IFFCBANO 2018 Intl Trade Symposium US Trade Actions Context & - - PowerPoint PPT Presentation

IFFCBANO 2018 Int’l Trade Symposium

US Trade Actions Context & Legal Foundation

Edward T. Hayes, Esq. Leake & Andersson L.L.P. 1100 Poydras Street, Suite 1700 New Orleans, LA 70163 504-585-7500 ehayes@leakeandersson.com

US Trade Actions-Context

 President Trump—changing course of US trade policy  Reciprocity & Trade Deficit main themes  US is most open/transparent market in the world  Prior US trade policy—market opening and non-tariff barriers

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US Trade Actions-Context

 Now redrawing agreements and clawing back concessions in two areas  International: NAFTA, WTO & FTAs (KORUS)  Domestic focus: US trade laws allowing unilateral action  Department of Commerce AD/CVD Self Initiation (alloy aluminum sheet from China)  Current focus on actions under Sections 232 and 301 of Trade Laws

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Section 232- Steel & Aluminum Tariffs

 Section 232 (Trade & Expansion Act of 1962): If DOC “finds that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security. . . “  President may take actions deemed necessary to adjust imports  1980 President Carter imposed fee on imported oil  Department of Commerce ruled that imports of steel & aluminum impairing US national security

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Section 232 Steel & Aluminum Tariffs

 March 8, 2018 President Trump imposed 25% tariff on steel imports and 10% on aluminum products  Collections began March 23, 2018  Target Steel Products:  USHTS 7201: Primary Materials in Granular or Powder  USHTS 7206: Iron and Nonalloy Steel  USHTS 7218: Stainless Steel  USHTS 7224: Other Alloy and Nonalloy Steel Bars & Rods

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Section 232 Steel & Aluminum Tariffs

 Target Aluminum Products:  USHTS 7601: Unwrought Aluminum  USHTS 7604: Bar, Rods and Profiles  USHTS 7605: Wire  USHTS 7606 & 7607: Plate, Sheet, Strip, and Foil (flat rolled)  USHTS 7608 & 7609: Tubes and Pipes (plus pipe fitting)  USHTS 7616.99.51.60 & 7616.99.51.70: Castings and Forgings

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Section 232 Steel & Aluminum Tariffs

Country exclusions: NAFTA & EU (temporary); Australia, Argentina, South Korea & Brazil Product exclusions allowed through administrative process at Department of Commerce (8,000 requests)

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Section 232 Steel & Aluminum Tariffs

 China retaliation notified to WTO on March 29, 2018  Target agricultural goods in politically sensitive areas Fresh Fruits, Dried Fruits & Nuts (15%) Grape Wine (15%) Iron and Steel Tubes and Pipes (15%) Pork Meat (25%) Already enacting non-tariff retaliation-100% inspections of US fresh fruit causing delays

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Section 232 Steel & Aluminum Tariffs

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Section 232 Steel & Aluminum Tariffs

China initiated WTO dispute settlement alleging action violates WTO Safeguards Agreement US asserts National Security Exception-Article XXI WTO members may take any action “necessary for the protection of its essential security interests . . .”

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Section 301-China Intellectual Property

Section 301-President may modify tariff rates where: (1) US rights under a trade agreement denied; or (2) act, policy or practice of foreign country [a] violates a trade agreement, or [b] unjustifiably burdens or restricts US commerce USTR report & Presidential Memo (March 28, 2018) China’s practices: (1)forced technology transfer; (2) restrictive licensing terms; (3)direct US investment to obtain important US technology; and (4) direct IP theft

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Section 301-China Intellectual Property

USTR list of proposed tariffs published April 6, 2018 Public hearing on May 15, 2018 Proposed list imposes 25% tariff on 1,300 separate tariff lines seeking $50 billion in offsets Primarily target products benefitting from Chinese industrial policies (chemicals, steel and aluminum products, engines, ag machinery, electronics, marine equipment)

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Section 301-China Intellectual Property

China announced proposed retaliation of 25% tariff on US soybean, airplane and automobile exports (matching equivalent $50 billion number) US launched WTO dispute settlement case on China policies US and China engaged in talks for bilateral solution

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Conclusions

Trade actions part of course change by President Trump View tariffs and new trade policy as part of business’ political and economic risk assessment Diversity in supply chains and markets critical now more than ever

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