By a Proclamation dated August 10, 2018 (https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-steel-united-states-5/) President Trump doubled the additional duties on steel products from Turkey imposed in the Section 232 investigation from 25% to 50%. The additional duties became effective on August 13, 2018. Further information on entry procedures is included in the updated Section 232 information page on the CBP website, https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel.

The Proclamation indicates that capacity utilization rates in the domestic steel industry have not increased to the level recommended in the Commerce Department Section 232 report. It further notes that import levels have declined, but not to the extent necessary to result in the desired increase in domestic capacity utilization.

Turkey is one of twelve countries listed in the Commerce Department report that could be considered for higher duties should the President determine not to impose the same duty rates on all countries. Although the original Proclamation provided for identical duty rates for all covered countries, it is now considered necessary to adjust the tariff for Turkey as “a significant step toward ensuring the viability of the domestic steel industry.”

The twelve countries listed for possible higher duty rates are Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam. Two of these (Brazil and Korea) are covered by quota agreements. The remaining nine countries therefore seem to be possible future targets for duty increases.

Although not stated in the Proclamation, one justification given for the duty increase for Turkey is that the significant decline in the value of the Turkish lira against the U. S. dollar resulted in Turkish steel avoiding some of the duty effects felt by steel from countries with stronger currencies. How this may be applied to other countries with currencies declining against the dollar is unclear. The political controversies with Turkey have also be cited as possibly having an effect on the determination. This has led to concerns about the possible use of the Section 232 duties for other than the claimed national security purposes.

Steven W. Baker

AIIS Customs Committee Chair

swbaker@swbakerlaw.com

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