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U.S., Canada, Mexico to Terminate Steel and Aluminum Tariffs

Monday, May 20, 2019
Sandler, Travis & Rosenberg Trade Report

The U.S. announced May 17 that it will eliminate all section 232 tariffs on steel and aluminum products from Canada and Mexico, which in turn will remove all retaliatory tariffs on U.S. goods. However, tariffs could be reimposed if imports of these products surge.

The U.S. imposed section 232 tariffs of 25 percent on steel and 10 percent on aluminum products imported from Canada and Mexico as of June 1, 2018. Those two countries responded with retaliatory tariffs on goods imported from the U.S. (Click here for ST&R’s web page providing full details.)

To address the problems underlying the decision to impose these tariffs, which largely have to do with the growth of production in and exports from China, a joint statement said the U.S. and Canada have agreed to implement effective measures to prevent (a) the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices and (b) the transshipment of aluminum and steel made outside of the U.S. or Canada to the other.

In addition, the statement said, a process will be established for monitoring U.S.-Canada trade in steel and aluminum products. If imports surge meaningfully beyond historic volumes over a period of time (which was not defined), the importing country may request consultations with the exporting country. After such consultations, the importing party may impose duties of 25 percent for steel and 10 percent for aluminum with respect to the individual product(s) where the surge took place. If such measures are imposed, the exporting country agrees to retaliate only in the affected sector.

Although no official notice from Mexico was available at press time, press sources indicate that the terms above will apply to U.S.-Mexico trade in steel and aluminum products as well.

For more information on section 232 tariffs on these and other products and how they may affect your business, please contact trade consultant Nicole Bivens Collinson at (202) 730-4956 or trade attorney Kristen Smith at (202) 730-4965.

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