(Feb 13): The Trump administration is working to narrow its broad tariffs on steel and aluminium products that companies find difficult to calculate and the European Union (EU) wants reined in as part of its pending trade deal with the US, a person familiar with the matter said.
The US Trade Representative’s Office (USTR) is scrambling to resolve complications spawned last year by the Commerce Department’s efforts to rush out President Donald Trump’s tariff agenda, the person said.
The White House has communicated to companies that adjustments are in the works, but details and timing remain unclear, the person said.
The rollback plans were reported earlier by the Financial Times. Aluminium fell in London following the report.
Spokespeople for the USTR and Commerce didn’t immediately respond to requests for comment sent outside of business hours in Washington.
50% levies
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Trump last year imposed a 50% levy on foreign steel and aluminium in a measure aimed at Chinese overcapacity. The step wound up hitting other major trading partners hard, including Canada, the EU, Mexico and South Korea.
Later added to the list were so-called derivative products that contained the metals, creating an arduous task for companies to identify the percentage of the materials in goods they sourced from overseas.
USTR Jamieson Greer acknowledged two months ago that “there’s some complexity” with the derivatives tariffs and that he’s heard from “a lot of folks”.
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He said he discussed the difficulties with Customs and Border Protection and that he was “very open” to feedback.
Customs ‘challenges’
“We are committed to making it as smooth as possible,” Greer said during an Atlantic Council forum on Dec 10. “Naturally, when you are moving trade policy that’s been more or less the same for 70 years to a new outcome, and you are changing the tariff regimes, there’s going to be challenges in making it operational.”
Trump’s taxes on US imports have also come under increased scrutiny this week in Congress and in separate reports by the Congressional Budget Office and the Federal Reserve Bank of New York — both of which said American consumers and businesses are shouldering most of the costs of his tariffs. That runs counter to his repeated assertions that they are paid by foreign exporters.
Ending or curtailing the derivative tariffs would be a positive step for the US-EU trade accord. A framework for the deal was negotiated last year but remains not fully implemented.
The EU still faces a 50% US duty on steel and aluminium exports as well as on many other derivative products. Washington revises the list of derivative products that are subject to the higher tariff rate several times a year.
The EU is particularly concerned that the breadth of goods hit by the 50% metals rate — surpassing hundreds of items — as well as potential new, higher levies on different industries will dilute the EU-US trade deal and the agreed 15% tariff ceiling, Bloomberg has previously reported.
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