the easing of tariffs will allow importers to "game the system" with import surges that pose a clear and present danger to US interests.
Century Aluminum applauded President Donald Trump's implementation of the Section 232 tariffs when they were implemented. A representative for Century declined to comment on the tariffs Friday but referred to the statements made in the APAA letter.
Century is a program partner of the APAA.
Steel industry advocates this week responded to CBP's announcement with statements favoring the continued enforcement of Section 232 tariffs.
In a letter sent to acting CBP commissioner Mark Morgan on Tuesday night, several steel industry organizations urged CBP to "not allow this crisis to encourage bad actors from taking advantage of an at-risk system during this crisis period."
"Any efforts to delay or reduce the collection of duties on unfairly traded steel imports or imports that threaten to impair US national and economic security will ultimately hurt US workers and businesses during this unprecedented moment," the letter said.
The letter was sent on behalf of the American Iron and Steel Institute, Steel Manufacturers Association, Specialty Steel Industry of North America, The Committee on Pipe and Tube Imports and American Institute of Steel Construction.
United Steelworkers echoed the call for the sustained, strict enforcement of trade rules during the COVID-19 crisis.
"The USW strongly urges Congress and the administration to not undermine existing trade enforcement authorities such as 301, 232 or traditional antidumping and countervailing duty orders," USW International President Thomas Conway said in a statement Thursday. "Measures such as the Section 232 tariffs on steel and aluminum have provided American workers and manufacturers with stability, and relaxing enforcement of such duties during this crisis would take that away when it is most needed."
Despite calls for tariff relief, the White House has continued to deny any intention of modifying the Section 232 tariffs.
Nithya Nagarajan, partner and trade counsel at Husch Blackwell, said the Trump administration was unlikely to make any changes.
"Given the consistent way that the executive branch has operated over the last several years with respect to tariffs, there's not going to be an immediate change to any of this," Nagarajan said. "The negotiation with China on Phase 2 of the trade deal, depending on how that goes, that is going to be indicative as to whether or not there is going to be a relief and a refocus on the 232."
In an interview Wednesday with CNBC, Chris Krueger, managing director of Cowen Washington Research Group, said the removal of tariffs on steel and aluminum by the US government would be one option to help manufacturers or counteract potential backlash from China from measures included in the $2 trillion coronavirus stimulus legislation.
"Just as you brought up US and China, in terms of unilateral options that the administration has left, the only really big one would be tariff relief on both steel and aluminum tariffs, as well as the 301 tariffs on China," Krueger said. "Thus far, the administration has basically said 'no chance.'"
Trump reinforced his favorable stance on the tariff programs, specifically regarding steel imports, during a news conference Thursday.
"We have very strong tariffs on dumping steel, and we don't like steel coming through our border that's been dumped in Canada so they can avoid the tariff," Trump said. "You know, I charge a lot of tariff for the steel, and it's been great for our steel companies."
Following Trump's comments, CBP issued a new statement Thursday limiting its original March 20 proposal to delay tariff payments.
"The purpose of this message is to notify the trade community that CBP is no longer accepting requests for additional days for payment and to provide guidance to brokers, importers and sureties on processing the universe of entries affected by the previous message," CBP said, in reference to the March 20 announcement.
Source:S&P Global Platts
