U.S. Trade Policy and Tariff Actions
- CBP begins issuing refunds for accepted IEEPA tariff refunds: CBP confirmed this week that the first tranche of IEEPA tariff refunds are expected to be paid via ACH on or around 11 May. As of 26 April, importers and brokers had submitted approximately 75,000 CAPE Declarations covering over 11.2 million entries. Please note that CAPE Phase 1 only covers unliquidated entries and entries liquidated within 80 days. Finally liquidated entries will be addressed in a future phase with no announced timeline.
- CIT strikes down Section 122 tariffs and the Administration appeals the decision: On 7 May, a 2-1 panel of the U.S. Court of International Trade ruled that President Trump's 10% global tariff imposed under Section 122 of the Trade Act of 1974 is unlawful. The Administration appealed on 8 May to the U.S. Court of Appeals for the Federal Circuit. PMMI members should note the following:
- Given that the USCIT did not issue a universal injunction, the ruling does not have any immediate effect on importers which are not part of the ligation. As such, most importers will continue paying Section 122 10% tariffs.
- Importers should continue tracking additional tariffs applied, noting the date of entry, product, value, Section 122 tariff applied, and tariff cost. Any Section 122 tariffs passed down by importing suppliers should also be tracked.
- The Administration’s use of Section 122 tariffs is a temporary solution to the invalidation of IEEPA tariffs by the Supreme Court and are expected to be replaced by Section 301 tariff action around 24 July. As such, even if Section 122 tariffs are ruled illegal, importers should plan for tariffs to remain in place but under different legal authorities.
- USTR hears testimony as part the Section 301 structural excess capacity investigation: The U.S. Trade Representative (USTR) held four days of public hearings on 5-8 May as part of its Section 301 investigations into structural excess capacity in a variety of industries and targeting 16 trading partners. During the hearings, domestic steel and aluminum producers testified strongly in favor of broad tariff remedies targeting China, arguing that subsidized overcapacity continues to distort global markets. The USTR investigations continue and are not expected to conclude until June/July. While the specific tariff action outcome is not yet known, the continued focus on Chinese structural excess capacity in steel and aluminum industries could lead to additional tariffs on imports of metals and/or their derivatives. Which could impact metal inputs for the manufacturing of machinery or their parts and components, on top of the existing Section 232 tariffs.
- Trump sets deadline for EU to comply with Turnberry Agreement: On 7 May, President Trump set a 4 July deadline for the EU to ratify and implement its side of the Turnberry Framework Agreement, which include the elimination of import tariffs on U.S. origin industrial goods, threatening to raise tariffs if the EU fails to comply. The EU Parliament and Council have noted that while the EU is in the final stages of implementing the remaining tariff commitments there is still work remaining to finalize the agreement. European lawmakers are set to meet Wednesday to finalize legislation to implement the trade agreement with the US. Separately, France responded by highlighting that the EU has tools at its disposal to respond to threats by the Trump Administration.
Trade Policy Actions by Other Countries
- 19 WTO members agree to not impose e-commerce duties: On 7 May, the U.S. and 18 other WTO members, including Japan and South Korea, launched a pact to not impose any e-commerce duties for an unspecified period starting 8 May. The agreement by certain WTO members is a response to the expiration of the e-commerce moratorium on 30 March after WTO members were unable to reach an agreement on how to deal with e-commerce transactions during the WTOs Ministerial Conference (MC14) in March. The limited agreement means that digital trade, including digital services/support and software licensing, to countries which are part of the limited pact will remain free of any additional duties. However, all other WTO member countries can impose fees on e-commerce until a broader WTO wide agreement is finalized.
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