May ’22 at-a-glance … taxes, tariffs & trade

USTR begins sunset review of Section 301 tariffs

The U.S. Trade Representative (USTR) has begun the mandatory review of Lists 1 and 2 of the Section 301 tariffs that are set to expire in July to determine if they should remain in effect. The two-stage review includes soliciting feedback from the domestic industry and a full government analysis. NAFEM and other members of Americans for Free Trade (AFT) wrote    to USTR Katherine Tai asking that the agency review all four tariff lists to determine whether the tariffs represent the best path forward.

Efforts continue to reinstate Section 301 exclusion process

Patrick Toomey’s (R-PA) Motion to Instruct Senate conferees to include a Section 301 exclusion process in final legislation that harmonizes the United States Innovation and Competition Act (USICA) and the America COMPETES Act of 2022 passed. The provision instructs those on the conference committee to reestablish the exclusion process for current and future Section 301 tariffs that lapsed Dec. 31, 2020. NAFEM and other members of Americans for Free Trade sent a letter supporting this effort. The USTR has objected to the retroactive aspect of the proposed legislation.

Members importing Japanese steel advised to track export quotas

The U.S.-Japan Trade Rate Quote (TRQ) deal, which went into effect April 1, allows Japan to export tariff-free the first 1.25 MMT of steel under 54 product categories. To qualify for duty-free treatment, these steel exports must be melted and poured in Japan. The Coalition of Metal Manufacturers and Users (CAMMU), of which NAFEM is a member, recommends that all manufacturers who import steel products from Japan check this page from U.S. Customs and Border Protection (CBP) on a weekly basis to track how close the quota for a particular product is to being filled. If the quota for that product is filled while the steel is still on the water, the importer will be required to pay the 25 percent tariff. The U.S. –Japan TRQ deal did not include aluminum imports, so the 10 percent tariff on aluminum imports from Japan remains in place.

Senators call to ease steel tariffs

Senators Dianne Feinstein (D-CA) and Patrick Toomey (R-PA) sent a letter to President Biden April 5 requesting that he terminate the 25 percent Section 232 tariff on steel imports from Ukraine. The Senators wrote: “We believe the costs of these tariffs to U.S. families, manufacturers, and other businesses have outweighed their benefits, and we appreciate the initial steps you have taken with the European Union and Japan to reduce their impact….The United States should do everything it can to ensure that the Ukrainian people can effectively rebuild after the war. Lifting the U.S. tariff on steel from Ukraine is a small but meaningful way for the U.S. to signal support for Ukraine and to provide stability and improve the country’s long-term economic outlook.”

U.S. UK continue trade dialogue

Conversations about the future of Atlantic trade continue between USTR Katherine Tai and UK Secretary of State for International Trade Anne-Marie Trevelyan. Meeting for the second time in late April, Tai and Trevelyan announced plans to pick up the pace of their roadmap addressing support for small- and medium -sized enterprises, digitizing U.S. – UK trade, building supply-chain resilience, global trade impacts of Russia’s invasion of Ukraine, promoting environmental protection and the transition to net zero emissions, supporting high labor and environmental standards, and promoting innovation and inclusive economic growth for workers and businesses on both sides of the Atlantic.

USTR Issues Annual Special 301 Report on Global IP Protection

On April 27, the USTR released this year’s Special 301 report on challenges faced by U.S. businesses and inventors seeking to protect their intellectual property (IP) around the world. The report spotlights foreign countries and the laws, policies and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers and service providers. It highlights specific issues such as counterfeiting, trade secret theft and forced technology transfer, and identifies 27 specific countries of concern, seven of which are included on USTR’s high-priority watch list (Argentina, Chile, China, India, Indonesia, Russia and Venezuela).