Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Q. With increased tariffs and retaliatory tariffs going into effect on steel, aluminum, and a range of other products from multiple countries, is it true that automobiles may be next?

A. Yes, these are indeed interesting times. It appears that the automotive industry is the next target of increased tariffs. The United States and China are already moving forward to implement additional tariffs on a wide range of products, effective on July 6, 2018, as a result of the Section 301 investigation. Additional tariffs are already in effect for designated steel and aluminum products imported from a number of countries, including Canada, Mexico, and the European Union. They, along with other countries, are imposing retaliatory tariffs on a range of U.S. exports.

The tariffs the U.S. imposed on steel and aluminum products were the result of an investigation by the Department of Commerce (DOC) under Section 232 of the Trade Expansion Act of 1962 to determine whether imports of steel and aluminum threaten national security. That provision, which has rarely been used until recently, authorizes the President to restrict imports into the U.S. of any article being imported “in such quantities or under such circumstances as to threaten the national security.” 

The DOC issued separate reports on February 16, 2018, with affirmative findings that imports of both steel and aluminum were threatening national security. Both reports contained specific options for the President to consider in addressing these threats, including increasing tariffs and imposing quotas. The President chose to impose a 25% additional tariff on designated steel products and an additional 10% on designated aluminum products imported from multiple countries.

More recently, on May 23, 2018, Secretary of Commerce Wilbur Ross announced the initiation of a new investigation under Section 232 to determine whether imports of automobiles, including SUVs and light trucks, and automotive parts threaten to impair the national security of the U.S. From the publication of the Federal Register Notice of this investigation on May 30, 2018, the DOC has 270 days or until February 24, 2019, to complete the investigation and report its findings and recommendations to the President. 

Like with the Section 232 investigation on steel and aluminum, the President has wide latitude to implement corrective action, including increased tariffs and/or the implementation of quotas. The DOC has solicited public comments on the investigation and is expected to hold a public hearing on the subject in the coming weeks. Because of the tight time constraints for this investigation, it is imperative that interested parties move swiftly to provide comments on the investigation or request to appear at the public hearing. The deadline for both is June 22, 2018, and there is not likely to be an opportunity later in the process to express your views.