New Process to Expand Section 232 Tariffs on Derivative Steel and Aluminum Products
The Department of Commerce’s Bureau of Industry and Security (BIS) published an interim final rule establishing a new process for requesting the inclusion of additional derivative aluminum and steel articles under these tariffs. This process replaces the previous exclusions framework and allows domestic producers of steel, aluminum, or derivative articles or trade associations representing them to submit requests during three annual submission windows in May, September, and January. Requests must demonstrate that specific derivative imports have increased in a way that threatens national security or undermines prior Section 232 findings. BIS will review each submission within 60 days, and this period will include a 14-day window for public comments on the submissions through a transparent, structured process. This shift reflects the administration’s broader national security concerns tied to the U.S. defense industrial base and the urgency of protecting domestic production capacity. BIS is accepting comments on this new process for 45 days from when it is published in the Federal Register.
Tariff Overlap Addressed in Executive Order
President Donald Trump issued an executive order regarding the prevention of stacking overlapping tariffs on certain imported articles when multiple tariffs are imposed under separate authorities. It establishes clear rules for which tariffs will apply when an article falls under more than one of the outlined designated tariff actions, ensuring that only one applies in certain cases to avoid excessive duties. The executive order does not change the validity or enforceability of the listed tariff actions but clarifies that non-listed tariffs may still be applied in addition to those addressed. Changes will go into place retroactively effective March 4th, 2025.
EU Prepares Concessions and Tariff Threats in Dual-Track Strategy
The European Commission has outlined a two-pronged strategy to EU member states as it prepares for high-stakes trade negotiations with the Trump Administration. This includes a list of potential concessions, such as increased energy investments and regulatory easing, as well as a new set of retaliatory tariffs if talks break down. The aim is to present a united front and apply pressure on Washington while keeping the EU’s 27 countries aligned during the 90-day pause in U.S. tariff action. Despite internal divisions and calls from some member states like France for broader retaliation, including against U.S. services, the Commission has opted for a more traditional response focused on goods. EU leaders, including Macron and von der Leyen, are expected to further discuss strategy next week.
Update on Auto Tariffs
President Trump eased the impact of his 25% auto tariffs by issuing an executive order that offers domestic automakers credits and relief from other levies to encourage the onshoring of supply chains. Automakers can receive credits worth up to 15% of a vehicle's value to offset imported parts, with duty-free imports phased down over three years. Parts subject to the auto tariffs are now exempt from overlapping tariffs on steel, aluminum, and goods from Canada and Mexico, though Chinese parts remain fully subject to steep duties. This move aims to balance protectionist trade goals with industry concerns and economic stability, especially in key states like Michigan.
Canada Ushers in New Leadership
President Donald Trump called Canadian Prime Minister Mark Carney to congratulate him on his election victory, and both leaders agreed to meet soon to discuss the future of U.S.-Canada relations. Carney’s win over Conservative leader Pierre Poilievre was fueled in part by backlash to Trump’s aggressive trade policies, including auto tariffs and broader economic pressure. In his victory speech, Carney emphasized a shift away from deep integration with the U.S., signaling a new, more guarded bilateral approach. Their upcoming meeting is expected to address economic and security issues amid ongoing U.S. trade threats, though details remain unconfirmed.
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Are you concerned about the impacts of the outlined trade issues? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at sarah.helton@michaelbest.com for assistance.