1. Context & Legal Foundation
IFFCBANO
2018 Int’l Trade Symposium
US Trade Actions
Context & Legal Foundation
Edward T. Hayes, Esq.
Leake & Andersson L.L.P.
1100 Poydras Street, Suite 1700
New Orleans, LA 70163

2. US Trade Actions-Context
President Trump—changing course of US trade policy
Reciprocity & Trade Deficit main themes
US is most open/transparent market in the world
Prior US trade policy—market opening and non-tariff barriers
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3. US Trade Actions-Context
Now redrawing agreements and clawing back concessions in two areas
International: NAFTA, WTO & FTAs (KORUS)
Domestic focus: US trade laws allowing unilateral action
Department of Commerce AD/CVD Self Initiation (alloy aluminum sheet from China)
Current focus on actions under Sections 232 and 301 of Trade Laws
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4. Section 232- Steel & Aluminum Tariffs
Section 232 (Trade & Expansion Act of 1962): If DOC “finds that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security. . . “
President may take actions deemed necessary to adjust imports
1980 President Carter imposed fee on imported oil
Department of Commerce ruled that imports of steel & aluminum impairing US national security
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5. Section 232 Steel & Aluminum Tariffs
March 8, 2018 President Trump imposed 25% tariff on steel imports and 10% on aluminum products
Collections began March 23, 2018
Target Steel Products:
USHTS 7201: Primary Materials in Granular or Powder
USHTS 7206: Iron and Nonalloy Steel
USHTS 7218: Stainless Steel
USHTS 7224: Other Alloy and Nonalloy Steel Bars & Rods
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6. Section 232 Steel & Aluminum Tariffs
Target Aluminum Products:
USHTS 7601: Unwrought Aluminum
USHTS 7604: Bar, Rods and Profiles
USHTS 7605: Wire
USHTS 7606 & 7607: Plate, Sheet, Strip, and Foil (flat rolled)
USHTS 7608 & 7609: Tubes and Pipes (plus pipe fitting)
USHTS & : Castings and Forgings
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7. Section 232 Steel & Aluminum Tariffs
Country exclusions: NAFTA & EU (temporary); Australia, Argentina, South Korea & Brazil
Product exclusions allowed through administrative process at Department of Commerce (8,000 requests)
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8. Section 232 Steel & Aluminum Tariffs
China retaliation notified to WTO on March 29, 2018
Target agricultural goods in politically sensitive areas
Fresh Fruits, Dried Fruits & Nuts (15%)
Grape Wine (15%)
Iron and Steel Tubes and Pipes (15%)
Pork Meat (25%)
Already enacting non-tariff retaliation-100% inspections of US fresh fruit causing delays
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9. Section 232 Steel & Aluminum Tariffs
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10. Section 232 Steel & Aluminum Tariffs
China initiated WTO dispute settlement alleging action violates WTO Safeguards Agreement
US asserts National Security Exception-Article XXI
WTO members may take any action “necessary for the protection of its essential security interests . . .”
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11. Section 301-China Intellectual Property
Section 301-President may modify tariff rates where: (1) US rights under a trade agreement denied; or
(2) act, policy or practice of foreign country [a] violates a trade agreement, or [b] unjustifiably burdens or restricts US commerce
USTR report & Presidential Memo (March 28, 2018)
China’s practices: (1)forced technology transfer; (2) restrictive licensing terms; (3)direct US investment to obtain important US technology; and (4) direct IP theft
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12. Section 301-China Intellectual Property
USTR list of proposed tariffs published April 6, 2018
Public hearing on May 15, 2018
Proposed list imposes 25% tariff on 1,300 separate tariff lines seeking $50 billion in offsets
Primarily target products benefitting from Chinese industrial policies (chemicals, steel and aluminum products, engines, ag machinery, electronics, marine equipment)
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13. Section 301-China Intellectual Property
China announced proposed retaliation of 25% tariff on US soybean, airplane and automobile exports (matching equivalent $50 billion number)
US launched WTO dispute settlement case on China policies
US and China engaged in talks for bilateral solution
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14. Conclusions Trade actions part of course change by President Trump
View tariffs and new trade policy as part of business’ political and economic risk assessment
Diversity in supply chains and markets critical now more than ever
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