capital report: june 5, 2018

Steel and Aluminum 232 Tariffs Hit Canada, Mexico and the EU

Last Thursday, May 31, the Trump Administration announced that it would end Section 232 tariff exemptions on steel and aluminum imports from Canada, Mexico and the European Union. Effective June 1, steel and aluminum imports from these countries would be subject to a 25 percent and 10 percent tariff, respectively. Canada, Mexico and members of the EU have reacted strongly against the tariffs, and have announced plans to retaliate with their own tariffs against American products. Please check the Auto Care Association’s resource page for additional information on retaliatory actions.

As previously reported, these actions are the result of an investigation conducted by the U.S. Department of Commerce as part of Section 232 of the Trade Expansion Act of 1962, which ensures that industries and products critical to national security are not seriously damaged or destroyed by imports. The report can be found  here.

Product Exclusion Process - Commerce published an  interim rule detailing the process for how parties may submit requests or objections for product exclusions if the product is “determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality or based upon national security considerations.” More than 11,000 requests and comments have been filed thus far.

Details on how to file for an exclusion can be found on Commerce’s  steel and  aluminum information page or on Auto Care’s  resource page.


Trump Administration Launches Section 232 Investigation into Auto Imports

On May 23, President Trump instructed Secretary of Commerce Wilbur Ross to initiate a Section 232 investigation to determine if the imports into the U.S. of automobiles, including SUVs, vans and light trucks, and automotive parts, threaten to impair national security.

According to Secretary Ross’ statement, imports of passenger vehicles have grown from 32 percent to 48 percent in the past 20 years, and U.S. employment in motor vehicle production declined by 22 percent from 1990 to 2017. A Wall Street Journal article indicates that the president is considering imposing tariffs as high as 25 percent.

Important dates:

  • June 22 - Due date for written comments, requests to appear at the hearing and a summary of expected testimony
  • July 6 - Due date for rebuttal comments
  • July 19 - 20 - Public hearing at the Department of Commerce (Washington, D.C.)

The Federal Register notice outlines a comment and hearing process for interested parties to submit/present information pertinent to the investigation.

The Department of Commerce will recommend actions if it is determined that automobiles and/or automotive parts are being imported into the U.S. in quantities that threaten to impair national security.

The Auto Care Association is seeking input and data on how imports of automobiles and automotive parts impacts your business and your customers. Please contact Aaron Lowe and Paul Fiore if you wish to provide information the association’s submission.


China 301 Tariffs List will be Announced by June 15

President Trump announcedlast Tuesday, May 29, that following its Section 301 investigation, the U.S. will be moving forward with protecting domestic technology and intellectual property from unfair trade practices by imposing tariffs on Chinese goods.

The announcement reads: "The United States will impose a 25 percent tariff on $50 billion of goods imported from China containing industrially significant technology, including those related to the ‘Made in China 2025’ program. The final list of covered imports will be announced by June 15, 2018, and tariffs will be imposed on those imports shortly thereafter."

The administration will also "implement specific investment restrictions and enhanced export controls for Chinese persons and entities related to the acquisition of industrially significant technology" and "continue to pursue litigation at the World Trade Organization."

The statement comes a little more than a week after the issuance of a joint U.S.-China statement and U.S. Treasury Secretary Mnuchin's  announcement that the administration would be “putting the trade war on hold” and suspending plans to impose tariffs on goods imported from China. U.S. Commerce Secretary Ross is scheduled to continue trade negotiations in China this week.

Last month, the Auto Care Association submitted comments and testified before the Office of the U.S. Trade Representative regarding the impact of the proposed Section 301 actions on the auto care industry.


Webinar: Navigating Trump’s Trade Agenda

The Auto Care Association’s Manufacturers’ Reps Council is hosting a one-hour teleforum on June 8 at 11:30 a.m. ET to discuss the Trump administration’s trade policy agenda and its potential impact on the auto care industry.

The teleforum, “Navigating Trump’s Trade Agenda: A Briefing on Steel and Aluminum Tariffs, Proposed China Tariffs and NAFTA Negotiations,” will include:

  • An overview of tariffs on steel and aluminum imports, and where we go from here;
  • Section 232 Auto Import investigation;
  • Discussion on the proposed China tariffs, including the current status and process moving forward; and
  • An update on the NAFTA negotiation and next steps.

With the potential for major changes to import regulations, it is more critical than ever for auto care executives to understand and begin planning for these trade actions that are currently being implemented and that are being proposed by the administration.

Register here.


Get the Latest Coverage of the 2018 Elections

Thanks to support from the Auto Care Political Action Committee ( ACPAC), we are pleased to bring Capital Report readers the latest  Inside Elections with Nathan Gonzalez, a bi-monthly nonpartisan analysis of U.S. elections.

Read the latest issue  here.

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