More news on the US trade remedies front.
Steel (25%) and aluminum (10%) duties under Section 232 that were initiated on National Security grounds, appear to be even more onerous as the Trump administration has announced that products targeted for Section 232 advanced duties will lose the benefit of GSP trade preference.
There is great concern that other free trade programs may be similarly affected on Section 232 products.
Expect supply chain disruptions, higher costs, and litigation.
In an additional hit to the trade and to exporters in particular, the administration has advised that duty drawback will not be available for Section 232 duties that were paid upon import.
There is no word yet about the impact of these policies to the Section 301- China Trade Enforcement duties that are being contemplated.
There are several mitigation strategies available that companies may not have considered in the past for products because of low duties.
Those strategies revolve around five key areas:
- Tariff classification
- Changes to country of origin
- Declared value reduction strategies
- Use of Free Trade Zones
- Manufacturing changes prior to import
The current environment is complex and getting to be more so with each news cycle.
Tradewin is well versed in these mitigation strategies and can help you to prepare.
We expect to see a changing landscape for a long while as these trade remedies make their way through WTO conference, negotiation, and perhaps lawsuits.