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President Donald Trump <a href="https://url.us.m.mimecastprotect.com/s/iOIoCwpnDOskx033CVflUJbZfp?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">announced that a 25% tariff on all steel and aluminum imports</a> would take effect today, eliminating previous country exemptions.

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The revised Proclamation 9705 and Proclamation 9980 amend the duty rates and eliminate all previous exemptions and quotas, maintaining a 25% ad valorem tariff on most steel articles and a 10% duty on derivative aluminum articles, with exemptions for specific countries. The latest changes extend or modify exclusions for the European Union (EU), Japan, the UK, Ukraine, and others, with some exemptions set to expire in 2024 or 2025 unless further extended. Additionally, the Secretary of Commerce is directed to establish a process for including more derivative steel articles under these duties, while Customs and Border Protection (CBP) will implement stricter reporting requirements on steel content for imports.

In response to Ontario's 25% surcharge on electricity exports to U.S. states, Trump initially threatened to double tariffs on Canadian steel and aluminum imports to 50%. However, after Ontario suspended its electricity surcharge, Trump rescinded the additional tariff threat, maintaining the 25% rate.

Read the steel Federal Register notice <a href="https://url.us.m.mimecastprotect.com/s/ej7aCxkoEPhDvmoofvhlUykcMe?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a> and the aluminum Federal Register notice <a href="https://url.us.m.mimecastprotect.com/s/td-aCyPpG0cKo655iQinUxYjhE?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a>. Read the steel CBP guidance <a href="https://url.us.m.mimecastprotect.com/s/xugZCzpqJRsEq8ooHKsBU9DEAX?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a> and the aluminum CBP guidance <a href="https://url.us.m.mimecastprotect.com/s/aFWQCAD8GwFBOrAAHQt6UGkyHa?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a>.

Section 232 Retaliatory Actions Announced

In <a href="https://url.us.m.mimecastprotect.com/s/Tk0-CBB1Jxs0KP55H1uRU28j5k?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">response to recent U.S. tariffs on imported steel and aluminum</a>, several key trading partners have implemented retaliatory measures targeting American products. The EU announced tariffs affecting approximately $28 billion worth of U.S. goods, including motorcycles, whiskey, and chewing gum, with some measures reinstated from previous disputes and new tariffs set to take effect in mid-April. Mexican President Claudia Sheinbaum has <a href="https://url.us.m.mimecastprotect.com/s/ALfyCDkwLzhwAjllfRCgUjgWLC?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">postponed announcing retaliatory measures against U.S. tariffs</a>, including those under Section 232, until after April 2, 2025, when reciprocal tariffs are expected to be announced. Sheinbaum's administration has condemned the U.S. tariffs as violations of the USMCA and is preparing countermeasures to protect Mexico's interests.

Additionally, Canada <a href="https://url.us.m.mimecastprotect.com/s/LKa4CERKMAFOx155ixF6U7tFvP?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">announced</a> it is imposing 25% counter tariffs on <a href="https://url.us.m.mimecastprotect.com/s/2pUGCG6wODhE4W55HrH2UB7aZX?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">$29.8 billion worth of U.S. imports</a>, including $12.6 billion in steel, $3 billion in aluminum, and $14.2 billion in other goods like tools, computers, and sports equipment, in response to U.S. tariffs on Canadian steel and aluminum. These tariffs add to Canada’s previous $30 billion in countermeasures under the IEEPA. If the U.S. tariffs remain, further measures could be imposed on April 2 following a public comment period. Canada is also reviewing potential tariffs on derivative steel and aluminum products. A remission process will allow businesses to seek exceptional relief from the tariffs, and U.S. goods already in transit before March 13, will be exempt.

President Donald Trump has <a href="https://url.us.m.mimecastprotect.com/s/qmfMCJ6EgJhlwpEEHKI2UywV0A?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">postponed the implementation of 25% tariffs</a> on a significant portion of Mexican and Canadian goods, granting a one-month exemption for products that comply with the U.S.-Mexico-Canada Agreement (USMCA). This <a href="https://url.us.m.mimecastprotect.com/s/DNG2CKrAj0IPW855HkSAU5kBiI?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">reprieve</a> affects approximately 38% of Canadian imports and 50% of Mexican imports. The decision aims to minimize disruptions to industries such as automotive manufacturing and agriculture, addressing concerns over fertilizer prices and supply chain stability. Initially scheduled to take effect on March 4, the tariffs are now set to be enforced on April 2, contingent upon progress in addressing issues like illegal migration and fentanyl trafficking. The exemption is effective as of March 7.

View the orders for Canada <a href="https://url.us.m.mimecastprotect.com/s/f_H0CL9AkLIV9NnnSYTlUysh8l?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a> and the orders for Mexico <a href="https://url.us.m.mimecastprotect.com/s/UguMCM87lMsD3x44fqUGU83g9t?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a>. View the Federal Register notice for Canada <a href="https://url.us.m.mimecastprotect.com/s/jwuoCNk7mNhJ3Vmmh3cvUyj9A1?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a> and the Federal Register notice for Mexico <a href="https://url.us.m.mimecastprotect.com/s/IMfECOYJnOclx5mmH9fgUGo4H-?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">here</a>.

Response from Canada and Mexico on IEEPA Tariffs

Canada has <a href="https://url.us.m.mimecastprotect.com/s/kb_FCPN6oPu9XvEESJhDUxBuFh?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">initiated a dispute resolution process</a> at the World Trade Organization (WTO) in response to President Donald Trump's 25% tariffs on Canadian goods, requesting consultations with the United States. Canadian Ambassador to the WTO Nadia Theodore stated that Canada was compelled to protect its interests, expressed regret over the situation, and urged the U.S. to reconsider the tariffs. Both Canada and Mexico have also expressed that these tariffs violate the USMCA and have indicated potential retaliatory measures.

Last Friday, President Trump said he <a href="https://url.us.m.mimecastprotect.com/s/H2h2CQWApQIgPBjjili3UGxhCS?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">may impose reciprocal tariffs on Canadian lumber and dairy products</a>, accusing Canada of unfairly charging high tariffs on U.S. goods. Trump has long criticized Canada’s dairy tariffs, which range from 241% on fluid milk to 299% on butter, and warned that Canada would face the same tariffs unless they lower theirs. Additionally, Mark Carney, former governor of the Bank of Canada and the Bank of England, <a href="https://url.us.m.mimecastprotect.com/s/pUT7CR68qRhoWnqqHVsNU19DVT?domain=rnn4sp8ab.cc.rs6.net" target="_blank" rel="noopener">has been elected leader of Canada's Liberal Party</a>, succeeding Justin Trudeau as prime minister. Carney, who secured 85.9% of the leadership vote, assumes office amid escalating trade tensions with the United States, following President Trump's imposition of tariffs on Canadian goods and threats of annexation.

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Do the steel and aluminum or USMCA product tariffs impact you? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at <a href="mailto:sarah.helton@michaelbest.com" target="_blank" rel="noopener">sarah.helton@michaelbest.com</a> for assistance.

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Trump Trade 2.0: Section 232 Steel and Aluminum Tariffs Enacted

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