On March 1, 2018, President Trump announced new tariffs on steel and aluminum imports, rejecting push back from his own advisers and objections from both Democrats and Republicans. Trump said the tariffs were needed to level the playing field for American steel producers against “bad actors” like China. The import tariffs included 25 percent on steel and 10 percent for aluminum. At the time of the announcement, the President exempted Canada and Mexico and offered the possibility of excluding other allies.
In the wake of the announcement, many countries threatened retaliation against any U.S. tariffs. The European Union threatened to impose tariffs on hundreds of U.S. items for import, including cigarettes, sweetcorn, and stainless steel sinks. However, those threats were not realized, as the U.S. carved out an exemption for the EU. To date, the U.S. has granted exemptions to key allies, including Canada, Mexico, the EU, Argentina, Australia, Brazil and South Korea.
India is seeking an exemption from the tariffs. The Trump Administration has taken issue with India in the past, since the U.S. has a $20 billion trade deficit there. On March 14, 2018, the U.S. challenged India’s export subsidy regime in the WTO. On April 11, 2018, the U.S. and India will hold bilateral consultations in Geneva to discuss the WTO case filed by the Trump Administration.
On March 18, 2018, the U.S. Department of Commerce formally announced procedures for excluding tariffs on steel and aluminum product imports for domestic companies. These procedures are aimed to minimize the impact on downstream American industries. A domestic company must apply for exclusions, and will be granted an exemption only sparingly and based on national security concerns, which the Bureau of Industry and Security will oversee. Certain considerations must be met in order to be excluding from the tariffs, including whether a product is produced in the U.S. and if the product is of a satisfactory quality or in a sufficient and reasonable amount.
On April 10. 2018, China filed a trade case at the WTO over President Trump’s steel and aluminum tariffs. China, which has requested 60 days of consultations with the U.S., argues that the tariffs are inconsistent with WTO rules and has said that the U.S. imposed the duties as a safeguard measure that countries use to counter export restrictions by other nations. China’s complaint argues that the U.S. hasn’t shown that steel and aluminum imports hurt domestic producers and it hasn’t followed the proper procedures in pursuing the tariffs. China’s government issued a $3 billion list of U.S. goods, including pork, apples and steel pipes that it said might be targeted for retaliation if Trump fails to negotiate a settlement to the dispute over steel and aluminum charge.
Trump has threatened to increase duties on $50 billion in Chinese goods in a separate conflict over technology policy. On March 23, 2018, the Office of the U.S. Trade Representative launched a complaint, stating that China uses discriminatory licensing requirements to compel the transfer of technologies from U.S. companies to Chinese firms. Since that time, Japan has notified the WTO of its intention to join as a third party in the U.S.’s complaint against China over alleged theft of intellectual property. After China threatened retaliatory import duties on $50 billion in U.S. goods, including soybeans, Trump suggested he might seek tariffs on $100 billion more in Chinese goods. In response, Chinese President Xi Jinping had said China would unilaterally open its markets and cut tariffs on auto imports and lower trade barriers on other goods and services.