Effective August 16, 2020, the United States re-imposed the Section 232 10% ad valorem additional duty on imports of non-alloyed unwrought aluminum from Canada.
The Section 232 steel and aluminum tariffs were originally recommended in 2018 with “increased pressure on Mexico and Canada” to push discussions in the new United States-Mexico-Canada Agreement (USMCA) which entered into force on July 1, 2020. Mexico and Canada actually both ended up exempt from the tax with the agreement that imports of steel and aluminum from the two countries would carry on at historical levels.
However, according to the United States Trade Representative (USTR), “Since the President exempted Canada [on May 17, 2019], imports from Canada of the product that accounts for the largest share of Canada’s aluminum exports to the United States have surged above historical levels. The surge has intensified in recent months, despite a contraction in U.S. demand. To ensure the continued integrity and effectiveness of the national security measures the President adopted under Section 232, the United States has re-imposed a tariff on the surging imports, as provided for in our agreement with Canada.”
The American Journal of Transportation, states “The decision comes more than a month after U.S. Trade Representative Robert Lighthizer expressed concern about recent struggles by American aluminum producers, who have said they are hurting from a ‘surge’ of metal from Canada flowing into the U.S.” The article goes on to state, “In response to the American tariffs, Canada intends to swiftly impose dollar-for-dollar countermeasures,” Deputy Prime Minister Chrystia Freeland said in a statement, calling the U.S tariffs “unwarranted and unacceptable.”
Time to Petition
Companies that are affected from this decision are still able to petition for an exclusion from this tariff as in the past. It is also good to note that no duty drawback is allowed for Section 232 tariffs.
Canada Strikes Back
One day after the U.S. announcement mentioned above, Canada’s Department of Finance announced, “In response to these measures and in accordance with the May 2019 Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum, Canada intends to impose surtaxes against imports of aluminum and aluminum-containing products from the U.S., representing a proportionate amount of Canadian aluminum products affected by the U.S. tariffs.” The new Canadian tariffs on U.S. origin goods will go into effect on September 16, 2020 and will remain in place until the U.S. eliminates its tariffs against Canada. To view more details, visit Department of Finance (Canada).
Scarbrough Consulting, Inc.’s team of global trade experts and Licensed U.S. Customs brokers is known for its expertise in global supply chain and finding ways importers and exporters can mitigate costs, lower risk and add to their bottom line. Product exclusions have been a big core of our requests and we are happy to help. Please email firstname.lastname@example.org or fill out the form below for a free 20-minute consultation.
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