New Tariffs and Talk of Trade War

“Trade War” makes a good headline. It’s both eye-catching and stress-inducing, especially for US importers.

We’re taking a moment to go beyond the headlines and dig into the facts, letting our international experts offer advice on what to expect and how to prepare for changes in the world market.

The facts:

  • Effective March 23, the Trump administration imposed a 25% tariff on imported steel and a 10% tariff on imported aluminum.
  • Argentina, Australia, Brazil, Canada, Mexico and European Union member countries are currently exempt from the steel and aluminum tariffs.
  • On April 3, the administration announced additional 25% tariffs on more than 1,300 Chinese products, including flat-screen televisions, medical devices, aircraft parts and batteries – totaling around $50 billion.
  • On April 4, China responded by threatening to impose tariffs of its own on 106 US products, including soybeans, cars and airplanes – also totaling about $50 billion.
  • No enforcement dates have been announced for when the tariffs from either side will go into effect.
  • US companies have until May 11 to submit written comments to the Office of the US Trade Representative regarding the proposed affected tariffs.

The history

In 2002, the Bush administration imposed steel tariffs up to 30% on imported steel, but withdrew them over a year later after pushback from the automotive and construction industries as well as the World Trade Organization and the European Union. We’re not saying that history will repeat itself during the current administration so it’s best to prepare your supply chain for the increased cost if you deal in steel or aluminum.

On the bright side

Some good news in today’s uncertain world market, in late March, President Trump signed the “Consolidated Appropriations Act, 2018” into law, which included renewal of the Generalized System of Preferences (GSP) through the end of 2020 with retroactivity from January 1, 2018. The GSP is a US trade program that provides preferential duty-free entry for up to 4,800 products from 129 designated developing countries and territories. Since it expired at the end of 2017, importers have been forced to pay tariffs they previously didn’t have to.

How to prepare

Importers should prepare by reviewing the classification (tariff numbers) of their imported products.

AFS can provide help to identify affected tariffs and advise the best resources for the most current status of the world market. AFS can also provide the complete schedule for submitting comments, recommended submission methods and referrals to experienced trade attorneys who assist with exemption case filings and drafting feedback.

If you’re worried you may be affected and want to get a jump start on your preparations, feel free to reach out to our team of international experts by email at [email protected] or 877-242-3383.



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